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
Carolinemontgomery4

Trade Crypto Currency? Chances Are The IRS Knows About It

Caroline Montgomery - Adam Shay CPA, PLLC
Mike stonestreet 300x300

The Value of Partnering with Financial Institutions

Mike Stonestreet - CAMS (Community Association Management Services)
Billhunter300x300 b&w

Is Your Phone Listening?

Bill Hunter - Wilmington Design Company

Trending News

Realtor Submits Site Plans For Luxury Condos, Executive Office Center

Cece Nunn - Aug 22, 2019

Firm's Expansion Expected To Lead To New CRO Jobs In Wilmington

Cece Nunn - Aug 22, 2019

SummerFest 19 To Include Street Food Cook-off At Battleship Park

Jessica Maurer - Aug 21, 2019

Timeline In Motion For Castle St. Redevelopment Project

Christina Haley O'Neal - Aug 21, 2019

Drift Coffee  & Kitchen Now Open At Mayfaire 

Jessica Maurer - Aug 21, 2019

In The Current Issue

ILM Passenger Numbers Trending Up

The number of travelers using the growing Wilmington International Airport has soared each month in 2019 compared to the same month the prev...


MADE: For Retailer, It's In The Bag

Find out more about Holly Aiken Bags, a company that creates handbags and accessories handmade in Wilmington and Raleigh....


Local Distillery Makes A Splash

With Brooke Bloomquist’s background in marketing and special events and her father’s naval career and business prowess, their masterminding...

Book On Business

The 2019 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

WILMA's Leadership Accelerator
Power Breakfast - The H Word (June 13, 2019)
2019 WilmingtonBiz Expo Keynote Lunch - CEO, nCino, Pierre Naude`