The Business Insights Report
As we work with business owners on their business succession and exit plan, one of the biggest problems as you go down this journey towards exiting, selling, passing onto your children, or maybe even an employee share plan, is knowing where you’re starting from. Most business owners don’t have a realistic view of the value of their business. They either think it’s worth far more than it actually is, or they think it’s worth nothing when it actually has a value.
We always start with what we call a Business Insights Report. It’s an insight into the value of your business, and not just the dollar value or today’s value, but importantly, why the business is worth that much money and what you can do to change it. Most business owners are looking to grow the value of their business. That’s really hard to do. If you don’t know where you’re starting from and you don’t know why that number is actually the number it is, what is it that makes your business more valuable? What is it that detracts from the value or what is it that reduces the value?
Those things can be fixed. You can work through a system and a process to improve the valuation, not just profit, but also reducing risk, improving operations, better systemising and structure the way that your business runs. You’ll improve the valuation, but you have to know where you’re starting from.
The valuation that’s contained in our Business Insights Report is really just part one. Part two is what’s driving that number? What are the key metrics in your business that you can work on and improve to make you a more successful business owner, firstly, but more importantly, to increase your valuation? Because if you can do that, you will be able to sell your business for more money or you’ll be able to pass on to your family or children, a better business, better prepared, and more valuable, and importantly, with less risk.
Start with the valuation. It gives you a really great place to start your journey and work out what you need to do next in terms of preparing for succession or exit.