Where Will Your Business Be in Five Years? Start With a Business Valuation
Picture a diner booth, a half eaten plate of eggs, and an owner sketching the next five years on a napkin. Revenue climbs here, a second location appears there, and a retirement date sits in the corner with a circle around it. It’s a good napkin. The trouble is, it starts from a number the owner has never actually checked. So can you plan five years out without knowing today’s number? Not very well. A business valuation fixes the starting line, and your enterprise value is the figure a forecast grows from. Chartwell Value puts a five year forecast right in its toolkit, and it’s worth seeing how the pieces fit together. Start with where you are today Napkin plans usually skip the dull part. Before projecting anything, the site says to pull clean, normalized earnings out of your P&L, because those are the true starting point of value. Skip that step and a forecast turns into a wish with a spreadsheet wrapped around it. That’s how a lot of them end up, and the owner usually find...