Glossary · Firm structure
Enterprise value
Enterprise value is what an advisory firm is worth to a buyer, driven by the durability and transferability of its cash flow rather than by revenue alone.
Buyers price risk. Client concentration, key-person dependency, undocumented process and messy data all reduce the multiple, and all of them are decided years before a sale.
A firm whose operations live in one person's head is worth measurably less than the same revenue run on a documented, transferable process.
Read more: What your firm is worth →
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