indicatorSuccession Planning

Succession planning and tips for value optimization as a KPI

Learn how to boost your business’ value during this critical phase in the life of their business.

By ATB Financial 15 March 2023 3 min read

There are many ways you can optimize your business' value as you think about transition planning and finding the right successor. How will you continue scaling the business and make it attractive as a potential acquisition? Read through our advice below to make this process your own.


Measure smart, acquire strategically, boost efficiency

Amanda Vella, senior director for Business Advisory and transition consultant at ATB, says adding value to any business starts with looking at the numbers.

“Understanding the value of your business can let you know which areas to improve upon,” says Vella. “It gives you a baseline measurement to make planning decisions. Knowing your value, just on its own though, won't necessarily tell you what you need to improve on.”

To reach that value-focused KPI, business owners can also move towards their processes more efficiently. That kind of deep work could result in long-term success simply based on what this strategy provides—a better way of running every branch of the business.

“Do you have extra steps in your processes you don’t need? Can it be leaner?” asks Vella. “Have you looked at certain processes through the customer-value lens?”

Understanding your company’s EBITDA, normalized for one-time items, can give you a deeper look into future expectations of earnings and multiples for businesses in your market, Vella says. It’s also helpful for owners to recognize the company assets, especially the intangible assets that support that business valuation.

Tuck-in acquisitions could be another way to bring value to your business, Vella notes, if that acquired business can easily be incorporated into your existing operations without disrupting your day-to-day business. Owners may want to buy a smaller company in their space, she says, and find administrative efficiencies. 

There are many methods to create more efficient protocols and actions within a company—which one will work for your business? It could be the Kaizen model, which builds efficiencies through small shifts in daily work and corporate culture to foster an environment that focuses on preventing errors from recurring, instead of punishing them. In contrast, the Six Sigma technique revolves around steps that include: define, measure, analyze, improve and control.

Whatever route you choose, the core principles of process efficiency can be a guide throughout your process.

The core principles of process efficiency are:

  • Minimize errors
  • Reduce waste
  • Improve productivity
  • Streamline operations


The elements of a strong valuation

Don’t underestimate the influence of goodwill qualities that should be identifiable and transition-ready, Vella says. She points to the “Four Cs” idea coined by Chris Snider, CEO of the Exit Planning Institute: social capital, structural capital, human capital and customer capital. 

“Intellectual capital is basically the easiest way to define it. It’s everything everybody knows in a company,” says Snider.” I like to call it the secret sauce of what makes a company go and what makes a company go well. And I've defined these as what I call the 4C’s: human, customer, structural and social capitals…Human capital is really a measure of the talent level in a company. I think most people would agree that if you have stronger talent, you're going to have a higher performing company.”

Vella adds that a forward-thinking company will make sure they have other features of a positive valuation, like unique processes, customer lists and trademarks.


Building a strong team

The responsibilities weighing on the shoulders of the business leader should be spread out across a strong management team assisting with the transition, Vella advises, because that will lead to greater chances of success. “You want everyone in place to help the owner, from a strategic and visionary CFO to the HR personnel, and maybe a mergers and acquisition advisor if the business is on the way to a sale,” she says. 

“Many business owners don’t want their management team to know they’re exit planning but it really comes down to framing it as implementing good business strategy just in case something happens. Management teams would actually feel more comfortable knowing steps are being taken to protect their future and the business’s future.”

Even as they build towards an exit, business leaders still have key roles to play within their businesses. And the earlier transition planning can merge into succession processes, the better. As a McKinsey report states, “A forward-looking, multiyear planning process that involves the incumbent CEO would increase the odds of success.”

Learn more about selling your business successfully with ATB’s Business Transition Guide. Want tailored advice for business transition planning? Reach out to our Business Transition team at

Business Transition Guide

Learn the steps you can take to successfully sell and transition out of your business.

You might be interested in

Need help?

Our Business Support team will be happy to assist.

Chat now
ATB Virtual Assistant
The ATB Virtual Assistant doesn't support landscape mode. Please tilt your device vertically to portrait mode.