There is no better time than the present to start working on building up the value of your business. Whether you want to prepare for succession or sell your business – or simply know that you can – there are several elements that can drive the value of a company in the greenhouse industry.
During Greenhouse Grower’s GROW Executive Summit, a panel of business advisors will offer suggestions on how to increase the value of your business dramatically. The panel includes Chris Cimaglio and Todd Downing (managing partners and co-founders of BEST Human Capital and Advisor Group) and Larry Turow, Managing Director of Pivotpoint Business Solutions.
Every business owner will exit at some point,” Turow says. “Focusing on business value and planning intentionally can mean millions of dollars of after-tax wealth.”
Downing notes there is a current tsunami of ownership retirements occurring due to the baby boomer generation exiting, to the tune of 48% in the next five years, 76% in the next 10 years, and more than $10 trillion of wealth and businesses.
“Around 80% of the businesses that are put on the market today simply don’t sell,” Downing says. “Potential buyers don’t see the value, the land may be worth more than the business, or the business may have outlived the owner.”
Even if you think you have family members that will take over the business in the future, Downing says this is not necessarily a good bet.
“Only 30% of family-owned businesses survive into the second generation, and only 12% in the third,” Downing says.
This is why value acceleration is the critical component to the success of an exit or ownership succession. Owners focusing strategically ahead of a transition will increase value of the business, and maybe more importantly, will hopefully walk away extremely happy in their retirement.
“We will focus on the 4 Cs of value acceleration: Human Capital, Customer Capital, Structural Capital, and Social Capital,” Cimaglio says. “We will also review the ValueBuilder System , a proven tool used by more than 55,000 businesses to increase their EBITDA, value, and multiple. There are eight drivers of company value and salability that measure the salability of your company, and this is what buyers look for when deciding to purchase your company. We will cover them in detail as they relate to the horticulture industry. If you are looking to hand off a thriving business to the next generation or increase your value to get a high return for your years of blood, sweat, and tears, then these are the areas you need to focus on.”
To learn more about this and other sessions at the GROW Executive Summit, click here.