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Value Enhancement

Building a truly valuable business takes time and sacrifice. The life’s work and dreams of owners are in the business they have built and over eight-five percent (85%) of business owners are dependent on the value of their business for a successful transition. Unfortunately, for various reasons, most private businesses can’t successfully sell or transfer.It’s a pattern that is replicated across the US every day. Business owners, excited about the prospect of selling their businesses and moving on to their next phases of life, are confronted by the stark realization that their business values are nowhere near what they expected, or what they need to finance their desired future lifestyles. They face the Value Gap and, in determining how to close it, they often choose the wrong path, right from the outset.

Most business owners conclude that, in order to realize the value they need, their businesses must become larger and more profitable, so they turn to the only options they know about: growing sales, reducing costs, or, making an acquisition. The problem is that none of these strategies represent the most effective initial way to maximize the value of their businesses.

  • Attempts to aggressively increase sales often come with the undesirable side effect of adding risk to the business, because the organization is not properly structured to absorb the growth. This type of growth is not sustainable.
  • Reducing costs often means either eliminating positions or sacrificing the quality of some element of operations. Eliminating positions usually involves adding more workload to an already thinly stretched workforce, while sacrificing quality eventually leads to inferior products or services and lost future revenue. Both outcomes reduce the business’s sustainability, increase its risk profile and reduce its overall business value. This also may affect employee loyalty and retention.
  • Acquisitions present a whole other set of challenges, especially for the business that is not organizationally strong enough to manage the complexities of successfully integrating another business. The dilution of management’s attention alone, as it tries to focus on two different businesses and an integration process, can have the devastating effect of not only causing the acquisition to fail, but also jeopardizing its core business.

There is another way to maximize business value. It’s easier, more controllable, more predictable, more sustainable, and more effective than chasing sales or margins, or making an acquisition. While it doesn’t require growth in sales, margins, or profitability
growth in each area typically follows as a byproduct. It’s the process of strengthening the business from the inside out by reducing its “company specific” risk which, in turn, increases its value. The process focuses on key areas of strategic planning, leadership, people, sales, marketing, operations, finance and legal. We work with you to develop a customized roadmap to maximize the value of your business.