EXIT PLANNING IS EQUITY VALUE PLANNING

You client has a wealth gap: they don't have enough AUM to fund their personal wealth goals. Their business is supposed to close the gap - and the business has a value gap.

If like us you're committed to delivering successful exits then you are in the business of Equity Value Planning. 

Discover 'The Number', put a date on it, and execute a plan to deliver. 

Questions for you: Is discovering the wealth gap and business value gap part your client discovery process? Should it be? Who should be leading this discovery - you, or someone else? Bottom line, you should. For the typical client their business is their largest asset, 80% of their net worth, and without your help... it is headed for heartbreak. Imagine the power from deliver this massive equity value planning  "AHA!"

"AHA!" Why? Clients are smart -they know the range of multiples for their industry; they have friends who have sold their businesses... So your client 'knows' what their business is worth. "My company does $1 Million in profits and it's worth $6 Million."  Right? Wrong (for 19 of 20 clients).

[Side note: Every engagement should start with discovering strategic intent: what is your client's 'Ultimate Why"? When you hear "I want to grow revenues to $15 Million", what will this make possible? What options does $15MM create?] 

This is where you prove your value: "You've created an $6 Million asset but the price someone will pay for it is more in the $2 Million range." Whoa. Price... aka transferable value. 

You are the pro who shoots straight, helps them see the truth, creating an equity value plan for the business to have X transferable value by Y date. They don't have to sell, but they're hung if they need the option and haven't done the work.

Image: Equity Value Planning Calculator

If you're thinking about turbo-charging your equity value planning tools, here are a few things you might consider: 

1. The Right Value: DCF or Market Comps? As a recent Harvard article says "The DCF Emperor has no clothes". Consider adding the private capital markets perspective by adding the market approach to calculating transferable value.
   
   
2. Best Methodology: Are you making the purposeful link between business quality (Strategic Capacity) and transferable value - while showing how to make profit and value growth actionable? You can avoid being forced to explain why that value number is so disappointing (putting you on the defense) by adding and analysis built on a proven methodology for growing profits & value. 
   
   
3. A language your clients understand: Does your current tool speak CEO? Or is it pages and pages of financial CFO-speak with maybe a couple of pages of KPIs? Ask yourself: Might reports that speak CEO, speak 'operations and best practices' add juice to winning and keeping clients?
   
   
4. Calculations in Real Time: Clients want immediate intel. Consider adding a tool which in real time calculates maximum value, transferable value (price), and operational scores for a complete set of growth-driving objectives and key results. This should include the value gap, guiding your equity value planning with immediate calculations of future equity value as it relates to your client's wealth goals. 
   
   
5. Due Diligence is Quantitative: The market cares not at all if your client thinks they're a 10 of 10. The market cares about proven, about certainty. Consider improving your growth initiatives and M&A prep with quantified analysis: "Our margins are >20% above the market and we can prove it."
   
   Want to see for yourself? Book a quick consultation.
   
   
6. COI Opportunities: Whether you're a Wealth Advisor or a Business Coach, you benefit from identifying opportunities for business growth and continuity planning such as  advanced financial planning, sophisticated risk and succession insurance, Fractional CFO services, and similar fueling a Strategic Plan through which the business will grow profits and transferable value, with guidance on specific projects and KPIs. Equity planning and monetization are a team sport. 
   
   
7. One Price or Up-charges: If you have to pay extra for reports, calculate if it might be more cost effective to add a platform where everything is included. Everything means everything: biz dev, client discovery, equity value planning, range of values and transferable value, senior team alignment, deep analysis, execution guidance, planning templates, strategic capacity reports... all linked to an execution leadership system with scorecards. Time is money, and you can add efficiency to your equity planning and growth engagements with tools that API to the world. Tools should work for you, not the other way around. *Related, are you required to get certified to use a system? How does that feel?

Someone said recently that what we're doing is actually revolutionary: that we actively  respect you as an advisor. Thank you. Growth-Drive's 10 year vision is $1 Trillion of middle market and pre-middle market businesses increasing Strategic Capacity in the 3 Dimensions of Business Growth. If you've read my book you know that advisors like you are the key to success. We are executing against the first horizon: delivering the training, tools and support you need to build a thriving advisory business based on delivering client wins. Since we also hold that maximized transferable value is the ultimate measure of business success, you can see why equity planning is important. 

Achieving our vision is not contingent on you paying us - this is why our initial analysis and so many of our webinars and tools are free. Do we want you to become a customer? You bet. And we work hard for our customers - not the other way around. We are committed to your success.

Thanks, -George

PS: C3B is coming... and it's exciting.  

Schedule your free consultation here.

There are a lot of good tools out there. The Growth-Drive Platform turbocharges tools and systems like EOS(r), Ninety.io(r), BizEquity(r), Capitaliz(r), ValueBuilder(r), VOP(r), ProfitCents(r) and more. Brands and marks are the property of their respective owners.