Hot Topic for Your Next Client Meeting: Value Planning

This time of year many business owners spend an inordinate amount of time looking at their financial statements, especially related to tax planning for their business. Business owners are keen on using their financial statements to work on tax planning but fail to see how time spent on value planning can increase the value of their business.  

After all, the business is likely the owner’s largest asset, yet many will go years never knowing the value of their business or whether the value of this asset is increasing or not.  Imagine going 20 or 30 years and not checking if an IRA or other investment is increasing in value!  

In a recent podcast hosted by First Business Bank, I joined host Mark Meloy, CEO of First Business Bank and fellow guest Josh Hoesch, also from the bank, to talk about when business valuations are needed and what’s involved in having a privately owned business valued. (LISTEN HERE). 

During our conversation, Josh noted that in his job as a commercial lender he hears plenty about tax planning but never hears about value planning.  What an interesting concept - value planning!  I write this with a smile because Josh’s comment confirmed one of the “hot topics”  we share with clients regularly.  While we get to know our clients well and like to see our clients stay in touch, the reason we recommend regular business valuation updates is so that business owners are able to identify the drivers of value in their company and work to increase value over time.  A business valuation certainly results in a single conclusion of value as of a single point in time, but so much more is learned about the business in the process of the valuation.  And neither the business nor the industry or economy it exists in are stagnant–in fact, quite the opposite.  Regular valuation updates allow for value planning

Proactive value planning allows business owners to understand the levers of value in their business today, identify and prioritize the actions needed AND if the actions they are taking are having a positive or negative impact. 

Why would value planning be a useful business planning tool?  Because value, ultimately measures growth and capacity for that growth, efficiency, future opportunity, and future risks.  I believe it’s safe to say that if the value of a business is increasing, most if not all aspects of that business are improving. 

Whether a business owner is ready to sell in two years or 20 years, working to understand and manage or increase value is worth doing. By the time most of the business owners we meet come through our doors they have a specific triggering event that is causing them to NEED a valuation. 

Rather than reacting to a triggering event, we encourage you to help your clients think about value differently. Being proactive about understanding the current value of their business gives the owner and all stakeholders a chance to understand the drivers of value and then consciously go to work on increasing the value in their business. Just as business owners stay aware of their 401(k) and other investment balances and wouldn’t dream of ignoring those statements, it’s important for your client to think as an investor - to know the value of their business in order to understand, increase and unlock the value of their business through ongoing value planning.

To listen to the full podcast episode - What Is Business Valuation & When Do I Need It?

Jane is President of Capital Valuation Group, Inc., headquartered in Madison, WI. Capital Valuation Group has been helping business owners across the country understand, increase and unlock the value of their businesses for over 45 years through keynote speaking, valuation analysis, determining damages and providing expert witness testimony. Jane welcomes conference and event speaking inquiries and can be reached at