The difference between the current value of your business and the value you need to meet your post-exit goals is your Value Gap. This number can provide the impetus for a plan to fix business drivers and improve the performance of your business, increasing its overall value.
How to fix your Value Gap:
- Look for ways to reduce taxes on transfer/sale (corporate re-organization)
- Work with an Exit Advisor to determine how to increase value (fix broken value drivers)
- Determine which exit option will best suit you and generate the highest price
- Consider different investment strategies for the net proceeds
- How to increase the value of your business:
Since your business is likely to comprise a large percentage of your total net worth, as it does for most business owners, invest prudently in your business to increase its value. There are about 25 value factors to be considered. Have your Exit Planner do an analysis of your business to determine what can be done. He or she can also help you determine the value factors to be addressed and in what order based on the associated costs, anticipated benefits, and how long before you wish to be out of the business.
Want to take a simple test to determine if you have a value gap?
Even if you have no desire to leave your business anytime soon we suggest you find out how salable your business is today and if there is a value gap. The simple 18 question report will help you identify any gaps and the value. This is like a blood pressure check at the pharmacy; all you need is a valid email address to receive your report. To get started, click here.
Learn more about maximizing the value of your company.