Broker Check

Risk Mitigation & Wealth Preservation

Identify operational vulnerabilities and capital gaps before they impact your business valuation.

Building enterprise value takes decades, but unmitigated risk can erode it overnight. Real risk management isn't about generic corporate coverage. It is about identifying structural vulnerabilities that threaten your liquidity, ownership succession, and cash flow.

At Paxton Financial Services, we conduct a targeted gap analysis to expose hidden legal, operational, and financial liabilities. By fixing buy-sell agreement flaws, key-person dependencies, and wealth-transfer exposure, we work to help you identify unforeseen work disruptions so your business can avoid unforeseen disruptions.

Know Your Gaps 

Three numbers every business owner should know and manage to meet their goals.

Profit Gap

Profit Gap = The Profit You're Sacrificing by Not Operating at a Best-in-Class Level

Best-in-Class Profit at Your Level of Sales − Your Actual Profit

Key Points:

  • For the purposes of this discussion, profit is best defined as earnings before interest, taxes, depreciation, and amortization (EBITDA).
  • To ensure an apples-to-apples analysis, your actual EBITDA should be re-casted or adjusted for:Extraordinary or one-time events
  • Discretionary expenses that are tied to the owner
  • Expenses that are currently above or below market rates such as rent, compensation and others

What good could you do in the business with that extra flow?

Value Gap

Value Gap = The Business Value You're Sacrificing by Not Operating at a Best-in-Class Level

Best-in-Class Value at Your Level of Sales − Your Actual Business Value

Key Points:

  • The basis of the Best-in-Class Value begins with the Best-in-Class Profit at Your Level of Sales (determined in the Profit Gap analysis).
  • The Best-in-Class multiple is applied to the Best-in-Class Profit.
  • Your actual value should be based on your actual re-casted or adjusted EBITDA.

How quickly would narrowing your Value Gap close your Wealth Gap?

Wealth Gap

Wealth Gap = The Additional Wealth You Need to Accumulate to Meet Your Goal

Your Net Worth Goal − Your Current Actual Net Worth (not including your business)

Key Points:

  • For the purposes of this discussion, do not include the value of your business:
    • It is not easily converted to cash.
    • You may or may not convert it into cash depending on what you decide to do with it.
    • As you consider your net worth goal, identify.
      • What you truly need to live your life the way you would like
      • What you want

    How Will You Bridge the Gap?

    Downloadable Version Here

    Protection should be intentional, not assumed.

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