Doing so can help build and protect company valuation.
July and August are busy times for members of company boards. Q2 and H1 are over and it’s time to look in the rearview mirror and more so look out the front windshield.
As a business owner or CEO, now is the time to challenge your advisors/board to challenge you with great questions. Especially given Corona-geddon you don’t want the usual questions, you want challenging new ones that help facilitate healthy new dialog…dialog that can help you protect and build company value, or company worth as we like to call it.
Here are some questions you and your advisors/board should be discussing now:
- Have we managed our cash position well and if not, what lessons learned and what changes should we make for H2 given the pandemic is still ongoing?
- Have we done sufficient cost cutting if our business has been negatively impacted…and just as important, are we addressing our fixed costs and our variable costs? Some businesses are only doing the easy cost cutting associated with variable costs, not doing the tough cost cutting measures that hit fixed costs.
- Has our market size and market potential changed permanently? Some markets have shrunk and others have grown either temporarily or permanently as customers’ needs and desires have changed. Make sure you know which is occurring.
- How has COVID impacted your company culture? Is it helping you to live up to your company Values or is it challenging them in new ways? Are you effectively planning for post COVID in terms of whether any of your workforce will continue to work remotely and be productive doing so?
- Is your company value proposition still relevant or does it need to be rethought? Are your customers needing a minor or major change in value provided from you and is your dialog with them effective enough to help you determine this?
- Have you planned for how your market and business will come out of COVID – will it roar back or will it come back slowly? Planning this well will help you ensure having the right degree of resources (materials, supplies and people) and not too much or too little which may impact your ability to stay financially healthy and meet customer demands
- Are you having a healthy dialog around whether your company is taking necessary steps to avoid being disrupted…and are you looking for opportunities to be the DISRUPTER!
- And for those thinking that selling their business in the next few years might make sense, are your advisors/board discussing with you how the M&A market is changing potentially in your industry? And are you monitoring how potential future acquirers might be viewing company's like yours differently now in terms of value drivers so you want to use time as a friend and be on top of this sooner versus later?
Use this natural time of year to step back and look at your business from 100,000 feet and challenge your advisors/board members to ask great new questions. You don’t want to be having stale dialog as it will hurt your company valuation…new questions will generate new thinking and potentially create great company valuation, great new company worth!
