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The 5 Stages of Value Maturity Podcast Series: Stage 3 – Build Value

In this five-part podcast series, we will be hosting 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 next several months, we will cover each of these five stages in a value maturity cycle:

Once you have identified both the actual and target values of your business and proactively taken steps to protect that value over the short and long term, it’s time to move onto stage three of the value maturity cycle – building value.

In order to prepare your small business for a transition, you’ll need to close the gap between its actual and target values – and building value will help you do just that. In addition, by focusing on growth over time, you will in turn attract more potential buyers for your company.

Although there are short-term actions you can implement, it’s important to remember that the process of building value occurs over a longer period of time – usually many years, or even decades. This requires having a strategic plan in place that will help guide your business in building that value. Essentially, this will involve enhancing and protecting both the tangible value (e.g., property, equipment) and intangible value (e.g., employees, customer relationships, work culture) of your company. However, the main focus should usually be on increasing intangible value, as it’s often more highly rated when valuing a business.

As you work toward building the value of your company, it’s important to keep these guidelines at the forefront of your mind:

  • Be disciplined in your approach, and plan/reassess accordingly
  • Document your processes and procedures to ensure intangible assets stay with your business upon transition
  • Account for all details relevant to executing your strategic plan

Ultimately, you must be able to measure your progress in terms of how your small business’s value has increased based on the action steps you have taken to build that value.

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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