Ultimate Exits – The secret behind selling entrepreneurial ventures at staggering prices

Dr. Tom McKaskill

Breakthrough Publications, 2010, (286 Pages, 1.4MB)

This book provides a detailed examination of the exit preparation process in financial and strategic ventures. Underpinning the creation of value in both of these ventures are the drivers of high growth potential. In the case of a financial venture, the business itself must create the business model to exploit the growth opportunity. A financial business must build an organization which is capable of delivering a robust business to the buyer which enables the buyer to exploit its revenue growth potential.

Businesses which create value by developing an asset or capability which could be exploited by a large corporation achieve an exit through a trade sale to a strategic buyer. Strategic value is created through intellectual property or deep expertise which creates a sustainable competitive advantage in the hands of the strategic buyer. It is the strategic buyer who exploits the growth potential through an extensive distribution network.

The major recommendation in the book is that entrepreneurs need to prepare the business for sale by focusing on the manner in which the buyer extracts value for it. Understanding how value is created, how buyers perceive risks inn the business and how buyers will exploit its potential are the drivers of a preparation program for selling the business.

Business owners, entrepreneurs and investors are locked into an old paradigm about value creation being based on proven profitability. But this is not what acquirers are evaluating. They are looking to the future and assessing what return they will achieve on their investment. Thus it is the future potential of the business which is much more important than its past. As soon as we accept this view, we can be proactive about creating a future which can deliver a much higher value to the buyer than what can be shown from past results.
Business which are valued on inherent profitability should focus attention on taking risks out of the business, improving their sustainable profitability, increasing their growth rate and identifying ways in which the buyer can harness new potential. Those businesses which can deliver high growth potential through intellectual property or deep expertise should focus on the strategic value in their business. This type of business can achieve staggering exit values by selling to a large corporation which has the capability and capacity to fully exploit its strategic value.

The book has 17 chapters covering the following:

1. Forget the multiple
2. Strategic v.s financial exits
Financial Exits
3. Leveraging the financial model
4. Increasing sustainable profits
5. Build a platform for growth
6. Finding financial buyers
Strategic Exits
7. Threats and opportunities
8. Identifying strategic value
9. Finding strategic buyers
Sale Preparation
10. Sustainable competitive advantage
11. Enabling the opportunity
12. Reducing risks to the buyer
13. The acquisition process
14. Deal structure
15. Selecting professional advisors
16. Other considerations
17. Conclusion

Testimonials: (2010)
‘To get the ultimate deal you must put yourself in the buyer’s shoes and seek to reduce business risk and increase growth potential. In the current market the benefit of this approach cannot be overestimated. Tom has set out a practical step-by-step process to extract maximum value from the sale of the business.’

Ian Knight, Partner KPMG, Corporate Finance Practice, Australia

“Ultimate Exits is the ultimate book for entrepreneurs – don’t even think about selling your business without reading it.”

Tony Featherstone Tony Featherstone is a former managing director of BRW magazine

“A compelling read with lots of practical examples.  This book turns conventional valuation methodologies upside down.”

Martin Checketts - Partner, Mills Oakley Lawyers Melbourne, Australia

“Tom McKaskill takes years of detailed research coupled with real world experience and boils it down to fundamental approaches which are actionable and effective for any business. For anyone who dreams of selling a business at more than fair market value, Tom McKaskill offers proven strategies to do so. While exit advisors are on every corner, Ultimate Exits shows you how to get there at values of which you never dreamed. In my 35 years in business, I have never met a more wise and incisive exit strategist than Tom McKaskill.  Tom is the real deal.”

Philip T. Miner CEO The Miner Corporation New Braunfels, Texas, USA

“Tom McKaskill has a profound understanding of entrepreneurial companies and what entrepreneurs need to do to maximise the value of their businesses on exit.  I’ve used Tom’s principles on exits over many years to the great benefit of numerous clients.  His book is a must read for entrepreneurs wanting to sell their business for the highest possible price.”

Geoff Green Partner BSG Legal Melbourne, Australia

“Tom McKaskill’s latest e-book, Ultimate Exits, is his best to date, providing a one stop shop for any business person or investor. Much of the earlier material is focused on business improvement and driving business growth. But then Tom turns to his forte, the theory and practice of driving valuable strategic exits. This should be essential reading for any CEO or investor, not just as a single read, but as a “bible” worthy of regular re-visits to ensure that the key messages are always top of mind.”

Ergad Gold Momentum Funds Management Pty Ltd Caulfield, Melbourne, Australia

“Tom McKaskill helped me build a strategy for my small sports travel agency which resulted in a staggering outcome. The business broker told me I would be lucky to receive 4 x EBIT for my business, however, with Tom as my mentor I obtained 40 x EBIT. Tom helped me see how a large corporation could maximise the value in my business and how I should prepare it for sale and engage the potential buyers. The end result is a testimony to the rare insights Tom has to value creation and exit strategy.”

Rob Cecconi Executive Chairman and Founder Sportsnet Holidays Melbourne, Australia

“Ultimate Exits is a MUST OWN for any business owner, prospective buyer, stakeholder or anyone involved in the sale of a business. As a strategic planner for high growth businesses, a business owner and business broker who has been involved in hundreds of deals, I have never read a more comprehensive book on selling a business. I was blown away with Tom’s vision and brilliance. I have recommended the book to all my clients whether they were interested in selling in the future or not. There are at least 10 MUST DO things that I have asked my clients to implement which will be invaluable both in how they run their business and how they create value for the future. I sincerely believe that this is the best book I have ever seen on selling your business. The context is right-on and the organization makes it easy to read, follow and understand. An outstanding piece of work.”

Richard Russakoff, CEO Coach, Consultant/Speaker Bottom Line Consultants, New York, NY, USA

“The key and critical distinguishing characteristic of Tom McKaskill’s books has been the transformation of an exit strategy which quite often is a passive affair for the seller and is frequently left to the whims of the potential buyers or business brokers, into a Proactive Exit Strategy. His new book offers the definitive systematic process for this proactive exit strategy that can dramatically revolutionize and transform passive exits based on sometimes subjective multiples, into proactive strategic exits through the creation of an objective, undisputable and sustainable platform for growth. This book is a must for the harvesting entrepreneur or a family firm that has reached a succession or an internal family conflict impasse...”

George S Vozikis, Ph.D. Edward Reighard Chair of Management Director, Institute for Family Business California State University, Fresno, CA, USA

“Tom’s book is a ‘must read’ for entrepreneurs wishing to maximize the proceeds from the sale of their business. Where the business has strategic value, a proactive sales strategy focused on acquirers with the largest opportunities and most urgent threats will extract the most value.”

Jim McElwain,Director, McElwain Consulting Auckland, New Zealand

“In 2005 I attended Tom’s class on selling your business for a premium and also read his earlier edition of Ultimate Exits.   The additional material in this latest version of Ultimate Exits has further strengthened Tom’s proven methodology for unlocking the value of your business.  In less than a year after taking the course and reading the book I had sold my company, c360 Solutions, to a public company for roughly three times trailing twelve month revenues.  Without positioning my business in terms of the value it could deliver to its new owner (as opposed to strictly the financial metrics) I might not have achieved as attractive an exit.  The book and the course helped me to understand and properly position the value of my company as well as prepare the company so the due diligence and sales process were quick and easy.  Ultimately, Tom’s methodology  brought more value to both buyer and seller.”

John Gravely Vice President, Marketing and Product Marketing Scribe Software Bedford, NH, USA

“As an entrepreneur who has bought and sold businesses, I would definitely recommend this book to fellow entrepreneurs. This book contains many tips and pitfalls when selling your business and by just following a few simple but often forgotten steps will help you through the sale and will make you a great deal more money.”

David Southwick Managing Director David James Investments Pty Ltd Melbourne, Australia