Equity Value Enhancement

Chapter 8The Role of RiskOperational-Related Risks

Performing due diligence as protection from threats must occur both internally and externally. Those who can't anticipate what the marketplace may be like three or five years out with some degree of certainty may suffer the consequences of having threats at the doorstep of their business. Being reactive rather than proactive may be the difference between exploiting the market while others are failing and ducking for cover. The threat associated with human capital and succession of key staff hangs over every business, since no one knows his or her exact expiration date. Without proper threat mitigation processes in place, the untimely demise, disability, departure, or dispute with key officers or staff can have dire consequences.

As was discussed in the introduction of Chapter 7 concerning legal and financial risks, the author wishes to illustrate a common issue before addressing the below operational risks: one of optics through the lens of owners and investors when holding direct ownership in assets, enterprises, and equity. Through my own lens is the impact of trusted advisors, who collaborate have when assisting a common business owner. It is an extraordinary thing. Time and time again, I have found this to be a key factor in a company that levels off at about $25 million in sales and one that may have 10 times or greater revenues.

This is among the reasons I needed to write this book. Initially, it was intended to ...