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MANAGEMENT
AM BUSY RUNNING MY BUSINESS.
Sales are good. I’m making a good
living. Why do I need to know what my company is worth?”
EVEN IF YOU ARE NOT LOOKING TO SELL, HERE’S HOW TO BUILD VALUE
BY JEFFRY MEYER, MAS, CPA
WHAT’S YOUR COMPANY WORTH?
Before we address the value of your distributorship, per-
haps we should discuss the importance of knowing how much
it is worth. Most people have investments, stocks, mutual
funds, an IRA, 401k, etc. I dare say you check the value of your
stocks and mutual funds regularly—monthly, weekly or even
daily. I’ll bet you have a pretty good idea how much your house
is worth. You also need to have a good idea of what your busi-
ness is worth and be proactive about building value in your
company. Your company should be your most valuable asset if
you plan it right and will be a significant part of your retire-
ment fund. If you die prematurely or become disabled, it will
be a valuable part of your estate or long-term care, providing
for yourself, your spouse, children and grandchildren.
“How will knowing the value of my company help me provide for
my short-term and long-term financial needs?”
A valuation will not only quantify the current worth of
your company, but will also benchmark the value drivers and
provide the framework for decisions that will increase what
your company is worth. It will enable you to generate action
items to motivate your employees and salespeople to help
increase value.
“What are some of the factors that contribute to my company’s
value?”
Current value to business owners is typically based upon
income stream to pay personal expenses, status in the commu-
“I
APRIL 2015 •
PPB
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