Follow Dallas Linkedin
Email Dallas Email
Financial
Oct 16, 2017

Minimizing Threats To Business Value

Sponsored Content provided by Dallas Romanowski - Managing Partner, Cornerstone Business Advisors

Many owners and advisors talk about the importance of growing business value, and there are nearly unlimited options to help business owners do just that.

But wouldn’t you agree that growing business value is pointless if you don’t know how to reduce the threats to that growth?

As you prepare for an eventual exit from your business, there are several threats to business value that you need to be aware of:

  • Key employees leaving the company and competing by taking customers, employees, and/or trade secrets
  • Key employees dying or otherwise leaving without a replacement
  • Data security breaches
  • Uninsured casualty loss
  • Fraud and embezzlement
  • Losses from high-risk operations
  • Any number of other economic, industry or internal threats.
Let’s look at three of the most common problems that minimizing business risk can position you to solve.


How Minimizing Business Risk Solves Problems

Minimizing business risk can position you to solve three problems.

1.  Harm to Transferable Value

Business risk increases as you grow your business’ transferable value because a vital part of increasing transferable value is making yourself inconsequential. As key employees take the reins to grow the company, they begin to manage and develop their own relationships with key customers, employees and vendors. This increased contact can turn ambitious key employees into risks. Unless you proactively change your role in the business, those key employees can suddenly leave the company, taking critical relationships with them. Proper planning can reduce this risk.

2.  Data Security Breaches

Data security breaches can destroy customer trust, especially when sensitive information is stolen. Without customer trust, business value may plummet, making an ownership transfer unbearably difficult. Minimizing this risk maintains the trust customers have in the company, thereby protecting the business’ value from outside threats.

3.  The Cost of Protecting Your Business

The third problem is one that owners often create themselves: Because they aren’t willing to pay the upfront costs to protect their businesses, they end up paying much more later to resolve problems that they could have prevented at the outset.

Properly protecting against business risk costs money, and these upfront costs might tempt you to ignore risks in hopes that nothing bad happens. However, ignoring business risks can be devastatingly expensive compared to addressing them early on.

An ounce of prevention is worth a pound of cure, so hiring experienced advisors to help identify and address business risks preserves and protects hard-earned business value, making a successful exit much more achievable than simply hoping nothing bad happens.

If minimizing business risk is an area in which you haven’t yet focused your attention, contact us today. We can help identify and begin to address threats to your business’ value.

© Copyright 2017 Business Enterprise Institute, Inc. All Rights Reserved
 
As a member of the Business Enterprise Institute (BEI), Cornerstone Business Advisors is an authorized distributor of BEI’s content and Exit Planning Tools.

The Cornerstone team includes former C-Level executives, successful entrepreneurs and advisers who offer unmatched experience in delivering advanced, custom-tailored, results-oriented solutions for business leaders. We developed the Performance Culture System™ to help clients implement best practices and drive high performance throughout their organization. For more information, visit www.launchgrowexit.com, call (910) 681-1420 or email [email protected].


 

Other Posts from Dallas Romanowski

Bizjournalblockad
Ico insights

INSIGHTS

SPONSORS' CONTENT
Dave sweyer 300 x 300

Allowing Pets at Your Rental Property: Why It's a Good Choice

Dave Sweyer - Sweyer Property Management
Cd

Don't Forget the "B"

Hoop Morgan - The Forté Institute, LLC
Screenshot2022 01 06at338 162234623

Genesis Bridge: Automating Connections to Contracts

Girard Newkirk - Genesis Block

Trending News

Galleria Property On Wrightsville Ave. Sold For $37.5M

Cece Nunn - Aug 10, 2022

Leland Town Center Lands New Tenant; Lowe’s Begins Construction

Johanna F. Still - Aug 10, 2022

Pipeline Poke Headed To Autumn Hall

Elizabeth White - Aug 10, 2022

Rachael Ray, Emeril Lagasse To Appear At GLOW Event

Justin Williams Pope - Aug 10, 2022

New Biz Creations In Cape Fear Region Continue Strong Trend

Johanna F. Still - Aug 9, 2022

In The Current Issue

Schools Face Nursing Shortage Crises

The pandemic-induced havoc on hospitals around the country still ricochets across systems today. A dire trend accelerated and emerged: a sho...


Film On Rebound; New Horse Enters Race

New soundstages in Wilmington are set to be constructed toward the end of the year – marking activity that appears hasn’t happened since the...


Stacking The (parking) Deck

The amount and cost of parking in urban settings is a ubiquitous topic, particularly in growing cities like Wilmington, where not everyone a...

Book On Business

The 2022 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

Trying to Grow a Business?
2020 Health Care Heroes
2020 WilmingtonBiz 100