slide1 n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
PASSING ON THE BATON PowerPoint Presentation
Download Presentation
PASSING ON THE BATON

Loading in 2 Seconds...

play fullscreen
1 / 41

PASSING ON THE BATON - PowerPoint PPT Presentation


  • 104 Views
  • Uploaded on

Peter Briscoe. PASSING ON THE BATON. 1662 - van Eeghen & Co. Chr. Van Eeghen (1700-1747). Jan Van Eeghen (1789-1838). Jan Van Eeghen (1729-1760). Sam Van Eeghen (1853-1934). Chr. Van Eeghen (1952 - ). Herengracht 462, Amsterdam). Succession. Business. Christian Ministry.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'PASSING ON THE BATON' - guy


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1

Peter Briscoe

PASSING ON THE BATON

1662 van eeghen co
1662 - van Eeghen & Co

Chr. Van Eeghen(1700-1747)

Jan Van Eeghen(1789-1838)

Jan Van Eeghen(1729-1760)

Sam Van Eeghen(1853-1934)

Chr. Van Eeghen(1952 - )

Herengracht 462, Amsterdam)

succession
Succession

Business

Christian Ministry

1986 – 1989

CBMC Holland

1990 – 2002

Europartners

2008 –

Crown Europe

  • 1972 - 1986
    • Brent Chemicals
  • 1990 - 1997
    • Synthesys
  • 2002 – 2008
    • HE Space Operations
biblical succession planning
Biblical succession planning
  • God is in charge and a successor is His choice
    • David’s appointment
  • Recognise and develop emerging leaders
    • Deuteronomy 6:6–9; 20–25;
  • Emerging leaders are to be mentored
    • Moses > Joshua (40 years)
  • Recognise limitations & step down in time
    • Moses would die before entering
  • Share leadership
    • Moses in Numbers 27:20
joshua s development
Joshua’s development
  • selected by Moses to lead the Israelite army into battle against the Amalekites (Exodus 17:8-16)
  • accompanies Moses up the mountain to receive the Ten Commandments (Exodus 24:13
  • guarded the tent of meeting, where Moses met face to face with God (Exodus 33:11)
  • present when the Lord sent His Spirit upon seventy leaders (Numbers 11:17).
  • chosen by Moses to be one of the 12 spies sent to spy out the land (Numbers 13:8)
  • God had placed His Spirit in Joshua, which shows God’s choice and God’s provision for leadership (Joshua 1:1-18)
slide6

Peter now handing over to Mark

MARK LLOYDBOTTOM BATON

slide7

Source: The Pinch pg. 73

PASSING ON THE BATON

slide8

Source: The Pinch pg. 76

PASSING ON THE BATON

the age of inheritance 1

The Age of Inheritance (1)

The “Age of Inheritance” is peaking with today’s over 55s

The peak in leaving an inheritance is around 2047

Value of windfalls to date is £904 billion

Today’s adults expect to receive £1.2trillion

The amount of inheritance today’s adults expect to leave is £5.4 trillion

Source: HSBC Age of Inheritance. Sept 2011

PASSING ON THE BATON

the age of inheritance 2

The Age of Inheritance (2)

All Britons plan to leave more than they expect to receive in inheritance

Expectations of inheriting from parents have grown significantly

There is a huge growth in the expectation of windfalls from property

London and south east will see the greatest share ML note – I believe baby boomers will use their home equity

Source: HSBC Age of Inheritance. Sept 2011

PASSING ON THE BATON

a few quick stats

A Few Quick Stats

52% of windfalls are currently under £10,000

2% are over £500,000

All Britons plan to leave more than they expect to receive in inheritance

Those aged 45 and over expect to leave £230,000

Source: HSBC Age of Inheritance. Sept 2011

PASSING ON THE BATON

how will windfalls be used

How Will Windfalls Be Used?

Essentials (34%)

Holiday and travel (32%)

Investment/pension (31%)

Property (27%)

Source: HSBC Age of Inheritance. Sept 2011

PASSING ON THE BATON

slide15

ORGANISATIONAL LIFE CYCLE

Late Prime

PRIME

Aristocracy

Adolescent

Recrimination

Go Go

Bureaucracy

Infant

Death

Courtship

GROWING

AGING

PASSING ON THE BATON

slide16

PAEI

Producer

Entrepreneur

Administrator

Integrator

PASSING ON THE BATON

slide17

ORGANISATIONAL LIFE CYCLE

Paei

PaEi

Late Prime

PRIME

Aristocracy

Adolescent

Recrimination

Go Go

Bureaucracy

Infant

Death

Courtship

GROWING

AGING

PASSING ON THE BATON

uk business stock

UK Business Stock

There are an estimated 4.5 million private sector businesses (an increase of 94,000 since 2010 and over 1 million since 2000)

These businesses employ 23.4 million people

62 per cent are in sole ownership

28 per cent are companies

10 per cent partnerships

Employment: 3.3 million have no employees

Source: Department for Business Innovation and Skills

PASSING ON THE BATON

issues for the business owner

Issues For The Business Owner

Emotional: “this is my baby”

Purpose and direction: “what will I do?”

Maintaining strong leadership

Will I have enough income? (How much is enough?)

Who can I transfer the business to?

or

Who can I sell the business to?

What is it worth?

PASSING ON THE BATON

beware of the assumptions

Beware of the Assumptions...

The business will continue to prosper

The value will be maintained or even increased

“I” will continue to enjoy good health

My life’s goals will not change

The business will never be my albatross

I am the business

I cannot afford to retire

I am irreplaceable

PASSING ON THE BATON

beware of the challenges

Beware of the Challenges

Letting go

Bias against planning

Planning ahead: Ten years is a good starting point

Knowing what your options are, and

Keeping all options open

Staying in prime – balancing entrepreneurship and production

Increasing profits

PASSING ON THE BATON

passing on within the family

Passing on Within the Family

Is there a successor who will advance the business?

Family relationship issues – harmony or conflict?

Who to choose?

Issues of financial fairness – fair to whom?

PASSING ON THE BATON

passing the baton checklist

Passing The Baton Checklist

Pray at all times

Seek good counsel

Start planning early – Be prepared - Timing

Trade sale

Family

MBO

MBI

Encourage intergenerational teamwork

Put your plans in writing

Plan for life beyond the business

PASSING ON THE BATON

types of exit

Types of Exit

PASSING ON THE BATON

slide29

What might

retiring [accounting]

firm owners be expecting?

slide30

The starting point for valuing the majority of private profitable companies is a multiple of profits.

The ‘profit figure’ most frequently used in this multiple is ‘Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA). However sometimes EBIT can be used, depending on the company / seller / buyer.

More often or not it will be the latest 12 month EBITDA which will drive valuation.

The Enterprise Value (EV) is normally calculated on a ‘cash free / debt free’ basis.

There is no set multiple for valuing a business, however here are some ideas based on the current marketplace: (only a guide)

- Manufacturing / Engineering / Contracting businesses:5x EBITDA

- Software / Technology businesses: 6-9x EBITDA

- A Freehold based business e.g. Care homes / Day Care centres: 6-8x EBITDA

- A leasehold based business e.g. chain of shops: 3-4x EBITDA

PASSING ON THE BATON

slide32

Ben and Peter run a building contractor business, Brick it Ltd (“Brick it”)

  • Brick it operates in Bristol and the surrounding areas.
  • The business has grown from a small two man operation to a £4.5m (2010) turnover business over the last 10 years.
  • Ben and Peter now feel that the business is getting too big for them, and wish to sell to a larger contracting business.
  • Sales growth has been strong in the last two years, however the bank has been unwilling to increase Brick it’s overdraft facility and cashflow is now becoming a constant worry. Ben feels as though he is working for the bank, and wants out of the responsibility.
  • They are 9 months into their financial year, and are looking at the possibility of selling after their year end. Their advisor has provided them with the following overview of valuation.
slide33

In the first 9 months of the year Brick it has made sales of £4m and an operating profit (EBIT) of £0.4m. Their advisor is helping them to place a value on the business for sale post year end.

  • The last three months of the year are largely expected to continue as the first nine. However there is a possibility of a large contract being won which would represent c.£1m of sales in 2011 alone. It makes the final results unknown.
  • The company holds a freehold property, and several pieces of equipment which produce a depreciation of £150k p.a.
  • The estimated EBITDA for 2011 based on the first 9 months is therefore £680k.
slide35

Ben and Peter would ideally like to sell Brick it to a large contracting business, and therefore stay in the business for a further year to hand over.

  • As a result of being owned by a larger business the advisor has identified several cost savings which could be added back to profit. This reflects the level of profit a large corporate could expect to make when run from it’s own head office.
  • Ben and Peter have been paying themselves above market rate salaries. £30k additional each, providing a £60k add back.
  • By moving to a large head office two of Brick it’s admin/accounting staff will not be required. They are paid a combined salary of £50k.
  • There are further cost savings made possible by moving to a larger company. Better rates and central costs for example. These are estimated at £15k.
slide36

The historic and forecasted EBITDA can now be adjusted by these add back which produces the following performance profile.

slide37

The adjusted EBITDA is now estimated to be c.£810k.

  • The performance of the business for the full year is unknown at this point, in addition the add back are unlikely to be accepted by a buyer in full. To get an idea of a valuation range the advisor has provided the following table which shows various profit outcomes and multiples and the associated valuations.
  • The highlighted range shows the values that the advisor believes are most achievable. Therefore providing a business valuation of between £2.8m and £3.5m.
  • The final outcome will be driven by the full year performance, and the ability of the advisor to get the best deal.
taxation

Taxation

PASSING ON THE BATON

do not overlook

Do Not Overlook...

The purpose of the business is to glorify God

God owns/owned the business

Give back to God a tithe

Remember that the tithe is the starting point

You will not find retirement in the Bible

??

PASSING ON THE BATON

generosity

Generosity

There are five types of giving:

Money you ______ _______ ____

________ money

________ money

______ ______ money

________ money

PASSING ON THE BATON