From: http://www.bizjournals.com/

“Where did the year go?”

“What happened to my New Year’s resolutions?”

These are commonly-asked questions this time of year.

At this point, there’s not much we can do about 2015, but the start of a new year is always a good time to consider what we want to accomplish in both our business and personal lives.

I’ll leave the focus on your personal “to-do” list for 2016 up to you, but as a valuation professional, I would like to offer five considerations for your business in the New Year:

1. Prepare for transition

Business owners are often so busy running their business that they don’t take the time to plan for their eventual transition from the business. If you haven’t done so already, make 2016 the year you develop your exit strategy. It’s important for business owners to have a plan in place to define that strategy and your ownership succession plans — regardless of when that transition may occur.

2. Know what your business is worth

Business owners — no doubt influenced by the blood, sweat, and tears required to run a successful business — often overvalue their business and are surprised if the market doesn’t place a similar value on the company. A business valuation, conducted by an experienced business valuation professional, can provide an unbiased assessment of value. The valuation will take into consideration financial, marketplace, brand, employees and management, and key customer factors.

3. Look beyond the numbers

A valuation will provide more than just a number telling you what the business is worth. The components that go into a valuation can also help you make better decisions. The valuation can provide an “outsider’s perspective” on the key drivers of the business, potential risks to the business, and areas of opportunity. As a business owner, this information can be invaluable in your planning and ongoing management.

4. Prioritize changes to be made

If the valuation assessment is less than expected, or less than what is needed to transition, prioritize the steps you’ll take to affect a change in valuation. Do you have just a few customers contributing to a significant portion of your revenue? Start developing a plan to broaden your customer base. Are your financial ratios and results not comparable to those of industry peers? Start making changes that will put you more in line with them. Does cash flow vary significantly throughout the year? Consider what can be done to make cash flow steadier and more predictable. Depending upon your valuation results, there may be numerous areas to tackle. Make a plan to address each area, knowing that some make take several years of work to achieve the results you want.

5. Plan, review, and refine

An exit strategy can be a fluid document. Over time, your needs and the needs of the business may change, making all or part of your original plan obsolete. It’s important that business owners review their transition plan on a regular basis and adapt the plan to current-day business and personal circumstances.

I am hopeful that those of you who identified with the question, “Where did the year go?” at the end of 2015 have a different attitude at the end of 2016. I also hope that taking all or some of these five steps to strengthen your business will be part of that different attitude.