A company must create value, be it an ongoing business or one ready to sell. An ongoing business focuses on enhancing value for its customers, employees, suppliers, and investors; a company being prepared to be sold must increase its value for prospective buyers.
The current market value (CMV) is rarely sufficient to allow you, the business owner, to exit on your terms (time and selling price). So, to fill the value gap and get exit-ready, your company should increase its value.
Value creation is the most significant aspect of exit planning. And one of the most critical aspects of your value creation journey is planning. You create value for the goals of selling and editing the company. That requires you to attach value to those goals and planning periods, for example: “By the end of this year, my company will create $1million in value.”
3 Tips for Tying Value to Your Annual Plans
- Know what is feasible and attainable
- Know the value of your objectives
- Stay on track.
Know What Is Feasible and Attainable
It is crucial to set feasible and attainable goals that your company can meet, given its current resources and the skills, abilities, motivation, and mindset of its workforce. You can increase your chances for success by ensuring that your goals are realistic, feasible, and attainable. Doing so keeps you and your workforce motivated while maximizing your resources and time.
To make feasible and attainable goals focus on:
Defining your goals clearly. Analyze your expectations, write them down, and try to bring more clarity to them. Make your goals time-bound and measurable. Have an accurate understanding of the current situation and use it as a base upon which to build your goals. A clear starting point helps you measure the progress of tasks and initiatives.
Understanding your resources. Ascertain whether you have sufficient resources to complete your goals. List what you have access to and how much they can help accomplish your goals. These include time, motivation, information, training, funding, and support.
Check if the timeline is under your control. Do you have the time to meet your goals? List down all the tasks competing for your time and analyze how you will complete them.
Understand your motivation level and that of your workforce. Find out if other commitments will conflict with work toward your goals.
Ensure that you have the knowledge and information required to accomplish your goals. If not, do thorough research to eliminate the information and knowledge gap.
Examine your skillsets and those of your workforce. Conduct training to help your people acquire the skills needed to meet your goals.
Find out if you have sufficient monetary assets to complete your goals and if other things are depleting the funds you need to meet those goals.
Analyze if you need outside assistance or guidance to complete your goals. If so, identify the nature of such help, ask for it, and arrange to get it.
Reassess your goals. After you have defined your goals and understood both the availability and non-availability of your resources, reassess those goals and make the necessary adjustments. For example: If your goal is to make $5 million in a year, but it is not feasible, lower that amount to make it attainable with your available resources.
Decide mileposts. Mileposts or benchmarks help you stay on track in your journey to achieve your goals. They break down your goals into small, bite-sized tasks that provide sequential steps you can follow to accomplish your goals. Mileposts also serve as pointers to reassess your strategy, recheck your timeline, and adjust your steps to complete your goals.
Know the Value of Your Objectives
At Value Scout, we call annual plan tasks “objectives.” Our Value Recon allows you to assign estimated values to your objectives (annual plans) and value creation initiatives. This enables you to stop guessing how much value your value creation initiatives will provide your company at the end of a year.
Our Value Recon feature helps you prioritize your tasks and identify what you should do first when you have a lot of initiatives to complete. It also helps manage your time to make sure you have time to complete all planned tasks.
Establishing priorities is crucial to completing planned value creation initiatives. Prioritization helps you focus on significant and urgent tasks first and low-priority tasks later. It ranks tasks in comparison with others and the order of their importance.
Without prioritization, you may struggle to complete tasks on time, stress about finishing everything on your to-do list and be less productive.
Stay on Track
Keep your team (and yourself) on track with your value creation plan. Value Scout’s planning tools can help you create achievable tasks. Keep goals top of mind and see who is on track with Value Scout’s dashboard features.
The dashboard features give you have a bird’s eye view of the success of your value creation initiatives. They also reveal the roadblocks in your value creation journey and the paths to overcome them.
Tracking your goals is essential, as that helps monitor what is or is not happening as per your plan. Goal tracking helps increase the probability that you will meet your objectives by helping you to clarify your ideas and to focus your efforts in the right direction. By tracking your goals, you ensure the efficient utilization of time and resources.
Tracking your goals improves productivity and proficiency, provides clarity of purpose, reduces mistakes, increases satisfaction, promotes team unity and camaraderie, improves meeting targets, and opens up opportunities for future projects.
Plan Your Way to Success
Not all plans lead to success, so tying value to them is essential to get professional help. Expert value creation advisors can help you attach accurate values to every objective (task). They can help you prioritize your tasks and track your goals. Professional advisors ensure you exit at your desired time and get the selling price you want.
Value Scout can help you connect with the top advisors. Our AI-driven platform offers cutting-edge features to simplify your value creation and exit planning process. Get in touch to know more.