Phase V – Adding Value

Value Drivers Improve Corporate Value – important factors that determine or cause an increase in value of a business, as viewed by investors.
• Different factors drive and impact the values of businesses.
• These are value drivers that make a business more or less attractive to lenders, buyers, and investors.
• Addressing those value drivers is important in distinguishing the value of the subject business from its counterparts in its industry.

Bottom line – your value drivers integrated into an interactive high-touch approach result in greater value.

• Value drivers help you focus on the value habit by aligning performance measures:
 Human Resources and Organization − Talent & Quality of Management
 Sales and Marketing & Innovation − Customer Retention – Quality of Products & Services
 Financial Soundness − Ability to Finance the Plan
 Physical Assets and Systems/Administration − Available to achieve the Plan
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Phase I – Comprehensive Business Review (CBR)

Foundation Documents

1. Financial Projections and Pro Forma Financial Statements – presents 4-year integrated prospective income statements, balance sheets and cash flows, based on comprehensive assumptions developed by a Trusted Business Advisor and the company, using an “other comprehensive basis of accounting” (OCBOA), and providing assurance that the use of proceeds is sufficient to achieve the company’s goals.

2. Valuation Opinion and Intellectual Property Appraisal – determines the fair market value of the entire enterprise (100%) and minority interests. The objective is to express an unambiguous opinion as to the value of the company, which opinion is set forth in a Report that is supported by all procedures that a Trusted Business Advisor deems to be relevant to the valuation, and thereby validates the worth of the entity.
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Strategic Planning for Value Growth™ – by aligning individual, organizational, and cross-departmental initiatives to identify and improve processes for meeting customer and shareholder objectives.

The best approach is to express your vision and strategy of your organization as a set of:

• Goals and their associated objectives,
• Measures,
• Projected values, and
• Initiatives.

A strategic planning and management system:

• Aligns business activities to the vision and strategy of the company’s management,
• Improves internal and external communications, and
• Monitors organizational performance against strategic goals and objectives.
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Comprehensive Business Review – A Trusted Business Advisor can help you author, design and develop a very clear Business Plan that meets the requirements of a sophisticated audience.

Generally, less is more – the shorter the better. The challenge is to determine how much to emphasize each section, how they interrelate, and how to show your plan as a compelling story.

What to expect:

By using this proven Capital Markets Sourcing Document, you should properly address:

Company Profile
● Business description – summary
● Unique attributes – trends and opportunities
● Deal potential
● Exit / liquidity event
● Investment highlights – loan or investment request
● Collateral
● Use of proceeds
● Financial data – historical and prospective
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Economic Analysis of Damages – valuation and economic expertise is used for damage analysis and expert testimony to provide an opinion as to losses. Experts opine and testify in the following areas:

Lost Business Profits Analysis

• Total Business Loss
 Forced Market Exit/Shutdown
 Exclusion from Market Entry
 Loss of Business Opportunity
 Partial or Temporary Business Loss
 Product or Service Line Loss
 Business Decline
 Business Interruption
 Delay in Market Entry
 Diminished Robustness of Market Entry/Growth

Other Economic Analyses Pertaining to Damages

• Fair Market Price or Value
• Going Concern Value
• Loss of Reasonable Royalties
• Unjust Enrichment
• Loss of Product, Goods in Process, or Raw Materials
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Fairness and Solvency Opinions

A Fairness Opinion is an independent qualified third-party financial expert’s statement as to the “fairness”, from a financial point of view of a specified financial transaction, based on professional judgment supported by collected data. The “fairness” is from the standpoint of a certain designated party or parties (the company or majority shareholders), usually vis-à-vis minority shareholders.

Fairness opinions are established on the basis of a valuation report and require an in-depth analysis of the companies involved and the terms and conditions of the transaction. Fairness opinions are used to support decision making by corporate leadership and to assist shareholders or affected parties in evaluating the terms of such a proposal.

In rendering a fairness opinion, the author evaluates:
 The value of the business or assets transferred or exchanged.
 The value and form of consideration received or paid.
 Available alternatives offering greater value than the proposed transaction, determined by different approaches, including a testing of the market.
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