In my last blog entry, I wrote about creating company transferable value. Transferable value, for a closely held business is most simply what a business is worth to someone else without its original owner. Transferable value should not be confused with profit. True transferable value in a business is determined not by how well you run the business, but by how well the business runs without you. Effective value drivers increase company transferable value if they contribute to cash flow both during and after the original owner’s departure.
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