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
Drewsmith copiersplus headshot

5 Things To Remember Regarding Your Copier Contract

Drew Smith - Copiers Plus
Mc2 56882

Landing Whales Requires A Larger Ocean With More Food

Scott Byers - Majestic Kitchen & Bath Creations
Mel wideopentech headshot

Kayak Carolina Launches Online Booking And A Rebrand

Mel Beasley - Wide Open Tech

Trending News

Market Street Motels Might Get Second Life As Apartments

Cece Nunn - Jul 22, 2021

In Wilmington Business Park, Another Office Building Planned

Cece Nunn - Jul 21, 2021

Family-owned Boutique Opens Off Military Cutoff Road

Staff Reports - Jul 23, 2021

Commercial Real Estate Firm Joins Global Company, Opens Office In Downtown Wilmington

Cece Nunn - Jul 23, 2021

CastleBranch: TekMountain Coworking Space Still Not Open For On-site Tenants

Christina Haley O'Neal - Jul 23, 2021

In The Current Issue

Info Junkie: Michelle Fogle

Fleet Feet Wilmington owner Michelle Fogle's reading recommendations and app picks for running and running her business....


MADE: Catching A Wave Of Demand

Two Wilmington-based manufacturers in the surfing industry continue to grow after co-locating under one roof. Paper Plane Surf Co., which ma...


The Muni: 'A Peach Of A Course'

Golf Magazine recently named the Wilmington Municipal Golf Course the best public course in North Carolina and No. 21 of the top 30 municipa...

Book On Business

The 2021 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