Readiness Analysis

Value & Value Building

You indicated in your assessment answers that you don't know the estimated value of your business.

In order to accurately determine the value of your company for purposes of transition planning, we strongly believe it is important to obtain a business valuation from an accredited specialist.

This can be a formal opinion of value or an “informal” valuation. The latter - “An Approximation or Calculation of Value” - is a less expensive, informal valuation alternative, for an owner attempting to get an independent assessment of the value of his/her business. These are frequently used in conjunction with early transition planning and assessing potential exit options.

It is important to note that there are over a dozen different business values (owner value, buyer value, fair market value, collateral value, etc.) and an independent calculation done by a professional may be needed to add integrity to the ‘Financial Needs Analysis’ and value gap analysis which are discussed in sections of this report.

In conjunction with your assessment answers, the following list represents many of the key elements that buyers often look for when evaluating a particular acquisition target, and this below can be used as checklist to complete, in order to maximize your company value prior to putting the business on the market:

• Can this business operate independently of the owner?
• Does the business have a unique industry differentiator that sets it apart from all others?
• Is the business generating sustainable profits?
• Is the customer base diversified and capable of further business development?
• Is there an untapped market for its products or services?
• Are its systems and processes considered first rate for its industry standards?
• Is the right team in place for operating and growing the business?
• Are there proprietary assets that might have significant future value?
• Does the business have contracts in place with key stakeholders – customers, suppliers, employees, other co-owners?
• Are there potential liabilities that could damage the future value of the business?
• Is there a business plan in effect that demonstrates the potential growth in business value past the date a buyer would take over the business?

Lastly, based on your responses in the questionnaire, we have listed the key business deficiencies you identified:

• My business relies on me being there to run it

This item must be carefully addressed to build the value of your business, and to help you successfully meet your own exit/transition objectives. Further reflection might likely be required to identify and acknowledge other potential deficiencies in your business which have not been listed.