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The 5 Stages of Value Maturity Podcast Series: Stage 5 – Manage Value

In this five-part podcast series, we have hosted exit planning expert Mike Trabert to discuss the five stages of a value maturity cycle that will help position your business for a successful transition. A partner at Skoda Minotti, Mike leads the firm’s Value Acceleration & Exit Planning and Transaction Advisory Services groups. He is a certified valuation analyst and the author of new e-book The 5 Stages of Value Maturity.

Over the past several months, we have covered the first four stages in a value maturity cycle:

Today, we will be discussing the final stage of the value maturity cycle – managing the value of your business. Although getting your company’s financial house in order is certainly a crucial step, it’s just as important that small-business owners focus on putting together a detailed plan for their personal financial matters after exiting a business.

Two key components of this step are estate planning and financial planning tasks. Essentially, this involves taking the time to review and make any necessary updates to important records – such as estate documents, insurance policies, and retirement accounts/pension beneficiary designations, to name a few – every three to five years, or when a major life event occurs. In addition, you’ll need to prepare a detailed budget and personal net worth statement. This will help develop a good understanding of your long-term spending needs in retirement and, based on that, determine the minimum selling price for your business in order to fund those needs.

As part of this financial model, it’s important to think through the many aspects of estate planning, such as who will handle the role of executor/trustee, how and when any heirs will receive their inheritance, custody arrangements for children and any charitable goals you may have. In addition, you’ll need to consider whether you are subject to estate taxes.

Lastly, be sure to develop a plan for your life after exiting the business. Although this is often neglected by many small-business owners, it’s important to think about how you’ll spend your time post-transition – whether it’s starting a new business, consulting for other companies, getting involved in the community or working on a hobby.

To learn more, listen to this week’s podcast with exit planning expert Mike Trabert!

Posted by: Jeffrey Kadlic

A co-founder and managing partner at Evolution, Jeffrey has spent the past 15 years as an investor and private equity professional with a true passion for working with dynamic small businesses. @kadlic

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