The first step in building the business value necessary to achieve the post-business exit lifestyle he or she desires by creating a written value-building plan that:
- outlines what must be done to reach your goals;
- makes specific recommendations about how to achieve each task;
- designates the person(s) responsible for accomplishing each task; and
- holds everyone accountable to a timetable for achieving each task.
In creating a value-building plan, we’ve organized our recommendations (or tasks) into categories including:
- Business fundamentals
- Strategic planning
- Internal operations
- Leveraging human resources
- Financial measurement and management
- Benchmarking and measuring success
Under the heading of “Business Fundamentals” we put the housekeeping activities that reduce your exposure to risk of loss. We do that first because before we work to increase value, we want to make sure that mechanisms are in place to protect significant business value. We divide business fundamentals into four areas:
- Ownership rights and responsibilities
- Facilities management
- Employee errors
Ownership rights and responsibilities
Are your corporate records in order? Is each share of stock documented? If you are a co-owner, are the rights and responsibilities of each owner clearly documented, understood by all owners and implemented? Do you know what will happen if one owner becomes ill or dies? Has the company paid for any perks for family members?
Minimize risk of loss from facilities management
You need to know where your company is most vulnerable to loss in its activities. Vulnerable areas might be in: services, manufacturing, assembly, inventory, publishing / printing / duplication, records management and maintenance, or research and development. You may also need to take a look at your operating space especially if it has grown on an as-needed basis, rather than from a carefully conceived design.
Minimize risk of loss from competitors
Have you taken time lately to identify all of your direct and indirect competitors? Have you evaluated them in terms of their ability to threaten your organization? Can you avoid future threats from competitors?
Minimize risk of loss from employee errors
In the past 12 months, has an employee made an error that cost your company significant money? How did that error occur? What measures can be put in place to prevent similar errors in the future?
This article contains excerpts from an article in The Exit Planning Review™ published by Business Enterprise Institute, Inc. Subsequent issues of The Exit Planning Review™ provide unbiased and advertising-free information about all aspects of Exit Planning. Please contact us or if you would like to sign up for a free subscription to The Exit Planning Review™, if you have any questions or want additional Exit Planning information.