Enhancing Value for Succession Planning

After devoting so much time and effort to building your business, maximizing its value becomes more important as the timeframe for a succession plan grows near. Estimating a value for the business is one important step to undertake at the outset of the succession planning process. From that starting point, you can then plan for enhancing value for the eventual exit from the business, and focus on the areas that can “drive” increases in exit value. These areas are commonly referred to as value drivers.

What Are Value Drivers?

While you might not be considering selling your business now, that day may come sooner than you think, so it’s important to focus on your business’ value. A value driver is an important facet of your business that drives improvement in cash flows and/or reduces risks, and therefore increases the value of your business. There are value drivers that can vary by industry, so check with a Corrigan Krause professional to make sure you’re considering your important value drivers, such as:

Management
Employees
Reduction/Mitigation of Other Risks
Revenues
Cash Flow

Additionally, having a planning mindset for “five years down the road”, so there are explanations and/or analyses ready for potential future buyers, will help to enhance the value of your business.

For a more comprehensive list of value drivers developed by the team at Corrigan Krause, click here.

To help walk you through succession planning and valuation issues for your business, meet with one of our consulting team focused in these important planning areas, Tom Harrison, CPA, CEPA, Tom Krause, CPA, and Derek Solomon, CPA, MA, CVA, and chart the course for your future. The certification, training and experience of this group includes the Certified Exit Planning Advisor designation of the Exit Planning Institute and the Certified Valuation Analyst designation of the National Association of Certified Valuators and Analysts. Don’t wait. Start the conversation today by reaching out to us at info@corrigankrause.com.

Even if you’re not currently planning any major transition, unplanned transitions are an unpredictable possibility in life. An unplanned transition often falls into one of these categories: death, disability, disagreement and distress. You’ll want to ensure you are making planning decisions today that will prepare you and your company for whatever may come.