Plain and Simple: Bright Business Insights Winter 2018 | Page 5

BEWARE OF HIGH-RISK AREAS IN YOUR BUSINESS Succession Planning Strategies For Savvy Business Owners This is the first article in a series dedicated to succession planning strategies and insight. Be sure to read future editions of Plain & Simple for additional installments of this series. There are so many factors to consider that, if not properly monitored and managed, can impact the value of your business. And, unless you want to leave the future value of your company up to chance, the worst thing you can do is wait until the 11 th hour to conduct a formal business valuation from a qualified valuation expert. Unfortunately, those who do choose to wait may not only be in for an unfortunate surprise, they will also have fewer chances to set things right. This article will provide you with the insight necessary to eliminate hurdles and take control of your company’s future. What Do You Want To Accomplish? Once you have a clear understanding of what you want to accomplish with your business and what barriers might be standing in the way of your success, you can develop a plan to overcome those obstacles and come out on top. Not sure where to look? Consider areas of your business that, if left alone, would result in the ultimate reduction of future cash flow. The following four high-risk areas are a great place to start. Customer concentration Supplier relationships Do a small group of customers generate the majority of your Again, if you have relied on the same supplier for a number revenue? If so, it’s time to diversify your customer base to avoid going under if one, two or more of your major accounts were to take their business elsewhere. Depth of management team Do you find yourself relying too much on a handful of key individuals? What would happen if one were to leave for greener pastures? Make sure others on your team are armed with the knowledge needed to cover for each other if something were to go wrong or if an employee decides to uproot. of years, you are setting yourself up to fail if, for one reason or another, they were no longer available to fill your orders. You should always maintain positive relationships with several suppliers to ensure you always have the items and services you need to serve your own customers. Barrier to entry How easy is it to do what you do? Can someone else jump into the marketplace and run you out of business without breaking a sweat? Have you taken steps to protect your intellectual property and raise the barriers to entry for competitors? You can minimize risk to your business by ensuring that you have the proper protections in place to protect your unique offering. These could include patents, copyrights or trademarks. by: Ben Froese, CPA Senior Manager 545 N. Market St. Wooster, OH 44691 [phone] [email protected] Addressing your business’s risks can help you plan for a more stable future. Want to learn more? Give me a call and together we can assess whether any obstacles are threatening your business.