For more information and resources, check out our  Corporate value growth is a key metric of success for all companies. Measuring and driving this growth holds numerous unique challenges for privately-held companies, especially in the lower middle market. Fortunately, there are resources available to assist with that process. In this article, we will focus on four value building online tools:Entrepreneurial Operating System (EOS) ®EvaluSysScaling Up by GazellesThe Value Builder SystemThis post is part of a series based on conversations with the XPX community about the methodologies and tools they use to support their private company clients in value growth engagements. We split their feedback into four articles:How to Start the Value Conversation with Your ClientsBest Books and Methodologies for Value GrowthAutomated Tools for Assessing Business ValueAutomated Tools to Support Corporate Value Growth CEPA certification, which we discuss 

Corporate value growth is a key metric of success for all companies. Measuring and driving this growth holds numerous unique challenges for privately-held companies, especially in the lower middle market. Fortunately, there are resources available to assist with that process. In this article, we’ll share some of our community’s recommendations of books and methodologies for value growth: 3HAG Way and The Metronome Effect: A Journey to Predictable Profit, by Shannon Byrne Susko EMyth: Why Most Businesses Don’t Work and What to Do About It by Michael Gerber Exit Strategy Handbook written by Jerry Mills (B2B CFO Partners) Pumpkin Plan and Profit First by Mike Michalowicz This post is part of a series based on conversations with the XPX community about the methodologies and tools they use to support their private company clients in value growth engagements. We split their feedback into four articles: How to Start the Value Conversation with Your Clients Best Books and Methodologies for Value Growth Automated Tools for Assessing Business Value Automated Tools to Support Corporate Value Growth working ON the business and not just UN it. Gerber followed up with EMyth Revisited in 1995, where he addressed questions from business owners he received after writing the first edition. XPX Member Experience (Andrew W.): 3HAG WAY and E-Myth are a set of step-by-step processes and systems that business owners can follow. Obviously, from our (advisor) point of view, we’d only select one of these systems and approaches, but I like them because each of the books offers a set step-by-step system that you can introduce the business owner to grow their businesses and increase the value of their business. They’re very similar, as you would expect, because these are universal principles that are enshrined within the systems and processes. That’s why I recommend those books for other advisors and consultants to have a look at and perhaps choose a system which resonates with them and which is appropriate to their particular business owner and size of the business. B2B CFO in 1987. He is a frequent speaker and a Certified Business Transition Expert, and has received multiple business accolades and awards on behalf of the company. Mills has written three books: The Danger Zone, Avoiding the Danger Zone, The Exit Strategy Handbook. XPX Member Experience (Stephen N.): The Exit Strategy Handbook is one of our guidebooks that we use in our practice. We use it in conjunction with our patented software, our exit software. The Exit Strategy Handbook is a guidebook that educates entrepreneurs, business owners about all of the different items, issues, concerns they need to understand in order to successfully navigate to a successful transition. The book, I think it’s 12 chapters, covers everything from the concept of adjusted EBITDA multiple; how companies may be evaluated; different kinds of buyers, financial, strategic and so forth. A lot of the book really focuses on, in conjunction with the B2B CFO [software], on how the owners can help themselves by improving the value of the business in a number of ways. The exit software that we employ in conjunction with the book allows us to track the estimated valuation of the business as adjusted EBITDA is employed over a period of time, as well as adjustments to an estimated multiple as provided or recommended by an M&A firm or your business broker that may be employed as well as part of the engagement. It’s [associated with] a very neat software tool that holds all the different members of what we call the success team, all of the different players that are involved in helping the owners succeed. They’re held accountable for their different roles with checklist so that the owner and the CFO can track the status of the engagement, who’s behind, who is on track. Again, it can keep track of the valuation of the company over the period of time engaged. XPX Executive Director Mary A. We have a number of members from your network, and I’ve always seen just a great affinity between your approach with this idea of a success team and the core values of XPX, which is having a diverse team that knows and trusts each other and works literally as a team. That’s a great perspective. Stephen N. You’re exactly right. That’s why we like your organization. We look to your organization to complete the success team when we are involved in a transition engagement. About 20% of our clients across the country have engaged this specifically to prepare their business for a transition. In that process, we do use the handbook and the software. Mike Michalowicz is a business entrepreneur, a prolific business author and speaker. He wrote The Pumpkin Plan in 2012 and Profit First in 2017 based on his experiences growing and selling multiple businesses. He has also written The Toilet Paper Entrepreneur, Surge, Clock Work, and Fix This Next.  XPX Member Experience (Andrew W.): Profit First, and Mike’s other book, Pumpkin Plan, they are more specific. They’re not complete holistic processes and systems for growing the business, but they take one aspect of the business. Profit First takes the accounting aspect for a small business and says, “Hey, look at the cost sales, cost formula in a slightly different way and start looking at sales minus profit equals expenses rather than sales minus expenses equals profit,” so that you’re going to encourage the small business owner, almost to pay themselves first and put various amounts of money in various different pots, so they don’t run out of cash, they don’t end up not paying themselves, et cetera. That’s a very specific focus. Mike Michalowicz is a business entrepreneur, a prolific business author and speaker. He wrote The Pumpkin Plan in 2012 and Profit First in 2017 based on his experiences growing and selling multiple businesses. He has also written The Toilet Paper Entrepreneur, Surge, Clock Work, and Fix This Next.  XPX Member Experience (Andrew W.): The Pumpkin Plan is again a very specific focus around growing the business through focusing on customers and identifying their core strengths, sticking to their core strengths and then basically once the business has got going, firing those rotten clients as the book says (that) take up all your time and cost and focus on the rest of the clients, the high-paying clients and really work on making sure that you really understand their needs and fulfill their needs as a way of growing, which to me makes sense. Many small businesses sell, sell, sell, but sometimes, they collect lots of customers which really give them bad profit because it costs them so much to keep working with them. I thought that the Pumpkin Plan was another very specific thing that’s interesting to build into things like marketing plans and so on. We hope this article was helpful to you. It’s part of a series of posts about methodologies and tools advisors use to support their private company clients in value growth engagements. Here are the other articles in the series: How to Start the Value Conversation with Your Clients Automated Tools for Assessing Business Value Automated Tools to Support Corporate Value Growth For more information and resources, check out our 

Corporate value growth is a key metric of success for all companies. Measuring and driving this growth holds numerous unique challenges for privately-held companies, especially in the lower middle market. Fortunately, there are resources available to assist with that process. In this article, we’ll focus on the consultant’s role in educating the client on the value of the tools we bring to the table and how they can assist with the implementation process. As one of our members, Andrew W. noted: “We (advisors) can define plans, and they (business owners) can define plans, but they can get stuck on the execution and the accountability side.” This post is part of a series based on conversations with the XPX community about the methodologies and tools they use to support their private company clients in value growth engagements. We split their feedback into four articles: How to Start the Value Conversation with Your Clients Best Books and Methodologies for Value Growth Automated Tools for Assessing Business Value Automated Tools to Support Corporate Value Growth The Importance of Education As we were writing the posts on technical tools, methodologies and platforms we frequently use as advisors, it became clear that a critical component to success is to first educate the client on concepts around value, growth planning and execution. So how do advisors help their clients think about valuation and value growth? Here, we will share parts of that fascinating discussion with the XPX members: XPX Member David S.: It occurs to me we’ve got all the tools, we have the consultants, we have all our expertise and we have these processes. When we go and manage these, one of the things that holds back any of these processes or any of these business owners from getting started is understanding value. I think there’s an educational piece aside from these tools that we’ve really got to get across because even when you go in, even when you’re working the process, I think the motivation can be really enhanced by them truly understanding what it is and what they’re all about, what are they driving towards, i.e., what is transferable business value, that education piece, is critical. XPX Executive Director Mary A.: How do you do that? Do you use your own content? Do you use other content? XPX Member Andrew W.: For me, a combination of both actually. I will curate content, I will create my own content.  Evalusys tools have been used by the Entrepreneurship Institute. We’ve got an exit planning evaluation that they used as the center of one of the workshops that they held a couple of years back. The Institute of Management Consultants is beginning a series of workshops down in Houston chapter where they collaborate with chamber organizations to help educate business owners that are members of the chamber. They’ve got the Institute of Management Consultants’ members from that chapter paired up with business brokers from the Texas Business Brokers Association, and they’re using the Business Wellness Checkup that EvaluSys brings. I think education, like David did point out, is critically important. There’s education to get people into a process and get them thinking. Then there’s education along the path of value growth. It’s two different things, but you can’t get them going down the path until you get that breakthrough. Tools like Evalusys or even Advisor Resources section. The video for this webinar is below.

Corporate value growth is a key metric of success for all companies. Measuring and driving this growth holds numerous unique challenges for privately-held companies, especially in the lower middle market. Fortunately, there are resources available to assist with that process. In this article, we’ll focus on four midrange online platforms used by the XPX members to conduct business assessments: BizEquity CoreValue Advisor Software Quist Insights Value Opportunity Profile This post is part of a series based on conversations with the XPX community about the methodologies and tools they use to support their private company clients in value growth engagements. We split their feedback into four articles: How to Start the Value Conversation with Your Clients Best Books and Methodologies for Value Growth Automated Tools for Assessing Business Value Automated Tools to Support Corporate Value Growth About This Analysis Our advisors use the platforms discussed here for determining a company’s strengths and weaknesses and for guiding future planning. Please note that the business assessments resulting from these services are not appropriate for legal, tax or transactional purposes in place of a certified valuation. We are also not including tools used by valuation professionals to create certified valuations, which run upwards of $10,000. The information in this article is based on public data provided by the profiled companies on their websites and the XPX Advisors’ experiences. BEI Exit Planning Solutions , which we talk aboutEPI, and often in the CBEC program from here.  We did not have any members present during the webinar with personal experience with VOP. Why Advisors Use Automated Assessment Tools Ken B: I think one of the values of the software is that it provides you a mechanism to start the conversation with clients. To walk in and ask the question of, “Are you ready to exit your business?” The general answer is no. Andrew W: People run away from the words “exit” and “transition.” I try not to use them, to be honest. This opens up a range of clients for me who are working already with professional advisers, accountancy, financial advisers who happen to say to that adviser, “I’m a bit stuck here. I’m looking to grow the business. Can you help?” I use it as a software engagement tool, and then, later on, we can transition into exit planning. I think it’s a good conversation starter, and it’s an attractive tool to show the business owner. Eric T: It’s also a way in which we can at least start thinking about what the market may tell us. I use the word may in bold and underlined a couple of times because, ultimately, the market’s going to dictate the value of a company when it does transfer, which is obviously what I’m focusing on. It gives us some sort of baseline in our own minds for what we should be countering with, what’s acceptable, and what’s not. We hope this article was helpful to you. It’s part of a series of posts about methodologies and tools advisors use to support their private company clients in value growth engagements. Here are the other articles in the series: How to Start the Value Conversation with Your Clients Best Books and Methodologies for Value Growth Automated Tools to Support Corporate Value Growth For more information and resources, check out our 

It’s an indication of the maturity of the exit planning movement that there are now multiple options for certifications in exit planning and related disciplines. In this post, we’ll provide a view of the landscape plus share some of our long-time XPX members’ experiences with exit planning certifications. The Exit Planning Exchange (XPX) is an association of advisors to privately-held businesses in the lower middle market. Our membership includes 12 different professions, and roughly 55% of our members have at least one professional certification. This variety of occupations reflects the diverse skills required to support the owners and managers of mid-market businesses, with exit planning advisory being the uniting factor. At this point, fewer than 10% of our members have a specific exit planning certification. But they all make significant contributions to our collective understanding of exit planning as a key discipline for privately-held businesses. Here we will take a close look at the available certifications and then show you the distribution of these certifications among XPX members. In the final section, we’ll explain why many advisors choose not to pursue certification. Exit Planning Certification Options CEPA FROM EPI The CExP (Certified Exit Planner) certification was created by BEI (Business Enterprise Institute) in 2009. This multi-disciplinary training and education program thoroughly covers all stages of exit planning and has systematic testing throughout the course. It’s a rigorous 3-step process with both online and in-person options. Prerequisites: To enter the CExP training, you must have a qualifying professional designation and already serve businesses in an advisory capacity. Certification Process: Step 1: The first requirement is the Boot Camp for Advisors™, which introduces the Exit Planning process and how to begin implementing it with your clients. It can be attended in person, live-streamed online, or taken online at your own pace at home. (In 2020, only live-stream or online options are available due to Covid-19.) Step 2: The second requirement is the Advanced Exit Planning Series, which is a comprehensive online education tool comprised of nine modules covering various topics. There is a mandatory multiple-choice test after each module. Step 3: The final piece is the CExP certification, which can be obtained after the above steps have been completed, including passing the tests, case studies, and creating sample Exit Plans using BEI’s Exit Plan software. Cost Structure: The 3-step program and CExP Certification will cost you somewhere between $4,000 and $5,000, depending on whether you chose to do the in-person workshops or the online course. XPX Member Experience (Clark L.): “My experience with BEI is that John Brown, although being an attorney, saw so many dysfunctional assets, because of his merger and acquisitions experience, built a codified process fully aware of the fact that you’re going to have to have an accountant, you’re going to have to have a wealth manager, you’re going to have to have an attorney, you’re going to have to have all these disciplines. But if you help the owner follow the seven steps, then the statistical likelihood of a better outcome far outweighs the lack of not having a plan. It’s the old story; if you don’t have a map, then you don’t know where you are, let alone where you’re going. That’s why I would think that if you’re looking for a process-driven platform that can then follow on with interaction with the circle of trusted advisors, then it would probably be BEI…” CBEC FROM PES The CM&AA (Certified Merger & Acquisition Advisor) certification from AM&AA (Alliance of Mergers and Acquisitions Advisors) is targeted towards private middle market M&A professionals in corporate finance, advisory, and transaction services. Prerequisites: You need to have a college degree and a professional designation in a qualified field or PhD., J.D, or M.B.A, as well as an AM&AA membership in good standing. Certification Process: This is an in-person program that spans five days and takes place at various universities around the US at least three times a year. There is an optional online exam at the end of the program. (The program is virtual in the summer of 2020.) Cost Structure: CM&AA credential is one of the more expensive ones on the market and will run you around $5,000 for its 5-day program. XPX Member Experience (Tom L.): “We focus on only transition or exit planning, and not transaction work, if you will. I was a private business owner, three different businesses. After I left my last business about eight years ago, I got hooked on transition planning and ended up going to the AM&AA, got certified through that organization. It’s a little bit more on the transaction side.” Other Options The above four accreditations are currently the main ones on the market for obtaining an Exit Planning Certification. However, our members have also partaken in certifications or education related to exit planning from B2B CFO, FFI, and STPI, so we’ll do a quick summary of those programs here. STPI (Successful Transition Planning Institute) does not have an exit planning certification. However, it offers workshops that deal with the transitional and emotional side of exit planning for business owners. Some of our members have found their approach useful in rounding out their exit planning toolbox. Video: Perspectives from three certification providers Three leading certification providers (BEI, Pinnacle and Am&AA) give you an overview of the market and help you understand: Why should you consider certification? How do the programs work? What are the benefits for your business? Will your client care? This webinar digs into more of the details about how the certification programs work.

Don’t miss this great discussion of the best value building methodologies among seasoned advisors who regularly work with clients in the lower/middle market to build realizable business value.  

Exit planning is an important part of every private company advisor’s practice. You can benefit from joining a good network. But what should you look for? This webinar will provide you with 10 question to ask about the organizations, their programming and business model. The goal is to help you find the right fit for you and your business.