Why the most valuable asset in your plant isn’t on the balance sheet

As the owner you can be the most valuable asset in the business.

Manufacturing companies focus  on equipment, inventory, capacity, and productivity. All are very important to success, however what is often overlooked is that a key asset is the systemisation and  transferability of the owner’s knowledge, relationships, decision-making, and leadership.

Most manufacturing businesses have two production systems:

The visible system

• Equipment

• ERP systems

• Production schedules

• Inventory
  

The invisible system

• Supplier relationships

• Customer trust

• IP

• Staff loyalty

• Problem-solving experience
  

The invisible asset often lives predominantly inside the owners head.

Don’t become the operating system of your business.

Many owners go to their trusted accountant and focus mainly on getting their books in order prior to an exit. Of course that is important, however generally a lot less focus goes into preparing for transfer of relationships, authority, decision-making, customer ownership and leadership.

A transfer-ready business attracts interested people regardless of what your proposed method of exit is. The more indispensable the owner becomes, the harder succession becomes. The best manufacturing exits aren’t always achieved by an immediate exit either.

Some owners exit gradually ,bring in future leadership and transfer over time to a structured plan. The result is often higher value and greater legacy preservation.

Whatever option you decide on, there is a difference between owning your business and being your business if you want to create long term value.