This section of the Maus Exit Planning system will help you build an initial understanding of business valuation, the key concepts effecting valuation and metrics being discussed moving forward. This is your baseline & motivation.
Within the Value Gap section of the Maus Exit Planning system, you are able to input a short selection of metrics and in return be provided with an estimated current value, current trajectory and possible trajectory based on idealistic figures. Additionally, this is also the area of the system where you can enter and manage your client's Multiples.
This is not intended to be a formal valuation, but rather the first step towards understanding valuation, therefore helping you target the key areas of your business which will be most impactful to your businesses value. Later in the Exit Planning process, you will perform a Value Range assessment to help you further these concepts and best prioritize your action plan.
Your key inputs for this section are:
- Earnings
- Current Earnings Growth
- Goal Earnings Growth
- Low Multiple
- High Multiple
- Projected Years
While many of these metrics will be entered directly into the inputs on the screen, such as Earnings, and the growth rates, you will have to leverage the "Set Multiples" tool to input your client's Multiples.
From within this popup, you can manually enter your client's multiples, in addition to their NAICS code, into the left hand side of this screen. While we understand many metrics such as their revenue and growth goals will be supplied by the client and their financial reporting, should you not have information on the relevant Multiple Data, you are welcome to use the "NAICS code search" tool and the "Get Data" prompt to review a selection of historical industry multiples supplied by our partners at BVR Deal Stats.
Please be aware that entering a clients NAICS code and selecting "Get Data" is a one off paid service, paid directly to our partners at BVR Deal Stats for the data in question.
This data, once pulled from BVR's database, will be available indefinitely in your account. You can select an individual transaction from the downloaded data, to automatically fill the values for your multiples:
Regardless of whether you are manually keying in the inputs, or utilizing data from the BVR Deal Stats database, hit "Save" to apply these multiples to your Exit Plan, including within the Value Gap, and the Value Range tools.
Once you have input the relevant information, you will then be able to observe your client's estimated current value, current trajectory and possible trajectory via the chart and table within the system. Additionally, you are also presented with an "Achievement of Goals" slider which will allow you to review different scenarios based on your possible success enhancing the value of your business.
0% on the slider will represent your figures at your current margin and multiple, 100% representing your fully realized ideal margin and multiple.
The final figure that you want to walk away with is your "Value Enhancement Gap", which represents the money left on the table after your selected number of projected years, should you not be successful in your Value Enhancement. This is your motivator as you enter into the Exit Planning software and your goal.
When you are comfortable with the scenario you have outlaid, you can then click "Generate Report" to produce your Value Gap Report. With this you will receive a 10+ page report further diving into the valuation concepts at play, figures you have input, and methodologies to consider moving forward.
