Value to some extent is in the eye of the beholder. A business can be valuable for a person or small team due to how it generates new business services existing customers and client relationships and at the same time NOT be valuable to a buyer.
Why?
The answer lies in the organizational structure as well as other key components of the business. In short its how the business is run on a day to day basis.
First let me say it is perfectly fine and appropriate for a business to be valuable for the current owner or partners and team and not be valuable as a transferable assets. It depends on the owners objectives. Many clients we work with run their enterprise for personal gain, extracting the maximum cash flow they can now to build their net worth with the goal of exiting and selling their client lists or some goodwill for a small value. The personal planning and goals are aligned with a well designed strategy. Extract their value while running it and build their net worth "outside" of their business value.
For this type of owner, value growth is more of a cash flow and next 5-7 years focus. Or maybe an even shorter time frame. If they have a well designed personal financial plan that is comprehensive and integrated into a "cash flow extraction business strategy" and it is reassessed each year this plan can work.
I would say the bulk of business owners I meet are in a cash flow extraction strategy as their default. They have this strategy by default, its not something they purposely mapped out. Some may think that they also have a valuable transferable business but in many cases they do not. Not because this is not achievable but because they have not organized the business to be a valuable transferable business for a buyer to consider.
My question to you is: Are you currently running your business and making strategic decisions in your business congruent and coordinated with a personal financial values and goals based plan as your focus?
If your personal plan requires today a cash out or liquidity event of your business when you leave or exit the business at a date of your choosing, is the value you need achievable, realistic, measured and assessed?
In other words to fund your next chapter post business do you need to sell it for $X, or can you meet your goals by extracting cash flow now until your planning date arrives?
Please do not make the error of assuming you can sell your business when you are ready to stop.
Get your personal plan and business planning assessed, make conscious decisions and cash flow extraction and business value build and match it up. Work your plan, and get a handle today on where you are.