Value Adding Navigator™ – This is an example How a Trusted Business Advisor can help you add value to your business.
Trusted Business Advisors work with business owners and their advisors to:
• Determine the value of their business or intellectual property.
• Build and grow the value by addressing financial strengths and weaknesses to reflect potential to maximize value.
• Maximize capital markets choices by grading appropriate methods for advancing the business.
• Create liquidity options and strategic advice with a comprehensive approach.
• Benchmark results in enterprise value, including intangible value.
VALUE DRIVERS IMPROVE CORPORATE VALUE
• Different factors drive and impact the values of businesses.
• These are value drivers that make a business more or less attractive to lenders, buyers, and investors.
• Addressing those value drivers is important in distinguishing the value of the subject business from its counterparts in its industry.
Bottom line – your value drivers integrated into an interactive high-touch approach result in greater value.
• Value drivers help you focus on the value habit by aligning performance measures:
• Human Resources and Organization − Talent & Quality of Management
• Sales and Marketing & Innovation − Customer Retention – Quality of Products & Services
• Financial Soundness − Ability to Finance the Plan
• Physical Assets and Systems/Administration − Available to achieve the Plan
• Creating Real Change That Creates Real Value
• Tactics Supporting Differentiation Strategy
• Tactics Supporting Cost Leadership Strategy
• Tangible Objectives Mapped to Develop Critical Habits
• While building the Value Driver Roadmap™ with your management team, your Trust Business Advisor will continually address:
• When to develop a value habit?
• What makes any company valuable?
• Who benefits from increased value?
• How can we improve this?
• Why are we improving this?
Business Development – A Trust Business Advisor works with your team to identify and target new markets, maximize sales with existing customers and align your company sales and marketing organization to achieve accelerated, profitable revenue growth.
Focused areas include:
Evaluation of markets/customer needs, competitor strengths & weaknesses and industry trends
Development and implementation of go-to-market strategies, strategic-channel relationships, sales and marketing alignment and sales campaigns
Implementation of sales policies and processes:
• Account planning and performance monitoring
• Formal proposal and presentation management and writing
• Pitch and presentation rehearsals
Generating market/customer sales funnel and follow-up sales activities.
Business expansion targets U.S. markets, and focused markets internationally.
Cost and Expense Reduction – Examples of dramatic one-time or long-term savings:
Business sale of 30% to100% of your company can have a life-time tax-deferral (IRC §1042) when sold to your employees via an ESOP. Using an ESOP Feasibility Study and ESOP Business
Valuation, your employees are the buyer and you control the transaction. Per $1 million, the tax deferral is approximately $360,000.
Charitable contribution of your company stock rather than cash will save you approximately $63,000 of taxes per $163,000 of stock gifted.
Employee Stock Appreciation Rights (Phantom Stock) allows you to pay bonuses with employee participation in the future growth of your company rather than current cash, without giving
shareholder rights to your employees. Every $100,000 you give (to this non-ERISA plan) creates happy employees now and provides tax savings in the year exercised.
Ultimately, the purpose of adding value is to maximize a return on investment for your business interest. When you are ready for this next step:
Send the right level of information at the appropriate time to prospective investors and lenders.
Recognize the attention spans of prospective investors and lenders.
Understand the fit for the right institutional or individual investors and lenders based on their and previous investments.
Provide realistic and credible projections and valuation that includes the real capital need.
Assess industry and competition, and what it takes to better impact the market.
Address risk factors and be prepared for the tough questions.
Create appropriate competition and timing for investment.
Have a question on valuations? Contact Michael Gilburd.