A business assessment is a valuable tool to guide business owners to increase the value of their company. To read a more thorough description, see our previous article What Is a Business Assessment? Part 1 of 3. To read about the processes, see What Is a Business Assessment? Part 2 of 3.
At its essence, a business assessment is a value creation plan. It is a to-the-point set of action plans that guides the company for the next 18-24 months. Often, entrepreneurs don’t think about creating value until they are ready to exit the business. However, value creation should be one of those critical measurements that executives should think about executing against weekly.
What is the Deliverable of a Business Assessment? The deliverables of a business assessment should be usable. Wyatt Matas has three primary deliverables and a couple of options (depending on the type of engagement) in our Value Creation Assessments, which we have outlined below:
- Benchmarks: We give a value score for each of the 9 categories of the business. These scores allow the business owner to determine where they need to spend their time, lowest score likely needing the most attention, and know if they have improved in later evaluations. The categories covered include: Financial health, Industry status and outlook, distribution of suppliers, employees and customers, customer and referral relationships, owner dependencies, operational efficiencies and capacities, management reporting, strategic differentiators and alignments, exit options and preparedness.
- Action Plans: This makes up the bulk of our reports. For each of the 9 categories we detail a set of action plans. These action plans are heavy on the short term, but they extend into 12, 18 and 24 month plans. The action plans are also specific, detailing the steps required and expected outcome.
- Industry Analysis: Over the years we have found it helpful to include industry analysis even though most owners say they have a handle on the direction of their industries. We often uncover some data point the executives were unaware of about their industry that could impact how they operate. Executives also find the data helpful for their own reference and in presentations to investors or employees.
- Valuation (Optional): As mention above, some executives will choose to have a valuation completed. In this case, a complete valuation will be provided in a supplement document.
- Exit Strategy (Optional): If the company is planning to exit in the next 2-5 years and they go through the Exit Strategy Review, Wyatt Matas provides them with an extra set of action plans specifically to designed for their stated exit timeline and valuation goals.
The ultimate goal of a business assessment is to provide the business owner with set of action plans designed to create value. When the process is complete and the assessment is in the hands of the executive, many say they have a sense of peace and confidence about where they are headed. They are rejuvenated about their businesses and are eager to execute. They no longer agonize over daily decisions — they just open the plan and get to work.
This is the third in a three-part series detailing a business assessment. Check the links at the top of the article for the first two articles. Or if you’d like to have the entire white paper emailed to you, just drop a note to firstname.lastname@example.org.