While most publicly traded companies are operated with a focus on company value, as represented by stock price, most entrepreneurial and family-owned companies are not operated to maximize the value of the company. Actually, the owners of most small and mid-sized companies don’t even know the real value of their business.
There are four reasons why business owners should focus on increasing the value of their company – even if they never plan to sell their company:
- A business owner’s company typically represents 70% or more of their net worth. Since it’s their largest asset, the best way to increase their personal wealth is to increase the value of their company.
- Company value is the most objective way to determine how well the company is performing. It’s also the best way to identify and prioritize things that should be done to improve the performance of the company.
- Even if a business owner doesn’t plan to sell their business, the company may suddenly be for sale because 50% of private company sales are driven by unplanned events – including disasters, incapacity, death or other life events.
- 100% of business owners with eventually exit their company.
Building on our experience in selling more than fifty closely held and family-owned companies, Corporate Performance Group provides specialized expertise and support to help business owners maximize the value of their company.