Build a Solid Foundation for the New Year

A look back at this year brings to light three significant areas in which – as a result of their participation in the Exit Planning Peer Advisory Board (PAB) – our members saw positive differences in their companies and in their growth as business owners. Consider these elements as you build a solid foundation for success in 2024.

Ownership Thinking

The philosophy of Ownership Thinking asserts that businesses can build wealth by instilling a mindset of ownership among employees, unleashing their potential by providing the training and tools to develop “ownership thinkers.” These are employees who think and act from the perspective of an owner and become active participants in their company’s financial success. This mindset is based on a conviction that most employees truly want to engage and contribute, that they build self-esteem when they are enabled to achieve and are more fulfilled by their work in an environment that cultivates these opportunities.

  • The members of the PAB embraced this concept and took steps throughout the year to introduce and develop this mindset within their companies.
  • Some introduced it generally, others picked one or two key employees with whom to work first.
  • The sharing of ideas, challenges, solutions, and successes compounded the effectiveness of each PAB member’s efforts.
  • Cultivating this mindset and practice clearly benefits the business now but makes it a better candidate for sale when the owner exits, by making it more solid financially, but also positioning it to continue to perform well when the current owner steps away.

Value Drivers

One of the first steps in exit planning, after choosing a target date, is to determine what a company must be worth when the owner exits in order to meet their financial objectives and assess its current worth. The exit strategy is built around closing this gap and reaching the ultimate value goal, which means optimizing the company’s value drivers. These are business systems that generate either recurring revenue or financial efficiencies from an established, growing customer base and those internally controlled activities, capabilities, or qualities that add worth to the company. Enhancing the performance of the business in these key areas will increase profitability, reduce risk, and ensure the sustainability and growth of the business, which will help get top dollar when it sells.

  • PAB members invested significant time and effort this year into identifying the value drivers that most affect their companies, determining which ones to address first, and developing plans to optimize them.
  • Managing those factors that affect the value of a business is an ongoing process, so having a foundational understanding of how value drivers impact your company is critical.
  • Our members found great value in the observations and insights of their peers as they all turned attention to value drivers.
  • Their work this year has equipped them to move forward, confident in their abilities to manage those factors that drive the value of their businesses.

Value-Based Management

The basic concept behind Value-Based Management (VBM) is that the value of a company is determined by its discounted future cash flows – investing capital so that returns exceed the cost of that capital. VBM extends this thinking to use the company’s key value drivers to inform both major strategic and everyday operating decisions. This approach starts with the company embracing value maximization as their ultimate financial objective.


  • Strategies, performance targets, and processes must be consistent throughout the organization and linked across the company at all functional levels in order to achieve value creation goals.
  • VBM involves restructuring to achieve maximum value on a continuing basis.
  • Companies also need nonfinancial goals around product innovation and both customer and employee satisfaction.
  • These objectives don’t contradict value optimization, but rather serve to establish values and guides for the organization and its culture.
  • We find this to be a highly effective way to build your business now while concurrently building the business value you need to eventually exit on your terms.

Is the PAB Right for You?  

The Exit Planning Peer Advisory Board (PAB) provides a safe place for business owners to discuss their challenges and offer support and insights to their fellow members, not only as they relate to exit planning but in making their businesses better today.

Events of the last few years, and the accompanying volatility of the business climate, have put businesses and their leaders to the test. PAB members have found that their peers have dug deep to find and offer creative business solutions as well as personal and moral support. The Peer Advisory Board membership continues to grow – a testament to the value that is found in the support and insight of peers and a lifeline to get through challenging times.

Like all business owners, you’ve likely dealt with changes that have required digging deep into the details of your business and how you operate it. You may have also discovered that it’s a good time to re-evaluate your long-term goals and exit strategy. The earlier you start to plan, the greater your chances of success at exiting on your terms, and the greater the opportunity to prepare for unexpected changes that can most certainly happen. We invite you to be a guest at our next Peer Advisory Board meeting and see for yourself the value in ready access to the wisdom and support of your peers. Contact me for details or for a complimentary consultation to discuss starting or revising your exit plan.

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