The Money Value of Time
ADVISROY BLOG | SCOTT HARDMAN, MANAGING DIR. | AUGUST 2021
We have all heard the saying “time is money.” It reflects the financial principle referred to as the Time Value of Money (TVM). TVM deals with the reality that a dollar today is valued differently than a dollar at some point in the future. TVM is the basis for paying and receiving interest, the calculation of Present Value and many other important business and financial activities.
TVM is important. However, as we visit and counsel with business owners, we see many of them considering a corollary to TVM when they are considering selling their company. They are thinking about the Money Value of (their) Time.
Many business owners realize that growing the value of the business over the coming years is simply not worth them giving the time it will take. This is especially true of older owners where growing the value of business is not worth devoting a significant portion of their remaining active years. The increase in value is not worth to them the time they will need to invest.
When business owners are considering these questions, our senior team members at Alexander Hutton are always pleased to meet and discuss the important variables to be considered in the potential sale of all or part of a company. With over 215 completed transactions, we are ideally suited to assist. We welcome the opportunity to be of help.
Scott Hardman James Thompson Kent Johnson Stephen Humphreys
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