The value of a business can often be determined by profitability, cash flow, management team and other metrics. But there are often many small indicators that can also identify value—or potential problems. One of these, as simple as it sounds, is vacation time taken by the business owner.
When an owner takes time away from their company, their absence creates vulnerability within the business that can magnify strengths and weaknesses. These include issues within the company, and leadership roles among management and employees. Ultimately, this foreshadows whether or not the business is transferable.
Mike Ella, CPA, CA, recently covered this topic in an article published on the Business Journal network, How taking a vacation improves the value of your business.
The article examines what happens when a business owner takes vacation. Do problems arise as a result of his/her absence? Who steps up to resolve them? Are they resolved adequately? And what does all this say about a business’ real value if and when an owner decides to sell?
Interested in increasing the value of your business? Learn more about our business exit planning services by contacting Mike Ella at 440-449-6800.