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Sale-Able Value

I met with a prospective client yesterday as he was inquiring about the value of his business.  He was ready to retire and enjoy all the “toys” he amassed while running his business… a beautiful boat, lake house, plane, oceanfront condo, three golf club memberships.  Yes – he made a lot of money over the years and in those terms was quite successful.

But, unfortunately there was little value in his business.  Why?  He led all sales efforts and held the relationships with his customers close to his vest.  He did not have talented management to support the operations and he had not invested in new technologies to keep the business competitive.  The asset value of the company would not even come close to generating enough income to support his lifestyle.

He has a couple choices…

  • Continue working in his current manner and save enough to support the lifestyle he created.
  • Invest in people and technology to create value in the business that went beyond his efforts.

What path he takes remains to be seen.  There are risks to both, but both can work.  What I find disturbing in this case is that over a 25 year period the owners goals (regarding the building his business for sale to an outside party) and his lifestyle/business investment choices we’re never aligned.  Now at 68 years old, he is realizing the disconnect

As the commercial goes…. Don’t be that “guy”.

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