You are reading: VPI Reports for September 2022 (3rd quarter)

According to our latest quarterly Value Potential Index reports, the global value of privately owned businesses is more than $50 trillion. In the United States alone, these businesses are worth $24.28 trillion. As discussed previously and in many of our articles, the wealth represented by these businesses ( many owned by baby boomers ) is the most significant transfer of wealth in history. Whilst the value of these businesses fluctuates with capital markets and economic factors, as well as the availability of capital and interest rates, the value is substantial, and assisting business owners to maximise the value of these assets and successfully exit is a massive undertaking over the next 10 years. Many of these business owners have delayed retirement – Some simply weren’t ready to retire, others delayed as a result of COVID-19, etc – the reality is they all will exit, and many within the next 5 to 10 years time.

The analysis in the Value Potential Index highlights the value gap or the difference between the actual valuation of these businesses and what the businesses could be or should be worth if properly prepared and engaged in a value acceleration process. In the United States, this value gap is $3.67 trillion, in the United Kingdom, the value gap is $432 billion, and the typical midmarket business is leaving approximately $3 million on the table by simply not allowing enough time, effort, and investment in maximising business value.

The Business Insights Report that the Capitaliz software produces for business owners highlights the current valuation, the value potential, and of course, the gap or difference between the two and then recommends an implementation plan to close the gap over a period of time. Owners undertaking this process can successfully close the gap maximise the value of their business, and ultimately achieve a successful exit.

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