Why Focus on Maximizing Enterprise Value?

As a business owner, your company may just be your most valuable asset. So why aren’t you doing more to maximize your enterprise value? 

Consider this hypothetical business owner whose net worth is approximately $12.21 million. Without factoring in the value of his/her business, the owner is worth nearly $3.71 million when you take into account the owner’s personal real estate holdings, retirement plans, residences, and other non-business-related assets. 

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If you’ve quickly done the math, you’ve discovered that the net worth of the business makes up 70 percent of the owner’s net worth, assuming they can monetize it. 70 percent! 

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When your business makes up the majority of your net worth, its value will greatly impact your personal and financial goals. You want to work on an exit or succession plan with a trusted adviser who will look at the operational areas of the business that present opportunities to improve overall quality and increase value. That way, when an opportunity for succession or a sale arises, you’ll benefit from the work put in to maximize enterprise value.