FocusCFO has contributed to the Exit Planning Institute’s latest white paper, ‘Understanding Your Business Value.’ This white paper breaks down the five stages of value maturity that business owners must undertake to successfully grow and harvest the value in their company to manage it for a lifetime.
The five stages of value maturity, according to the Exit Planning Institute, are Identify, Protect, Build, Harvest, and Manage.
FocusCFO works closely with businesses in the build stage of value maturity, which takes a long-term, strategic approach. Key elements in the build stage are to increase your cash flow (EBITDA) and to improve your multiple. “Your multiple is the number assigned by the private capital market to the value of your tangible and intangible assets and their associated risks. Intangible assets include Human, Structural, Customer, and Social capital. Improving your intangible capital is critical to building business value,” explains Chris Snider in his book ‘Walking to Destiny.’
This is where a talented CFO comes into play. “We find the best way to help the owner and management teams to recognize the risks in their business is using valuation analysis,” says Michael Stier, a Certified Exit Planning Advisor and FocusCFO Area President for the Carolinas.
To learn more about each of the five stages of value maturity, head to the EPI’s website to download the latest EPI whitepaper.
Included in the white paper is the EPI’s Value Maturity Index exercise, which we recommend completing every 90 days to highlight and track the growth of your business value.
