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Exit Planning / Succession Planning – Knowing Your Business Value

by David Shavzin

Exit Planning or Succession Planning is a PROCESS. When I speak on exit planning / succession planning, I talk about four high-level steps. See also Step 1: Exit Planning / Succession Planning is a TEAM SPORT , Step 3: Transferable Value Drivers – Exit / Succession Planning and Step 4: Business Exit Options.

Step 2: Knowing Your Business Value

Why is it important to know what your business is worth?

Well, the obvious answer is so that you know how much to ask for it when you are ready to sell.

But what about today? Do you know what it is worth right now? When I ask business owners about their business value, I often get an answer that goes something like this: “Oh I don’t know, I have at least a few years to go before I am ready to sell. So, why should I care about that now.”

Having an exit plan is critical. With your advisors in place, the next step is to know what your business is worth today.


A few good reasons to understand your business value TODAY:

  • What if someone approached you today with an offer to buy your business? Would you know if it was a fair offer? (And don’t say you wouldn’t sell…if that check was big enough…)
  • What if you have to sell before you are “ready”? Accidents happen, health issues happen, the economy has its ups and downs.
  • If you have a target value in mind, how do you know if you are on track to achieving that business value for your exit? Understanding your value today can serve as a benchmark to track growth toward your target exit value…and signal a problem if you are not growing as you need to for an exit when you want to leave.


The Bottom Line

Know your business value! Get a simple valuation done and develop a game plan with specific targets and timelines. Implement each step in the plan and monitor results at least monthly to ensure you are on track. Update the valuation annually to make sure you are ready when the time and money are right for YOU!



More Reading:

Step 1: Exit Planning / Succession Planning is a TEAM SPORT

Step 3: Transferable Value Drivers – Exit / Succession Planning

Step 4: Business Exit Options.

Business Transition – Case Study


David Shavzin, CMC

Shavzin and Associates, Inc.

Valuation, Succession, Exit Planning, Building Value for Sale

Atlanta, Georgia







Building Business Value - Business Growth, Business Valuation, Exit Planning - Succession Planning, Uncategorized

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