Value Recon: Supercharge your Value Creation Strategies

Whether you’re years away from an exit or are actively planning for your retirement, you need a way to measure the success of your business strategies before you plan on going to market.

The fact of the matter is that the current value of just about any company isn’t enough for most owners to retire on–it’s just not. The company might be a cash-producing asset that has afforded you 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 Scout’s value-first approach makes it easy for business owners and Founders to deliberately create future value for their businesses, 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 business owners looking to quickly identify ways to build value while maintaining their trajectory to retire on their terms, both in terms of timing and sale price.

For every initiative that you or your advisor 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 expanding your service hours. You expect this to generate $50,00 in revenue.
  • Gross Margin Improvement. Suppose you hire 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 you have 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 so you can maximize your efforts to build an enterprise that has enough value for you to meet your lifestyle goals when it comes time to sell.

Value Recon™: The Future of Value Creation

The downstream effects of Value Recon give owners and their 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.

Next Steps

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

Author Summary:
Dan Doran

Dan Doran

Is the Founder of Value Scout, Quantive and the 2019 Exit Planner of the Year. He is a recognized expert and speaks frequently about M&A, valuations, and developing more deliberate value creation strategies.

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