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Create & Maintain Transferable Value
Growing business value is one of the most important things a business owner can do for their business. When a business owner goes to sell their business, the first thing a potential buyer is going to examine is the value of the business. Your responsibility as an advisor is to help increase the transferable value of the business. Transferable value is the value of the business even after the owner leaves the business. Profit does not equal transferable value, especially if most of the business value resides with the departing owner. Business owners must understand how to create and maintain transferable value for the business before they depart.
In this episode of Why We Plan, John Brown, Founder of BEI, and Elizabeth Mower, President of BEI, discuss their personal experiences with clients impending need to increase business value. John describes a situation where a business owner was trying to sell their business for about five million dollars. He has about 25 contractors and no management team. With this information, John knew that this company would be worth nothing without the owner. Find out how he knew and learn how to help your clients avoid situations like this.