To calculate enterprise value, investors and buyers look ‘under the hood’ of a business and analyze the operations or ‘business engine’, typically as part of a due diligence process. However, how much (if any) of that value is transferable is determined largely by whether the business can dependably generate revenue and profit at or above its current rate, even without the current business owner(s) in charge.

This white paper outlines a new framework and methodology to quantify transferable enterprise value in SMEs. This methodology provides actionable transparency to the operations of a private business – an often missing yet critical component in financial valuations – to enable companies to improve value, communicate among owners, boards, and management teams, and successfully transfer to new owners.