Value Recon: The Ultimate Cheat Code for Advisors

Whether you’re an old hand at exit planning, or a newly-certified CEPA looking to expand their practice, a common struggle is finding a tool (or set of tools) that makes it possible to actually do the work of planning exits.

The fact of the matter is that the current value of just about any company isn’t enough for the owners to retire on–it’s just not. The company might be a cash-producing asset that has afforded the owner a great lifestyle. But, selling at a 4x? Or a 6x multiple? Everything we know about this work tells us that number usually will not meet their retirement needs.

Value Creation > Exit Planning

So what does that mean for you as an exit planner? Our biggest piece of advice is to forget about planning exits. Instead, lean on value creation. When you’re able to tie real figures to the initiatives you advise, you can confidently prioritize the actions needed to build enough value in the appropriate timeframe for the owners to retire—without the guesswork so often found in traditional models.

Connecting your advisory practice to value creation also makes it much easier to grow your client base. Hiring an advisor with a proven track record backed up by dollars and cents is much more appealing to business owners than taking a chance on an advisor with less concrete validation.

Value Scout’s value-first approach makes it easy for advisors to deliberately create future value for their clients, ultimately leading to successful exits when it comes time to sell. The most impactful example of this philosophy is the Value Recon™ tool.

What is Value Recon™?

Value Recon™ is the ultimate cheat code for exit planners looking to quickly identify ways to build value based on your clients’ timetable to retirement.

For every initiative that you or your client creates, our system will prompt you for specific data points that feed into our algorithm—resulting in an instant estimate of the added value of a planned initiative. Value Recon gives users four ways to estimate value creation for initiatives:

  • Revenue Growth. An example would be an initiative like your client expanding their service hours. You expect this to generate $50,00 in revenue.
  • Gross Margin Improvement. Suppose your client hires a new supplier, and they’re doing a great job. This change reduces direct costs, resulting in an estimated 2% increase in gross margins.
  • Cost Reduction (“Cost Out”). When reviewing the books, you realize that your client has multiple software subscriptions for the same purpose. You estimate that eliminating that redundancy would result in a $10,000 reduction to yearly operating expenses.
  • Acquisition. Value Recon estimates the value of any acquisition by taking any financing, debt, and risk factors into account alongside the added benefits the acquisition will bring.

For each scenario listed above, Value Recon takes what you do know and crunches the numbers to extrapolate the added value to the CMV of your enterprise based on your company’s unique situation. You no longer have to worry about managing a million different formulas and Excel macros. Value Recon does the hard work for you.

With an estimated added value assigned to each initiative, it’s easier than ever to prioritize tasks for your clients so you can focus on doing what you do best: steering them to a successful exit.

Value Recon™: The Future of Value Creation

The downstream effects of Value Recon give advisors the ability to hit the ground running when it comes time to build out annual and quarterly plans. You can filter and sort all of your initiatives based on estimated value, in addition to various other data points like priority, level of effort, due date, etc. The ability to sort all the work-undone based on the value impact of each initiative is a game-changer for exit planning advisors and their clients.

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In addition to all the time you’ll save with Value Scout’s Value Recon tool, you can also use it to grow your Value Creation and Exit Planning billings. The validation for your successful work is right there, in concrete numbers anyone can understand. Being able to say to a future client, “I was able to generate $XXX in added value this year for my clients” is a sure-fire way to convince them to sign on the dotted line.

Next Steps

Value Scout’s AI-Assisted Value Recon will help you jumpstart your value creation initiatives. Plan, organize, sort, and most importantly, create value for your practice and your clients. Join the future of exit planning by signing up for a one-on-one demo today.

Author Summary

Emily Caldwell

Emily Caldwell

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