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Value Perceived May Not Be Value Received Or Vice Versa

money in a spilled trashcan

It was once said, “one person’s trash is another person’s treasure.”  This saying holds true to the value of one’s business.  I am not saying your business is trash, but often we have a misperception of what our business may be worth.  You may think your business is worth a lot but have no buyers.  You may also feel your business is worth less than it could be and end up selling the business for less than you should receive at a transition event.  Too many times, business owners do not understand what drives the value of their business and have not taken the time to groom those value drivers to get the most out of their business only to find out the business is worth a value other than what they perceive.

The value of a business should not be determined by a transition event but rather over a business’ life span.  This value comes in many forms including excess compensation, the flexibility of working on your terms instead of on the business’ terms, the privilege of owning your own business and ultimately the value received once you sell the business.

We know the primary element of the value of a business is created by the ability of a business to generate cash flow above its operating and capital expenditures.  The excess cash flow of the business along with a well-conceived business plan is what helps enhance the value and ensure the sustainability of the business growth into the future.

If you are not sure what your business is worth or how to further groom it to get the value you want, contact us, and we will help you focus on the step to be taken for you to get the most out of your business now and in the future.

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