{"id":3078,"date":"2024-07-23T10:34:49","date_gmt":"2024-07-23T15:34:49","guid":{"rendered":"https:\/\/jdtadvisory.com\/staging\/4959\/?p=3078"},"modified":"2024-07-24T11:37:51","modified_gmt":"2024-07-24T16:37:51","slug":"your-happily-ever-after","status":"publish","type":"post","link":"https:\/\/jdtadvisory.com\/staging\/4959\/your-happily-ever-after\/","title":{"rendered":"Your Happily Ever After?"},"content":{"rendered":"\n

When my daughter was in preschool, I spent many nights reading to her about the adventures of princesses like Ariel, Aurora, Belle, and Rapunzel. Girl Dads know when you read these stories enough times, you know them by heart! But fairy tales are not just for little ones. Let\u2019s meet a Wealthpreneur<\/em> who is the hero of his own business ownership adventure.<\/p>\n\n\n\n

Once upon a time…<\/strong>
Douglas Barnes is the fictional founder of a family-owned Midwestern manufacturing company. Barnes Manufacturing LLC\u2019s specialty products are in great demand, the company reports high pretax profit margins<\/span><\/strong><\/a> ,and it consistently achieves its core capital target<\/span><\/strong><\/a>.<\/p>\n\n\n\n

Thanks to his master’s degree in engineering from MIT, Doug personally designed all the company\u2019s major products. A handful of key customers account for more than 60% of the company\u2019s revenue, and Doug knows all the company CEOs by their first names. He personally closes every major new customer contract. Doug has not taken a day of vacation since he founded the company 25 years ago! The annual cash flow to owner exceeds $5 million.<\/p>\n\n\n\n

Investment bankers, business brokers, private equity firms, and strategic acquirers frequently inquire about purchasing Barnes Manufacturing. When Doug hears stories about the dangers of the 5 D’s<\/span><\/strong><\/a>,  he meets with a Certified Exit Planning Advisor (CEPA) to discuss the valuation of his business and its future sale potential.<\/p>\n\n\n\n

Doug is devastated to learn his company lacks transferable business value<\/em>. He realizes receiving a premium price purchase offer from a prospective buyer is unlikely. Doug\u2019s CEPA recommends taking several strategic steps to close the \u201cvalue gap\u201d between his company’s current value and its much higher potential value that will make his business more attractive to potential buyers.<\/p>\n\n\n\n

Doug immediately begins to implement the strategies his CEPA recommended. Barnes Manufacturing is on track to becoming a much more valuable business! And they all lived happily ever after.<\/p>\n\n\n\n

One man\u2019s treasure is another man\u2019s trash<\/strong>
According to business valuation expert Chris Mercer, there are two kinds of business value: your business\u2019s value to you as an owner, and its transferable value.<\/p>\n\n\n\n

A business may have a different value to different potential owners, depending on each person\u2019s perspective. The value of a business may even be unique to a specific owner. This \u201cspecial value\u201d can be caused by the owner having one or more of the following mindsets.<\/p>\n\n\n\n