Strategic Benchmarking for Value - Driving the Direction of Your Company Value!
Whether you are one day, one year, or one decade away from transitioning the equity ownership of your business, Strategic Benchmarking for Value ("SBV") is critical if you want to grow the value of your Company. Every business owner wants to increase, sales, market share, operating profit, net cash flow, and ultimately the share value of their business, but not every business is ready to be sold. What if you can't achieve the value from a sale of your company that you need to sustain your lifestyle and meet your donative intent? What if you decide to hold onto the business and pass it on to your family under an internal transfer? Will the business be able to cash flow the transfer strategy and grow, or will it suffer? What if you decide not to sell your company, how will you assure yourself that revenue and margins will continue to increase over time?
SBV uses several tools and techniques to help you, your management team, and every employee in your business focus on that which is important for them to achieve your value enhancement goals. Whether you are selling, contemplating a sale or have decided to hold onto your business, SBV provides an integrated approach to enhancing value, delivers results every step of the way and gives you the tools necessary to monitor progress. Often times, a valuation firm will go through this "cloaked" process to determine the value of your company. They come up with a number without showing you what you are doing that is enhancing or destroying value, or what can be done to prepare your business for a successful sale. As discussed in our "Truths in business"; every closely held business pays for itself or stated another way; the value of our business is determined based its ability to generate net cash flow and the ability for it to continue to generate that cash flow after transfer of ownership. The inability for one person to transfer the "goodwill" of the Company to the other is called the "key man discount". Stated another way, no one is willing to pay you for business that can not be successfully transferred to the new owner. SBV not only increases cash flow, it shows you how the business can be successfully transferred to others, making your business more valuable.
The Process
Deciding to "grow" the value of your company is easy, deciding how you are going to create a strategic plan and who is going to help you implement a plan to grow the value of your company is another thing all together. Engaging ATICG to implement the SBV process requires a "point of entry". We determine, after a fact finding meeting, the most cost effective action plan using a holistic approach to value creation. This holistic approach requires an understanding of the competitive environment of your industry, while using that understanding to develop a systematic and consistent system of implementation of a pro-growth process. This process creates employee and management "buy-in" with a system that allows you to monitor the result and adjust the process each step of the way. Some points of entry include:
- Developing a process that calculates a Return on Strategic Effectiveness (ROSE Analysis).
- Development of Key Performance Indicators (KPI).
- Implementation of a Corporate Governance system.
- Development of a Strategic Risk Map.
- Personal Compensation Scorecards which develops a system of variable performance based compensation which is also in compliance with IRC §162(a)(1).
- Analysis of your Company's Strengths, Weaknesses, Opportunities, and Threats (SWOT).
- The determination of critical success factors (CSF).
- Development of a higher understanding of your Company's management and employees purpose, and direction based on their understanding of the external and internal factors -Organizational Effectiveness.
- Understanding and capturing your "cycle of customer interaction" which is a mapping process identifying the recurring nature of a customer relationship.
These and other points of entry give you the ability to decide where or how you enter the process, monitor the results, make adjustments to customize the process based on your needs, and allows you to decide when to enter into the next phase or item.
