Business Owners

The value gap calculator

What the business has to be worth, and what it has to grow by each year to get there.

Value gap·
Sale price required
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Growth needed each year
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Projected value at exit
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EBITDA required at exit
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EBITDA projected at exit
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EBITDA to build
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How it works

What this is actually calculating.

A shortfall expressed in dollars is abstract. Expressed as the value your company has to reach, and the growth rate that implies, it becomes an operating target you can actually manage against.

The calculation works backwards from what you need, grosses it up for the fees and tax that come out of a sale first, and compares the result to what the business is worth today. The difference, spread across your timeline, is the annual growth required, and the calculator now reports that rate beside the one you entered.

What moves the number

The parts that decide the answer.

A required growth rate is a reality check

If the number comes back at thirty percent a year, the plan is not a growth plan. It is a longer timeline, a lower target, or capital built outside the business.

Value growth is more controllable than price

Reducing owner dependence, diversifying customers and cleaning up reporting raise the multiple. Those are operating decisions, not market conditions.

Time is the strongest input

The same gap over ten years and over three years are entirely different problems. Every year you delay raises the required rate.

Questions

Before you rely on it.

Where does the shortfall figure come from?

The wealth gap calculator. Run it first, then bring the number here.

Does this assume I sell the whole business?

Yes. A partial sale or recapitalisation changes both the proceeds and the tax treatment.

Is the growth rate compounded?

Yes, annually, over the number of years you enter.

Before you rely on it

About this calculator.

An illustration, not advice

This is an educational illustration, not investment, tax, or legal advice, and not a recommendation or projection of any particular result. It uses only the assumptions you enter.

Real returns are not this smooth

Where a return is involved it is treated as constant, which no real portfolio is. Actual results will differ, and a sequence of poor early returns can change an outcome substantially even when the average holds.

Nothing you type leaves your browser

Every calculation runs on your own machine. Nothing you enter is transmitted or stored, and none of it reaches me unless you ask for a PDF and give me your details.

Talk to your CPA and attorney before relying on any of it.See all twelve calculators