The wealth gap is what every business owner needs to face. In its simplicity, you look at what you need for financial security and compare it to what you have accumulated and invested. If you plan to sell your business, the after-tax proceeds may not provide enough for your retirement lifestyle. That’s the definition of a wealth gap. If you can’t support yourself when you’re no longer in the business, then the sale of the business is a bad idea. You have created a lifestyle as a result of your business. You will want that same level of lifestyle in your retirement. Won’t you?
What is your wealth gap?
A value acceleration expert will compare your business to “best in class.” This is a critical aspect of the Value Acceleration strategy. They will identify areas to shift and move your business to best in class. Best in class means more profits, a higher valuation, and potentially a much higher multiple in the event you decide to sell your business.
Best in Class means
Your business is not extremely owner-dependent
You know the gross margin of your products or services
A majority of your income is recurring
You have a twelve-month micro cash flow and five-year
macro forecast of revenue and expenses as well as profits
and margins
You and your team are reviewing financial statements
and trends on an ongoing basis
You don’t rely on a handful of clients for a large
percentage of revenue
No one client is providing 20 percent or more of sales
You are not dependent on one or two vendors
You have long-term employees
You have ongoing employee training
You have written job descriptions and key performance
indicators
You have identified potential key-person dependencies
You have systems and processes in place to handle
conflicts
You have a consistent recruiting engine for new
employee hires
You have effective leadership systems, including annual
reviews and team meetings
The culture of the business is leading to strong employee
retention
Your technology is customized and integrated
You have written standard operating procedures
Everyone is working on the right priorities, including
the owners
You have a consistent marketing engine
You have identified opportunities in your market
You have a clear strategy to identify and target ideal
clients
Your marketing team is consistently achieving their
sales goals
You have identified and quantified direct and indirect
costs of sales
You have a lead distribution plan and sales conversion
metrics in place
You have a sales process that converts leads to clients
who use tools, scripts, and systems
You have a strong and effective sales team and
compensation structure
Your business can run without you!
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