How do you increase value $$ in your biz?? Part 1

David Ortiz |


What does it mean to be a value creator? How do you start acting as a value creator? These are important questions to ask yourself as a business owner. The more valuable your company is, the more it sells for, but you will also have immediate benefits because your business will run better.

According to a survey by the Alliance of Mergers and Acquisitions Advisors, 95% of M&A advisors indicated an owner’s perception of value versus its real market value is the number one reason they can’t sell a business."

In the last video, we talked about the 3 gaps, and one of the gaps was the profit gap. Increasing your profits increases your value. But let’s talk about the other side of the equation today: your multiple. How is a multiple determined?"

There’s a bit of grey area in determining the multiple, which is why there is an art to it, but the majority comes from analyzing QUALitative data. This is found in the value of your intangible assets

The intangible assets in your company do not show up on your balance sheet. But this is where the majority of the value SHOULD come from. That’s why I created a mini-series on Human, Customer, Social, and Structural Capital

Based on your industry, you will be given a range of multiples, for this example, we’ll use a range of 3X-10X EBITDA. Some companies don’t even make it to the low end of the range because it’s so dependent on the owner, but our goal is to hit the high end.

The Exit Planning Institute preaches that where you end up on that range of multiples is determined by two things: your Business Attractiveness and your Personal, Financial, and Business Readiness to grow and transition

That’s why we focus on the 3 legs of the stool of exit planning: your personal goals after your exit, your personal financial plan, and your Business plan, so you can stop worrying about whether you can walk away, and start your next adventure.