The Intent
You want a practical way to monitor value creation so you can adjust strategy before problems become expensive.
How I Solve It
I use the 25 Factors as recurring scorecards rather than static descriptors. Each factor is reviewed periodically to assess movement in strength, weakness, or risk. Factor #10: Processes and Documentation, Factor #13: Management Capability, Factor #14: Client Base, Factor #24: Risk, and Factor #25: Opportunity are especially useful indicators.
The 5 Senses Inspection Report provides qualitative confirmation that changes reflected on paper exist in day-to-day operations.
Experience
It is vital because "How do I track business value over time?" is not a mechanical calculation. It is a real-world judgment about risk, control, sustainability, and transferability — and that judgment is where 10–15 years of owner-operator and valuation experience, your gut–brain axis, does the heavy lifting.
Why It Is Not Mechanical
On paper, valuation appears formula-driven. In reality, governance rights, risk concentration, growth durability, market conditions, and stakeholder dynamics materially affect value.
Where Experience Changes the Number
Decisions around normalization, premiums, discounts, projections, and defensibility require judgment formed through lived ownership, negotiation, and financial accountability.
Why the Gut–Brain Axis Matters
The brain performs disciplined financial analysis. The gut recognizes unrealistic narratives, hidden leverage, emotional distortions, and deal risk. Together they produce conclusions that withstand scrutiny.
Protecting Financial Lives
The final number affects wealth, control, solvency, tax exposure, and long-term relationships. Requiring 10–15 years of serious hands-on business and valuation experience ensures the answer is fair, defensible, and durable. See my Experience page.
The Result
You gain a repeatable method for tracking value that supports informed decision-making year after year.