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Rapid Risk Reduction Methodology Detailed: Creating The Path To Higher Valuation with CEO/Partner Sean Hutchinson SVA Value Accelerators and Alistair Stewart
When we say higher valuation, many business owners focus more on profits than actually looking into the threats to earning those profits. Sean Hutchinson and Alistair Stewart of SVA Value Accelerators talk about the importance of risk reduction. Together, they lay down the five categories of risks out there for business owners to consider: strategic, compliance, operational, financial, and reputational risk. They present situations and solutions that could help you picture out how to overcome them. They also talk about whether owners are aware of these risks while discussing a de-risked company versus a risky company and the value gap between them.
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Rapid Risk Reduction Methodology Detailed: Creating The Path To Higher Valuation with CEO/Partner Sean Hutchinson SVA Value Accelerators and Alistair Stewart
Creating The Path To Higher Valuation with CEO/Partner Sean Hutchinson
Risks are the consequences of an action, an event that is reasonably likely to undermine or threaten goals or objectives that have been determined. There are things you can do or stop doing to increase enterprise value that are counter-intuitive and will increase the value of your business.
We’re doing a deep dive continuation with Sean Hutchinson, CEO, and Partner with http://buildvaluetoday.com/ (SVA Value Accelerators) and Alistair Stewart. He’s the Manufacturing Practice Leader from SVA Value Accelerators. We’re going to dig deeper and we’re going to talk about rapid risk reduction. Alistair, let us know.
Risks are out there in a variety of categories and most business owners and people working in the business become a little desensitized to them. You can think of risks as being in a broad spectrum of categories. Strategic risk, compliance risk, operational risk, financial risk, and reputational risk. Those are five broad categories. We can also consider that risks exist within a business and risks exist outside of a business. If we look at how businesses are valued. If we look at the worth of a business, it’s pretty obvious to financial investors and pretty opaque to owners and employees that reducing risk represents a tremendous opportunity to increase the value of a business, particularly the transferable value of a business.
We can look at say strategic risk. Strategic risk is something that threatens the outcomes that a business has chosen to pursue. There’s a little bit of an eye-opener there. Are we choosing our outcomes? Do we understand the threats that compromise our ability to realize those outcomes? What might those risks, those threats be? We can go down the list of compliance if that matters to the industry that you’re in, operational, financial and reputational. A fairly straightforward discussion on those topics will reveal a tremendous amount of business value, of enterprise value, that’s threatened by inattention to these existential matters.
In these three categories of how to increase the value of the business, increasing earnings, reducing risk and increasing marketability, those broad categories, a lot of business owners and their teams are going to focus on increasing earnings as an instinctual way to increase the value of a business. That’s understandable. That’s where a lot of resources go. When we see that big category of things that you have to do to reduce risk or should do, could do or will do, less attention is typically paid to those things. They can have a dramatic effect immediately on the economic enterprise value, transferable enterprise value, and we can add value. What people need to realize, what owners might tune in on here, is that we can add value to our business pretty dramatically without adding $1 of revenue or $1 of profit. Those things in the beginning of the value acceleration process have less eff...
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By Bob Roark
5
1212 ratings
When we say higher valuation, many business owners focus more on profits than actually looking into the threats to earning those profits. Sean Hutchinson and Alistair Stewart of SVA Value Accelerators talk about the importance of risk reduction. Together, they lay down the five categories of risks out there for business owners to consider: strategic, compliance, operational, financial, and reputational risk. They present situations and solutions that could help you picture out how to overcome them. They also talk about whether owners are aware of these risks while discussing a de-risked company versus a risky company and the value gap between them.
—
Watch the episode:
Listen to the podcast:
Rapid Risk Reduction Methodology Detailed: Creating The Path To Higher Valuation with CEO/Partner Sean Hutchinson SVA Value Accelerators and Alistair Stewart
Creating The Path To Higher Valuation with CEO/Partner Sean Hutchinson
Risks are the consequences of an action, an event that is reasonably likely to undermine or threaten goals or objectives that have been determined. There are things you can do or stop doing to increase enterprise value that are counter-intuitive and will increase the value of your business.
We’re doing a deep dive continuation with Sean Hutchinson, CEO, and Partner with http://buildvaluetoday.com/ (SVA Value Accelerators) and Alistair Stewart. He’s the Manufacturing Practice Leader from SVA Value Accelerators. We’re going to dig deeper and we’re going to talk about rapid risk reduction. Alistair, let us know.
Risks are out there in a variety of categories and most business owners and people working in the business become a little desensitized to them. You can think of risks as being in a broad spectrum of categories. Strategic risk, compliance risk, operational risk, financial risk, and reputational risk. Those are five broad categories. We can also consider that risks exist within a business and risks exist outside of a business. If we look at how businesses are valued. If we look at the worth of a business, it’s pretty obvious to financial investors and pretty opaque to owners and employees that reducing risk represents a tremendous opportunity to increase the value of a business, particularly the transferable value of a business.
We can look at say strategic risk. Strategic risk is something that threatens the outcomes that a business has chosen to pursue. There’s a little bit of an eye-opener there. Are we choosing our outcomes? Do we understand the threats that compromise our ability to realize those outcomes? What might those risks, those threats be? We can go down the list of compliance if that matters to the industry that you’re in, operational, financial and reputational. A fairly straightforward discussion on those topics will reveal a tremendous amount of business value, of enterprise value, that’s threatened by inattention to these existential matters.
In these three categories of how to increase the value of the business, increasing earnings, reducing risk and increasing marketability, those broad categories, a lot of business owners and their teams are going to focus on increasing earnings as an instinctual way to increase the value of a business. That’s understandable. That’s where a lot of resources go. When we see that big category of things that you have to do to reduce risk or should do, could do or will do, less attention is typically paid to those things. They can have a dramatic effect immediately on the economic enterprise value, transferable enterprise value, and we can add value. What people need to realize, what owners might tune in on here, is that we can add value to our business pretty dramatically without adding $1 of revenue or $1 of profit. Those things in the beginning of the value acceleration process have less eff...