Step 3: Building and Preserving Value

The elements that build the value of a business, or preserve the value that you have worked so hard to create and that buyers will pay for, are called Value Drivers.

Value Drivers include a stable and motivated management team, a realistic growth strategy and operating systems that improve the sustainability of cash flows. In this component, you and your advisors identify which Value Drivers in your business are important to meeting your objectives and design strategies to protect the tangible and intangible value of your business.

Possible Recommendations to Build and Preserve Value:

  • Management Team Development Plan
  • Plan to Transition Management Responsibility
  • Employee Compensation Review and Analysis
  • Qualified Retirement Plan Changes
  • Key Person Insurance Planning
  • Key Employee Incentive Compensation Plan (Stock Bonus Plan, Phantom Stock Plan, Stock Appreciation Rights Plan, Non-qualified Deferred Compensation Plan, Cash Bonus Plan)
  • Separation of Business Assets from Business Operations
  • Covenant Not to Compete

Learn about Step 4, Selling Your Company to a Third Party.