Transferable Value
Business value is important since it tells you what your business is worth to you, but transferable value is even more important since it tells you what your business is worth to someone else. Realizing transferable value requires focusing on three key valuation drivers: maximizing earnings and cash flow, creating a sustainable revenue and cash flow growth engine, and minimizing both the real and perceived risks to achieving both.
At this point, your Fractional CFO has worked side by side with you to build a foundation, enhance your business’ wellness, and grow your business’ valuation. Now, we’ll be there to help you achieve your final goal of creating transferable value. Whether you decide to remain in the business for years to come, or to make a nearer-term transition of some kind, building a business with sustainable, transferable value will make your business stronger and create options for what comes next for you and your business.
Our Transferable Value Services include the following:
Succession or Exit Planning
• Develop well-defined owner goals
• Identify attractive succession or exit alternatives
• Complete financial modeling of all relevant scenarios
• Evaluate financial and non-financial aspects of alternatives
• Insure that owner remains in control throughout the process
Business Readiness and Attractiveness
• “Readiness” encompasses the non-financial aspects of the business – the management team, business strategy, market position, proprietary technology and intellectual property, customer and vendor relationships, growth potential, business reputation, company culture, and the business’ ability to successfully operate without the owner’s continuing involvement
• “Attractiveness” encompasses the financial aspects of the business – growing revenue, EBITDA and cash flow, all supporting the high likelihood of successfully achieving the business’ strategy
• Identify any weaknesses in either Readiness or Attractiveness and implement changes required to mitigate these weaknesses
Valuation Drivers
• Business attributes – Readiness and Attractiveness
• Industry attributes – actual and perceived growth prospects for the business’ industry, barriers to new entrants to the industry, degree of industry consolidation , regulatory environment impacting the industry
• Market attributes – availability of debt and equity capital, interest rates and expected trends
• Process attributes – number of interested potential buyers, mix of strategic and financial (private equity) buyers, ability to generate multiple attractive offers
Coordination with Key Value Advisers
• M&A advisors
• Transaction attorney
• Wealth management advisor
• Tax accountant
• Estate planning attorney
Interested in learning more?
To learn more about how our Fractional CFO Services can help your business, please contact us to arrange a no-obligation introductory meeting.