Preface: A well-trained talent pool is consistently aligned with premium business valuations and appraisals. This blog provides 6 reasons why you should invest continuously to train your talent in order to build business value.
Investing to Double Your Businesses Value – Part II
Donald J. Sauder, CPA
Reducing investment risk to a potential buyer increases the probabilities of the business likelihood and probability of success, and therefore increases value. Management and the talent pool of the business is one such risk factor. Successful companies have well-trained, expert and talented management and staff that are adept at performing critical functions. This can be from customer service to strategic decision making, e.g. inventory and stocking decisions, or say purchasing. Assessing your intangible assets – your talent pool is imperative. Unless your business is asset based, i.e. rental properties, talent is key drive to long-term success. Given entrepreneurial interests, we’d say the chances of a coach services or carpet sales are more likely. In those two instances, safe drivers and friendly staff are as important as price. In fact, most customers would rather pay a premium to work with a business they like. I’ve heard one business advertise that their team is “good natured guys” or simply easy to get along with technicians. You’d call them because you want a good attitude solving your problem.
The premise is training. While good attitudes aren’t always easy to consistently maintain when stress levels climb, proper training and management prevent problems from ballooning. That prevention begins with a well-trained management team that can quickly identify and adeptly resolve problems.
Does your business have the expertise and talent to run without you? If you can’t step outside your business for a week, without a business as usual attitude prevailing, you’ve got work to do on value drive number two – an expertly trained talent pool. Your business will be more successful with talent that is well trained. While sometimes challenging to hire, it often requires costs and time to train and development that expertise. Studies show that training is worth the investment. Why?
1. It promotes your business successes from better customer service to more closed sales;
2. It promotes job satisfaction and nurtures employees to be more engaged in working for you, therefore, leading to more financial rewards;
3. It is a recruiting tool for the promising talent looking to excel in their careers;
4. It is a retention tool, that instills loyalty and commitment from good talent, and provides them with opportunity and challenge, and a fast paced current;
5. It adds flexibility for cross-training to help with schedule setting and absences;
6. It provides knowledge transfer that is vital to successful craftsmanship.
The benefit of not investing in a trained talent pool – short term cost savings. Forty percent of employees who leave their jobs in the first year, make the decision because of a lack of training and upward mobility. As an entrepreneur, you appreciate more than your employees, what employee turnover costs – the training is therefore the less expensive alternative.
It likely is not easily perceived, but nearly all business with a premium value — and that value expands with the employee count – has an expertly trained workforce, from top management to clerical administrative tasks. The value of investing in a well-developed talent pool is too often overlooked in the entrepreneurial community, yet it’s proven to hold substantial and incalculable value. Your business must have the expertise to succeed without you daily involvement to be truly valuable. That often requires at a minimum, appropriate training for management to be expert decision makers and supervisors.
Step two in doubling your businesses value – investing in continuous training for a well-developed talent pool.