Under the heading of “Business Fundamentals” we put the housekeeping activities that reduce your exposure to risk of loss. We do that first because before we work to increase value, we want to make sure that mechanisms are in place to protect significant business value. We divide business fundamentals into four areas:
- Ownership rights and responsibilities
- Facilities management
- Employee errors
Ownership rights and responsibilities
Are your corporate records in order? Is each share of stock documented? If you are a co-owner, are the rights and responsibilities of each owner clearly documented, understood by all owners and implemented? Do you know what will happen if one owner becomes ill or dies? Has the company paid for any perks for family members?
Minimize risk of loss from facilities management
You need to know where your company is most vulnerable to loss in its activities. Vulnerable areas might be in: services, manufacturing, assembly, inventory, publishing / printing / duplication, records management and maintenance, or research and development. You may also need to take a look at your operating space especially if it has grown on an as-needed basis, rather than from a carefully conceived design.
Minimize risk of loss from competitors
Have you taken time lately to identify all of your direct and indirect competitors? Have you evaluated them in terms of their ability to threaten your organization? Can you avoid future threats from competitors?
Minimize risk of loss from employee errors
In the past 12 months, has an employee made an error that cost your company significant money? How did that error occur? What measures can be put in place to prevent similar errors in the future?
The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial advisor. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial advisor. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. Exit Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need.
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Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity.