CONFIDENTIAL Independent Medical Respiratory DME Pharmacies - PDF document

CONFIDENTIAL Independent Medical Respiratory DME Pharmacies Equipment Care Suppliers CONFIDENTIAL 1

CONFIDENTIAL Table of Table of Contents Contents Topic: Page The Brokers role……………………..........3 1. Pricing the business………………........…3 2. Sharing objectives…………………...........4 3. Value – vs – Price……………………........5 4. Jim King Biography………………...…...... 6 5. The path to settlement………………....... 7 6. 5 Step Marketing Plan…...…….…............8 7. Our value proposition………………..........9 8. Agreement Basics……………..……...... 10 9. Actual Agreement.…………….….…...... 11 10. DocuSign Information............................ 13 11. CONFIDENTIAL 2

CONFIDENTIAL Marketing Factors The role of the business broker When selling a business confidentiality is almost always a significant and material issue. This makes marketing a going concern business a more difficult task and sets it apart from selling residential real estate, commercial real estate, and investment properties. In order to market your business we must first prepare a “Confidential Business Review or Abstract” and then place the listing on several local, nationwide/worldwide business listing services. Buyers are required to submit a signed Non-Disclosure Agreement before any business specific information is exchanged. Your broker’s objective is to get your business sold to the best qualified buyer at the highest possible price as soon as possible. Your broker will manage every phase of the sales process to maximize our promotional efforts, represent your best interests, and to use his/her experience and best practices to make the transaction go smoothly. Pricing and positioning in the marketplace Your business must be favorably priced based on location, income, earnings and terms compared to the other businesses that the buyer is considering. Small businesses usually sell for up to 4 times the Seller’s Discretionary Cash Flow. Six reasons to price your business correct from the start: Faster sale Less inconvenience More Prospects Agent enthusiasm Higher offers Higher net equity CONFIDENTIAL 3

CONFIDENTIAL Value -vs- Price (Most Probable Selling Price) Value: Price: The value of a property, That amount of money or a business, is a a ready, willing, and perception or able buyer will give a speculation of worth seller to acquire a which resides within the property or a business. mind of the current owner. Buyers rely heavily on market data and return on investment calculations to The first question a business determine the price they are owner usually asks a business willing to pay for a property or broker is “What is my business business. worth?” Realistically: Seller’s must ask Seller’s must ask Realistically: themselves “What would I pay for this themselves “What would I pay for this business if it weren’t mine?” business if it weren’t mine?” CONFIDENTIAL 4

CONFIDENTIAL We Have Mutual Objectives….to sell your business… At the highest possible price… Getting to know as much as possible about your business is integral to being able to get the highest price for your business. The better we get to know your business the more likely we will be able to convince others of the value. In the shortest period of time… Generally, it takes longer to sell a business than a house. The most recent industry survey indicates that it takes on average 7-12 months to go from listing to settlement . Beware of those that would tell you they can “almost” guarantee you a quick sale. Under the most favorable terms… Negotiating the most favorable terms is a critical brokerage skill. It has long been the unspoken rule of business brokering that businesses are sold on Price or Terms . The benefit of having an experienced negotiator on your side can be one of the most valuable reasons to work with a professional business broker. We can not guarantee a sale… (But, we can come close!) According to a recent national study, only one out of every 7 Main Street businesses listed are ever sold. Our experience selling these businesses is for the most part very similar, however… We have a 100% success ratio spanning over 10 years listing and selling Medical related businesses. CONFIDENTIAL 5

CONFIDENTIAL James M. King, CBI, ACP President—King & King, LLC E-mail: jking@KingandKingLLC.com Dir: (410) 303-6378 Previous Professional Experience: Prior to establishing KKBA in 2004, Mr. King served as the Senior Vice President, Controller, and Chief Operating Officer of one of the largest business brokerage firms in America. Under his leadership revenues were increased by 100% and the number of brokers affiliated with the company grew by 100%. During Mr. King’s tenure he lead a team that developed, designed, and implemented, the companies first web based listing management and broker management system, implemented the companies first computerized financial accounting system, and, established multi media “New Broker” and “Advanced Broker” training programs. Before joining the prior brokerage firm Mr. King spent several years at KPMG, LLP , (the world’s third largest public accounting firm), where he worked with Fortune 500 clients to develop and implement business solutions and tax strategies designed to improve operations and reduce federal, state and local taxes. Prior to KPMG, LLP Mr. King held management level positions in other boutique tax and accounting firms and founded a growth oriented, roll-up company in the commercial security and fire alarm business that successfully acquired and merged over 17 companies in a five year period. Professional Activities and Affiliations: International Business Brokers Association Mid-Atlantic Business Brokers Association (Immediate Past President and Member B.O.D.) National Association of Realtors Maryland Association of Realtors Frederick County Board of Realtors National Community Pharmacists Association Maryland National Capital Homecare Association CONFIDENTIAL 6

CONFIDENTIAL Business Selling Process CONFIDENTIAL 7

CONFIDENTIAL Our 5 Step Marketing Plan 1. Collect pertinent business data on assets, operations and financial performance. 2. Determine most probable selling price, establish asking price. 3. Prepare Business Abstract and/or Confidential Business Review (CBR) and various marketing pieces. EXCLUSIVE 4. Place internet ads, Flash-mail listing announcement to our database of over 6,000 registered buyers EXCLUSIVE 5. Promote your business to CBI’s, Investors, Equity Buyers, and Strategic Buyer (local and national). Notice: King & King will use its best efforts to sell your business. However, we do not guarantee a sale. King & King will, at it’s own discretion, determine which of the above marketing efforts are appropriate for any specific listings. CONFIDENTIAL 8

CONFIDENTIAL What would it cost you to try to What would it cost you to try to replicate our marketing plan? replicate our marketing plan? ON LINE ADS COST BizBuySell Ad cost 12 months $719 IBBA (indefinite) $375 MABIA (indefinite) $375 King & King (indefinite) $375 PRINT ADS (Flash Mail Included) CRS, Realtors General, Database Flash Flyers (3X $390 each) Up to - $2,234, or more CONFIDENTIAL 9

CONFIDENTIAL Agreement Basics Performance Guarantee - This Agreement Can Be Cancelled Though our standard agreements are all for an initial term of one year, in the event you become dissatisfied with our service you can cancel this agreement. We encourage you to read the listing agreement and ask whatever questions you might have prior to engaging us to sell your business. Professional Service Fee “Success Based” The professional service fee is calculated on the gross sales price of your business. In the event we work with other brokers outside of our affiliate group to sell your business, they will be paid by us or by their client. Our standard professional fee for business sales of $500K or less is 10% of the gross sales price of your business, or $12,500, whichever is greater. Sales $501K to $750K – 9% with a minimum fee of $25,000 Sales $751K to $1.5M – 8% with a minimum fee of $50,000 Sales $1.51M to $2.5M – 7% with a minimum fee of $75,000 Sales $2.51M to $5.0M – 6% with a minimum fee of $100,000 Retainer - Like most professional service firms that provide business advisory and consulting services, we too require a modest non-refundable retainer to begin an engagement. The retainer is booked as a credit towards your professional service fee and is used to defray some of the up- front administrative and marketing costs we incur to start the marketing process and to allow us to offer you a cancellable agreement. CONFIDENTIAL 10