OUR MISSION
To ensure that all business owners have the option to exit their business at the time of their choosing, for the maximum value possible, with the knowledge and resources necessary to provide successful retirement outcomes and preserve multi-generational wealth.
Flight Plan Strategies accomplishes this by helping business owners:
Identify and Minimize the Risks Associated with Operating Their Businesses
Understand What Exit Options Are Available and Which is the Most Appropriate to Meet Their Personal and Financial Goals
Recognize What Factors Drive the Value of Their Business and Offer Strategies to Secure a Best-In-Class Business Valuation
Maximize Business Value at the Time of Sale and Minimize the Tax Liability Created by Selling Their Business
Manage the Resources Derived from the Sale of Their Business and Utilize Appropriate Estate Planning Strategies to Ensure the Creation and Preservation of Multi-Generational Wealth
OUR METHODOLOGY
Flight Plan Strategies utilizes the Exit Planning Institute’s 5-4-3-2-1 planning methodology.
Just as there are several distinct stages of flight (e.g. Pre-Flight, Takeoff, Climb, Cruise, Landing), we believe that there are 5 Stages of Value Maturity for your business. They are Identify, Protect, Build, Harvest, and Manage.
The first stage is Identify.
Since roughly 80-90% of your net worth is likely to be locked in your business, we must establish a system to determine the value hidden in your business. Unlocking that value at some point in the future will make a significant difference to your lifestyle and, at exit, will fund your next act. Establishing a baseline value for your business today is a key first step.
The Second stage is Protect.
After identifying your business’s baseline value, you must protect that value by mitigating any risks associated with it. Risks are divided into three categories: personal, financial, and business. Protecting current value is the first step in building future value. To best protect your value, consider the 5D’s: Death, Disability, Divorce, Distress, and Disagreement. Even if you do not think you will be affected by one of the 5D’s, without preparing for the worst, your value will be negatively impacted.
The Third stage is Build.
Once you have protected your existing value, your focus can expand to building future value. There are two ways to build value: increase your cash flow (EBITDA) and improve your multiple. Your multiple is the number assigned by the private capital market to the value of your tangible and intangible assets and their associated risks. Intangible assets include Human, Structural, Customer, and Social capital. Improving your intangible capital is critical to building business value.
The Fourth stage is Harvest.
Once you have protected your existing value, your focus can expand to building future value. There are two ways to build value: increase your cash flow (EBITDA) and improve your multiple. Your multiple is the number assigned by the private capital market to the value of your tangible and intangible assets and their associated risks. Intangible assets include Human, Structural, Customer, and Social capital. Improving your intangible capital is critical to building business value.
The Fifth stage is Manage.
You most likely manage value throughout the course of your business lifecycle, but the most important time to do so is after exiting your business. To achieve the most value, you have to manage not only your business value but your personal and personal financial value as well.
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What makes your business valuable? It is likely that 80% of your company’s value lies within the 4 Intangible Capitals, or the 4Cs. These Intangible Capitals comprise Human, Social, Customer, and Structural Capital.
Human Capital People are everything. The Human Capital in your business is one of the most difficult to navigate and one of the most important to develop. Human Capital is the measure of talent on your team. Many owners believe that finding and retaining top talent is the biggest challenge they face in growing their business. You must implement strategies to recruit, retain, and reward your key employees.
Social Capital This Social Capital, or company culture, embraces the people. How they communicate, what they believe in, and how they operate internally and externally are key components of a company’s culture. This is the “heartbeat” of the organization. Culture is what pulls people together and draws them to the organization as an employee or as a customer. Social Capital represents your brand, how your team works, the rhythm of the day-to-day operations, and the way you interact with customers. Developing strong Social Capital must be a deliberate process, and it can take years.
Customer Capital Without customers, you have no business, for obvious reasons. As small to lower middle-market companies, you likely face the dreaded customer concentration factor. One of the most effective ways to build value in your business is through strong Customer Capital. It is important to view your business from the eyes of your customer. This allows you to see where your business excels and your organization’s areas for growth. What are three things a customer would say your business does well and what would they say you should stop doing as an organization? By seeing your business through your customer’s eyes, you can address their pain points and better meet their needs.
Structural Capital Finally, the most robust of all intangible capitals is Structural Capital. It encompasses everything that makes your company work efficiently. The process, documentation, training programs, technology, tools, equipment, and real estate. When a business has strong structural capital, the company's success does not depend on any individual person’s ability to perform a specific task. This knowledge needs to be documented and transferable so that someone else can learn from you and apply it. Making this knowledge company property ensures that when your talent walks out the door at night, the knowledge doesn’t go with them.
When talking about buying and selling companies, many business owners get caught up in the purchase price, when the real number they should be focused on is net proceeds. The “net proceeds” of the sale refers to the cash the owners get at the close after taking care of all expenses, such as investment banking and transaction fees, accounting and legal fees, debt from the business, holdbacks, and earnouts, seller financing, and, of course, taxes. Although the net proceeds number is critical to determining what your business should sell for, it is only part of the equation. Net proceeds help establish the three financial gaps in your life. These gaps dictate what your business must sell for in order to live a fulfilled life after exit. The 3 Financial Gaps in Your Exit Plan are the Wealth Gap, Profit Gap, and Value Gap.
Your Wealth Gap is the difference between your current wealth and the amount you need in order to fund the life you want. To understand your wealth gap, you must investigate your personal goals and ambitions outside of the business. For example, an owner who wants to own a minor league baseball team in the next phase of their life will need more funds than an owner who wants to retire and live quietly on an old farm. Your goals, family, extended family, and personal ambitions should all be considered. Once identified, you can determine your wealth gap. Your net worth outside of the business plus the value of your company today equals your goal. In other words, if your goal was $10 million and you had $2 million of assets outside of the business, your wealth gap would be $8 million.
Using this example, the next step in the process is understanding if the business today is, in fact, worth $8 million. To get to the root of this, start by calculating your company’s Profit Gap. At a very high level, a profit gap is calculated by understanding the best-in-class earnings before interest, taxes, depreciation, and amortization (known as EBITDA) of businesses in the same industry. Next, assess your current EBITDA performance. The profit gap then is calculated by understanding how you can drive toward best-in-class performance by subtracting your company’s current EBITDA performance from the best-in-class EBITDA performance. For example, if your company is currently valued at $1 million in EBITDA while the best-in-class companies are generating $3 million in EBITDA, your business currently has a $2 million profit gap.
This EBITDA number is then applied to the company's sale price. Small and lower middle-market companies sell in a range of industry multiples dictated by the private capital market. For example, depending on your industry, your company could be selling in a range of multiples from 1X EBITDA to 6X EBITDA, with the best-in-class companies selling at the higher range. Given the same industry research, you can now identify your company’s value gap. The Value Gap considers the best-in-class performance and applies it to your company. For example, if best-in-class companies are performing at 15% EBITDA-to-revenue and your company is performing at 10% EBITDA-to-revenue, your company could improve performance, even at the same level of revenue, and generate another 5% in EBITDA. Improving your company’s ratio could dramatically increase the salable value of your company since buyers will be willing to pay a higher multiple for well-run companies.
As a business owner, exiting your business is likely the largest financial and personal decision you will make in your life. Successful exit strategies follow 2 Concurrent Paths: the Business Improvement Path and your Personal and Financial Planning Path. Failing to consider and plan for both paths equally will cause problems to arise in your life and your business.
As a business owner, you spend most of your life working in your business. According to Forbes, “nearly one quarter (23%) of business owners take fewer than two vacation days annually.” Work envelopes every aspect of a business owner’s life. Even on vacation, which is meant to be a break from work, 75% of business owners still conduct business activities. To have a prosperous exit, an owner must spend as much time working on their personal life as they do their business.
Business Owners like to have their stamp on every aspect of their business, but most do not realize how detrimental this can be to the success of their company. A business will fail if it depends on one person’s successes. So, if you are an owner and find yourself working late each evening, spending hours on the weekend troubleshooting problems, and taking time away from your family on vacations to handle a work crisis, your business is too owner-dependent to succeed after your exit. Instead of working in your business, as an owner, you should spend time working on the business to provide the most value. The best way to grow value in your business is for it to run independently from the owner. Investing time and resources to train other leaders in your business ensures they will run your business well after your exit.
On average, 30% of our lives, or 25 to 30 years, is spent working. Business owners, and in particular, Baby Boomer business owners, spend even more of their lives working. It is no wonder that thinking about exiting your business is stressful for many business owners. The thought of living your life without your business as the focal point is almost unimaginable.
Without planning for your next act after leaving your business, you will never feel fulfilled personally. If you exit your business at 60 or even 70, it is likely you will live another 20 to 30 years. It is important to have a vision for what you will do with that time. Having a full and complete exit plan that considers your business, financial, and personal needs is crucial for a profitable business exit.
The 1 Ultimate Goal of any successful exit plan is to ensure that you have the option to exit your business at the time of your choosing, for the maximum value possible, with the knowledge and resources necessary to provide a successful retirement outcome and preserve multi-generational wealth.
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OUR EXPERTISE
Flight Plan Strategies founder Kyle Winder spent a decade serving his country as a United States Air Force aviator. During this time, he became an expert in both strategic and tactical planning, acting as a C-130 Instructor Pilot, Tactics Officer, Executive Officer, and Combat Mission Commander.
After separating from the USAF in 2007, Kyle continued his service and continued to strengthen his planning methodology, albeit in a different context.
Embarking on a career in financial services, Kyle secured his master’s degree in Trust and Wealth Management from Campbell University before joining Fidelity Bank as an Operations Manager and then as Managing Director of its Trust & Investment Management department. Recognizing that he could help his business owner clientele better as an independent advisor, Kyle founded Flight Plan Financial in 2014, Flight Plan Benefits in 2019, and Flight Plan Strategies in 2021. These three disciplines form the pillars of The Flight Plan Group.
During this time, Kyle also served for six years as Chairman and President of the North Carolina Veteran’s Business Association (NCVetBiz), earning the SBA’s NC Veteran’s Business Advocate of the Year award in 2017.
Over the past 5 years, recognizing the increasing need for skilled business advisors, Kyle has earned his Certified Exit Planning Advisor (CEPA) designation from the Exit Planning Institute, his Retirement Income Certified Planner (RICP) designation from the American College of Financial Services, and his Certified Financial Fiduciary designation from the NACFF.
Additionally, Kyle has completed the training necessary to become a Certified Value Builder ™ and a Professional Exit Map Advisor, making both industry-leading tool sets available to his clients.
