Risk and Reward of Concentrated Business Equity

Do you know what your numbers are? Are you clear on the value of your business? It’s difficult when you have concentrated business equity but it is really important to understand what your business’s value is, the numbers specifically, and allow it to show up in your world and your decisions. 

During our conversation today we discussed why having a plan for how you will ultimately exit your business and a valuation based on that plan allows you to treat your business like the critical investment it is. We cover a lot of ground in this conversation including:

Business equity valuation methodologies and when they may apply Why the valuation methodology depends on the vision for your business Not having an accurate business valuation means it doesn't feel like a real asset so you don't consider it one When you don't value your business as an asset you don't take advantage of opportunities or experiences as they present themselves because you feel like you can't depend on the business value Why a lack of knowledge on business valuation can lead to overfunding traditional retirement vehicles that are geared toward employees and not owners.

Tune in to this episode. 

Resources:

 

Destiny Capital (https://www.destinycapital.com)

What’s Discussed in This Episode: 

Jarrod and Tiffany give an overview of today's episode [4:11] Different approaches to valuation and factors that affect it [6:20] Revenue multiple Third-party valuation Different valuation firms and how to select the right one for your business Building a professional network for the purpose of valuation Getting objective feedback from others about the value of your business The need to educate one's self to understand the true value of your business [10:39] How an accurate business valuation helps you with decisions [11:25] The consequence when you don't value your business as an asset [13:17] Over funding of traditional retirement [16:05] Operating with range valuation aspects [19:14]

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