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Business Valuation · Wealth & Retirement · Risk Management · Succession & Exit

Value of equity owned

An estimate of what the client's share of ownership in their business is worth

Business ValuationWealth & Retirement PlanningRisk Management & InsuranceSuccession & Exit Planning

In Summary

Value of equity owned represents the value of the client's personal share of equity in the business, estimated by applying the client's ownership percentage to an estimate of the equity value of the business.

Value of equity owned explained

When financial planning with business owners, it's important to consider the value of the client's personal share of equity in the business. Financial advisors should first estimate current business valuation and then identify how much of that value is held by the client.

In cases where the client's ownership is less than 100%, the value of their personal equity will directly inform planning elements like liquidity potential at exit and how much funding a buy-sell arrangement requires.

Estimating value of equity owned

Value of Equity Owned = Current Valuation Estimate x Ownership Percentage

Frequently Asked Questions