Addressing the Value Gap – Living Expenses

The Value Gap is the difference between what a business owner would realize if he or she sold their company today, and what they need to embark on a financially secure “next act” after business ownership. Both amounts can be determined with some accuracy by professionals. A qualified business appraiser can analyze a company, its prospects, differentiation, markets, and comparative businesses and develop a value for the business.  A certified financial planner (CFP) can look at savings, expected future income, anticipated lifestyle expenses, life expectancy, and inflation and develop a scenario for the amount needed to fund those expectations.

Simple, right? Financial plan requirements minus net proceeds from the business transfer equals the value gap.