Two obvious and essential drivers of business value are business profits and growth potential, but eliminating risk and increasing the quality of your business can also make a dramatic difference in the value. Owners should review all facets of their businesses for improvement. There are three common and critical areas that deserve scrutiny regardless of industry. Here is a partial list of best practices in each of these areas:
Human Capital:
▪Recruit and hire a talented management team (COO and CFO at minimum)
▪Cross-train to secure backup for key employees and their duties
▪Implement incentive plans so key employees will stay before
▪Benchmark your compensation and benefits to be sure they are competitive
▪Take HR compliance seriously
▪Upgrade your advisors as you grow
Financials:
▪Consider a Quality of Earnings engagement to ensure the quality of financials
▪Limit owner personal expenses and document them
▪Resist the temptation to depress earnings and minimize income taxes
▪Set up proper internal controls
▪Be sure you understand your financials and tax returns
Information Technology:
▪Use state-of-the-art software to handle operations and reporting
▪Set up proper access controls for ALL employees
▪Establish multi-level backup and protection from malware and invaders
▪Ensure compliance with privacy and other regulations/requirements
▪Develop a disaster recovery plan
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