A ‘Business Value Gap’ is the difference between the value of your business today and what you need it to be at time of sale.
A shortfall can have a significant impact on your retirement plans and may force you to reassess your desired standard of living in retirement.
Worse case – it may mean you can’t afford to sell!
Retirement should be the best years of your life – the time for you to reap the rewards of your labour. As you approach retirement you need to determine your business value gap.
Business value gap analysis
Do you know:
- What your business value needs to be at time of sale?
- How many years it is until you can afford to sell?
- A future profit target that provides you a higher business value and a desired standard of living?
Business value gap analysis is a simple process of determining your retirement income and assets, business value (current and future) and strategies to improve business profit and wealth.
Grow before you go
If your business value gap analysis reveals a shortfall in business value then you will need to implement strategies to improve your profit before you sell. For example, improving your average sale per customer will increase sales, gross margin and net profit. Knowing what your business value needs to be means you can calculate your future profit, gross margin and sales targets.
Value gap analysis provides business owners and managers with piece of mind from understanding the direct connection between business value and a future standard of living at retirement.
Disclaimer: this information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. OBT Financial Group accepts no responsibility for any loss suffered as a result of any party using or relying on this article.