Exit Planning / Succession Planning: Business Value – Do You Know What Your Business is Worth?

Article By David Shavzin, CMC

Exit Planning or Succession Planning is a PROCESS. When I speak on exit planning / succession planning, I talk about four high-level steps. See also Step 1: Exit Planning / Succession Planning is a TEAM SPORT , Step 3: Transferable Value Drivers – Exit / Succession Planning and Step 4: Business Exit Options.

 

Step 2: Knowing Your Business Value

Why is it important to know what your business is worth?

Well, the obvious answer is so that you know how much to ask for it when you are ready to sell.
But what about today? Do you know what it is worth right now? When I ask business owners about their business value, I often get an answer that goes something like this: “Oh I don’t know, I have at least a few years to go before I am ready to sell. So, why should I care about that now.”
Having an exit plan is critical. With your advisors in place, the next step is to know what your business is worth today.

A few good reasons to understand your business value TODAY:

• What if someone approached you today with an offer to buy your business? Would you know if it was a fair offer? (And don’t say you wouldn’t sell! If that check was big enough…)
• What if you have to sell before you are “ready”? Accidents happen, health issues happen, the economy has its ups and downs.
• If you have a target value in mind, how do you know if you are on track to achieving that business value for your exit? Understanding your value today can serve as a benchmark to track growth toward your target exit value…and signal a problem if you are not growing as you need to for an exit when you want to leave.

The Bottom Line
Know your business value! Get a simple valuation done and develop a game plan with specific targets and timelines. Implement each step in the plan and monitor results at least monthly to ensure you are on track. Update the valuation annually to make sure you are ready when the time and money are right for YOU!

Not sure how to start? Give us a call!

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More Reading:

Step 1: Exit Planning / Succession Planning is a TEAM SPORT

Step 3: Transferable Value Drivers – Exit / Succession Planning

Step 4: Business Exit Options.

Business Transition – Case Study

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David Shavzin, CMC

Shavzin and Associates, Inc.

Valuation, Succession, Exit Planning, Building Value for Sale

Atlanta, Georgia
770-329-5224
Our BLOG
LinkedIn
dshavzin@shavzinassociates.com
www.ShavzinAssociates.com

Talent Acquisition In The New Normal Requires A Social Media Strategy

It isn't easy managing human resources in the new normal!

In the past year, I've been involved in consulting engagements to help small to midsize companies improve their team building efforts.  These folks are finding it difficult to attract talent, especially as the market has tightened.  They need help, but they're reluctant to engage professional help.

In this connection, I had an interesting discussion with a senior executive for a major financial services company located in the northern suburbs of Atlanta. He is having difficulty attracting new agents and keeping existing employees engaged. I listened to his frustrations for ninety minutes.  What I found most interesting was not what he said, but what he didn't say. He did not speak of a recruiting strategy using social media.  As we were closing our discussion, I suggested that his company would be well served by treating employees and recruits as customers. His feedback to that comment was entirely nonverbal, a blank stare indicating total confusion. If I was to draw a cartoon image of the encounter the caption over his head would've read "tilt." He failed to make the connection.

Major companies have the resources to support their recruiting program and to understand the needs of their labor force. They actively manage their culture and invest in tools to achieve their recruiting and selection goals. They monitor the attitudes of their employees and respond to their needs. They treat their employees like customers.

SEND ME THE FREE EXECUTIVE RESUME CHEAT SHEET!

I am reminded of a former employer before I started my recruiting business. It was a major consumer products company that placed a high value on manpower planning. In many respects, they set the standard for creating a highly productive, engaged workforce. One year they did a climate survey of the corporate office staff which generated some interesting results. The employees complained that they worked so many hours that they had little time for mundane personal tasks like banking or Dry Cleaning. This company, being highly responsive to the needs of their internal customers remodeled the corporate office adding a branch bank and laundry service. Clearly, their heart was in the right place, even if they missed the point of the feedback. The employees wanted their company to dial back the workload so they could choose how to improve their quality of life.  Now I must admit that this is third-hand information so it could be erroneous, however, based on my time working for this company, this story rings true.   I am confident that their response today is more on target.

Smaller companies have a more difficult time with recruiting, selection, onboarding,  and retention. They're focused on client acquisition, but don't quite understand how to maintain a highly productive workforce while minimizing turnover.  Most have had little training in the fundamentals of interviewing or making effective hiring decisions.

Much of the labor pool is composed of millennials who Baby-Boomers find difficult to understand. They have a distinct set of values and expectations from employment. They must be recruited and managed differently. Social media can be a very powerful  tool in this regard.

Many mid-caps are out of phase with the labor market in the new normal. They may be making a heroic effort toward consumer outreach, but they are old-school in the way they recruit new employees. In fact, many don't understand the new employment dynamic.  They are using outdated strategies that just don't work.


Most companies are doing well with their digital marketing efforts to attract new customers. To be competitive at talent acquisition they must employ the same strategies.  They should be developing communities of prospective employees and keep them interested in the opportunity for employment. The goal is to generate a continuous flow of job seekers, minimizing the need for outside recruiters. To support this strategy, training is recommended to become better interviewers and to improve candidate selection decisions.  To minimize turnover and to keep employees engaged, customer loyalty programs should be developed for employees. 

Treat job seekers as customers for successful talent acquisition in The New Normal.

Thank you for visiting my blog.  I hope you enjoyed my point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.

Your feedback helps me continue to publish articles that you want to read. Your input is important to me so; please leave a comment.


Jim Weber, President
New Century Dynamics Executive Search
JimWeber@NewCenturyDynamics.com
Author of: Fighting Alligators: Job Search Strategy For The New Normal







Current Assignments
1. COO- Atlanta-based Casual Dining Restaurant Company - New
2. Controller - Atlanta-based Consumer Products - Digital Company - New
3. Director of Biz Dev, Atlanta-based B2B Professional Services Company:    Completed
4. Payroll-Benefits Manager, Atlanta-based Retail Company:  Complete
5. Senior Accounting Manager – Atlanta-based Manufacturer. Complete
6. Controller - Atlanta-based Restaurant Company: New
7. Outplacement Assignment - Atlanta-based Manufacturer:  New

New Century Dynamics Has Landed Another Controller Search Assignment!

New Century Dynamics is pleased to announce a new search assignment for a Financial Controller.  The Client is an Atlanta-based, CPG-digital company.
This position reports directly to the President and CEO and has responsibility for overseeing the Human Resources functions.

This position is part of the company’s leadership team.  It is responsible for interfacing with financial systems to ensure that financial and operational data are available in a meaningful format to support timely decisions. The function’s strategic component centers around developing new ideas, systems, and technology, while analyzing and improving on old ones.  Areas of primary concern include inventory and supply chain, relationships with professional and financial services providers, and providing leadership.

Position Requirements:
Must have a minimum of 10 years of strong operational experience: ideally has worked in a senior management role for two years in a small business or startup. Experience working for a consumer product or E commerce company is strongly preferred.
Demonstrated experience in financial planning and analysis with previous experience overseeing human resources, information technology, and legal.
Skills should include organizational development, personnel management, budget and resource development, and strategic planning.

For more information and your referrals contact me at:

James E. Weber, President

NEW CENTURY DYNAMICS EXECUTIVE SEARCH

Experts in the Confidential Search!

770-649-7051

JimWeber@newcenturydynamics.com

www.newcenturydynamics.com

 

Blog:  FIGHTING ALLIGATORS

Exit Planning / Succession Planning – a Team Sport

by David Shavzin

Exit Planning or Succession Planning is a Team Sport. When I speak on exit planning/succession planning, I talk about four high-level steps; Succession Planning; Knowing Your Business Value; Transferable Value Drivers; Exit / Succession Planning; and Business Exit Options.

Step 1: Exit and Succession Planning is a Team Sport

We have advisers and coaches in all facets of life. But in this most important area for our future, for our family and for our retirement, most business owners are pretty much just “winging it”. Oh, they may have an accountant but not much more of a team to focus on exit planning in all its facets.


That team is critical for successful succession planning.


Business owners start their companies to create their future. But they often lose sight of the key to making that future happen – building value. They get caught up in the day-to-day and don’t get to implementing the sustainable, positive change that allows them to transition on their own terms.
Consider: “…78 percent of small-business-owner clients plan to sell their businesses to fund their retirement. The proceeds are needed to fund 60 percent to 100 percent of their retirement needs. Yet, less than 30 percent of clients actually have a written succession plan…”
[I would suggest that 30% is generous, and even if accurate, that those plans are not very effective, for growth or for exit planning.]

When I speak on exit planning/succession planning/transition planning, I talk about four high-level components.   The first component is to Build a Team of Advisers.

Nobody knows everything about everything. Many of my clients are in creative industries, designing, creating, building. You don’t want me in that role. But I have worked with many organizations and have a different experience and skill set than my clients. I bring ideas and experience from many industries and many client engagements. The other critical exit planning team members bring their own expertise to the table. These should include:

• Business Consultant / Coach
• CPA
• Financial Adviser
• Business Attorney
• Insurance Expert
• Estate Planning Attorney
• Banker
• Business Transaction Expert

When I work with a client, we build this team. The players may already be in place. Or, we may bring in advisers where there is a gap. Either way, we need this core team working with the owner. A business is complex. An action taken in marketing impacts finance, HR, and more. Big decisions need to take into account the effect on the whole organization and should support clear goals focused on building value.


The client receives much better advice and guidance with this approach.

This does not mean that you are going to start hiring all of these people and employing them full time as you work toward your transition…especially if you have a few years to go. But, you should use them strategically as you build your business plan/succession plan. With major decisions on growth, expenditures, hiring…engage their expertise.


The Bottom Line

Find advisers who understand what you are all about. And, find those who understand your growth and exit planning objectives. More importantly, find advisers with whom you can feel comfortable. Make sure that they can work together and with you as a team.

David Shavzin, CMC
Shavzin & Associates, Inc.

770-329-5224
Our BLOG // LinkedIn // www.ShavzinAssociates.com 
dshavzin@shavzinassociates.com


Thank you for visiting my blog.  I hope you enjoyed my point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.

Your feedback helps me continue to publish articles that you want to read. Your input is important to me so; please leave a comment.

Jim Weber, President
New Century Dynamics Executive Search
JimWeber@NewCenturyDynamics.com
Author of: Fighting Alligators: Job Search Strategy For The New Normal

Current Assignments
1. COO- Atlanta-based Casual Dining Restaurant Company - New
2. Controller - Atlanta-based Consumer Products - Digital Company - New
3. Director of Biz Dev, Atlanta-based B2B Professional Services Company: Complete
4. Payroll-Benefits Manager, Atlanta-based Retail Company:  Complete
5. Senior Accounting Manager – Atlanta-based Manufacturer. Complete
6. Controller - Atlanta-based Restaurant Company: New
7. Outplacement Assignment - Atlanta-based Manufacturer:  New

Business Development’s Role in Digital Social Media

The Currency of Digital Social Media is Visibility

The Value of Visibility is a Derivative of Relevance of Content

Trying to frame the workings of the internet within the context of traditional offline business activity is analogous to applying the terminology horseless carriage to describe the automobile circa 1900.  The internet opens up seemingly unlimited possibilities; however one must be ready to expand their range of thinking to maximize its potential much like comparing playing chess on a traditional chessboard to playing on a 3D chessboard.

This new way of thinking an be illustrated by how CBS has shifted its evaluation of  programming from traditional Nielsen ratings to their ranking on social media.  Quick question: Which late night TV host is most followed on the internet?  You might be surprised to learn it is not Jimmy Fallon or Stephen Colbert; the two leading hosts ranked by Nielsen, the arbiter of television ratings.  They are not even close.  Nor is it one of the other 11:30 pm primetime late night show hosts.  It is James Corden, who follows Stephen Colbert on CBS at 12:30 pm EST. 

Fallon, Colbert and the other late night hosts are not carried by local broadcast stations globally, neither is Corden.  But Corden’s popular recurring sketch, Carpool Karaoke in which he sings with singing sensations and celebrities such as Mariah Carey, Justin Bieber, and with Michele Obama have been outrageously successful on the internet.  The clip of Corden singing with Adele alone had over 129 million views and was the most-watched YouTube video of 2016. 

CBS, the network that broadcasts Corden’s, The Late Late Night Show refers to Corden’s global popularity as having relevance and defines relevance as a value in the currency of visibility.  Similar to Bitcoin currency, the currency of visibility is ethereal and must be converted to U.S. dollar currency.    CBS monetized Corden’s relevance by creating a Car Karaoke YouTube channel and partnering with Google AdSense generating revenue from the number of views from the show’s nine million subscribers.*

The fundamental marketing principle for developing business through digital social media is that the more people who become aware of your company increase the potential for doing business with them and their companies.  Search engine optimization for online social media sites allows for individual customization of your marketing message.  More importantly, it provides the opportunity to have a dialogue between your potential client and your company.

The challenge for most companies is how they can profit from digital social media.  One rule has been established by the market; you should not use digital social media to blatantly advertise or to directly sell anything. 

As dramatically demonstrated by CBS and Corden, relevant content is the secret sauce that distinguishes and elevates your visibility over the competition.  The question most often asked by companies is how they can increase their company’s visibility.  The currency of digital social media is visibility.  The value of visibility is a derivative of the relevance of content.

Content needs to be current.  You can identify current issues and trends that are of interest to businesses in your industry by reviewing what is being posted on digital social media and craft your company’s social media to respond to the culture. 

There are volumes readily available on the internet for why it is important and how to develop business via digital social media.  However, consideration should be given to work with companies that specialize in digital social media because of the connectivity for all of your online activity from security, e-commerce, and other Internet issues. 

An online marketing campaign requires the equivalent strategic process for crafting an offline outreach plan that communicates your company’s value proposition.  The key is to carefully define your company’s target firmographics and demographics who would be interested in your company’s products/services.  The same consideration should also be given for ROI for digital social media costs, measured regarding dollars, time and effort required. 

There is a multitude of social media sites.  eBizMBA Rank continually updates averages of each website's U.S. Traffic Rank from Quantcast and Global Traffic Rank from Alexa and SimilarWeb.  The most popular social media sites as determined by eBizMBA Rank on May 1, 2017, are listed below. 

Social Media Site	eBizMBA Rank	Est. Unique Monthly Visitors
Facebook	1	1,500,000,000
YouTube	2	1,499,000,000
Twitter	3	400,000,000
Instagram	4	275,000,000
LinkedIn	5	250,000,000

There is not an ideal social media site for every company.  Understanding your target firmographics and demographics will determine your optimal social media sites for your company’s products/services.  Measuring the value of having a lot of viewers and relevance are subjective and will vary from each company.  For example, if you are an art dealer, having viewership or correspondence with only a thousand wealthy art collectors is more valuable than having viewership from ten thousand people whose interest and disposable income are not known. 

Connecting your value proposition to your company’s target firmographics and demographics is essential for offline and online marketing.  A business development professional can provide the strategy and implementation for offline strategies and for balance content and relevance for visibility for online social media. 

*The author would like to give credit for references to Corden and CBS to A. O. Scott for his article, James Corden Is in the Driver's Seat, published by Esquire in Feb. 2017.

Arthur R Ruderman, Principal
InnovativeGrowthSolutions
A B2B Corporate & Business Development Company

Partner, ITB Partners
Artie.Ruderman@itbpartners.com

Breaking the Feast or Famine Cycle: Part 2 Tell your Story

Last week I listened to a social media marketing webinar.  Recognizing the difficulty of selling for many, the presenter said, "make it easy for people to buy from you."  A very subtle but interesting twist of thinking.  Military tacticians might call this a flanking maneuver.  In other words, don't approach your prospects where their defenses are the strongest.   Contact them through their trusted associates and friends who know your work.  Deploy the power of your network.

Your network may be your most valuable business development asset. To be effective, they must understand your strategy and capabilities.  They must know what you are trying to accomplish and how to help you.  You must keep them informed through periodic updates.

When I started my business, internet marketing was in its infancy.  I began using email blasts to keep my network up to date on my work.  My outreach reminded people that I was landing new contracts and that I was successfully completing my work.  I would even profile exceptional candidates.  It was an excellent way to generate interest and new business.   I was pleased to learn that my emails had been forwarded three or more times, expanding my audience.  Talk about the power of networking!  To better manage my email marking program, I eventually migrated over to Constant Contact and Mail Chimp.  These tools help me maintain top-of-mind awareness so that when the need arises my clients and prospects know to call me.

SEND ME THE FREE EXECUTIVE RESUME CHEAT SHEET!

You must work to build your network continually.  If your network isn’t growing, it is probably shrinking.  Become active, making new contacts.  Give them a reason to follow you.  I use ‘call to action’ buttons on my website, email signature line, and social media accounts, inviting people to join my email list.

Put your clients on your team and encourage them to support your business development efforts. If they are agreeable, identify them alongside your completed contracts.  This is the time-tested “Band Wagon Strategy.”   I have a friend who refuses to consider this technique.  He considers it to be unethical.  Unfortunately, his business suffers frequent famines, from this failure.   When you complete an assignment successfully, ask the client for a reference and referrals.  This is an effective way to leverage your relationship.

Most freelancers I know use LinkedIn, an excellent networking tool.  Make sure your LinkedIn profile is complete and fully describes your services.   This simple point is often neglected, which works against one’s goals.  Spend the extra money for a paid subscription.  The added benefits are worth the expense, especially the ease of direct contact with prospects, and the SEO feature.  When I perform a Google search of my name or brand name, my LinkedIn page is listed before my website.  This feature makes it easier for people to find me.  Generate more exposure and contacts by participating in LinkedIn groups that match your interests.  Another small but often overlooked technique is to place a link to your LinkedIn page in all of your correspondence, usually in the signature section.  Simple, right?

LinkedIn provides your clients the ability to give you a recommendation.  I like to place their quotes on my website as well.  Make it easy for them by writing your reference. They can edit to their liking so you can cut and paste into your LinkedIn page.

If you want to step it up a notch, start a blog and promote it to your network.  My blog is based on my experiences.  I like to reach out to contacts and prospects to get their thoughts on my projects, then quote them on my blog.  This is a great twist on the Cold Call.   In fact, it is a non-threatening sales call where the prospect is happy to talk with you.  Admittedly, this takes a little more time but is manageable if spread over a few days.  My blog posts become job search reference material for my candidates.
You have a vast array of tools to use, including Facebook, Twitter, and blogging to promote your business.  They are low-cost ways to communicate the benefits of your brand.  For a success, make time to put them into effect.  Help your network help you!

Thank you for visiting my blog.  I hope you enjoyed my point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.

Your feedback helps me continue to publish articles that you want to read. Your input is important to me so; please leave a comment.

Jim Weber, President
New Century Dynamics Executive Search
JimWeber@NewCenturyDynamics.com
Author of: Fighting Alligators: Job Search Strategy For The New Normal

Current Assignments
1. COO- Atlanta-based Casual Dining Restaurant Company - New
2. Director of Business Dev, Atlanta-based B2B Professional Services Company: Complete
3. Payroll-Benefits Manager, Atlanta-based Retail Company:  Complete
4. Senior Accounting Manager – Atlanta-based Manufacturer. Complete
5. Controller - Atlanta-based Restaurant Company: New
6. Outplacement Assignment - Atlanta-based Manufacturer:  New