The Value Gap is the difference between the value you need your business to provide and the comparable value shown by the current position or forecast. It turns a wealth goal into a specific question about what still needs to change.

Name which gap you are measuring

Two comparisons answer different questions:

• Improvement required from today: future target less today’s comparable value.
• Remaining forecast shortfall: future target less projected value on the target date.

In a hypothetical example, today’s company equity is $4 million, the five-year target is $10 million and the forecast reaches $8.5 million. The required improvement is $6 million; the forecast still leaves a $1.5 million shortfall. Forecast improvement is an estimate, not an achieved result.

Compare the same kind of value

Begin with the dated Wealth goal on the Owner’s Scorecard. Account for your other net assets and ownership interest to establish the business contribution required.

Then choose the relevant value basis. Keeping the business, receiving cash at closing and receiving uncertain later sale payments produce different comparisons. Company enterprise value cannot be subtracted directly from a personal after-tax cash requirement. Today’s discounted Owner’s Value is also not a future-year bank balance.

State the target date, ownership share, tax basis, scenario and model edition. Keep outside assets, closing proceeds and remaining deal value separate so none is counted twice. If a required input is missing, the gap is unresolved rather than zero.

Use the gap to choose work

The four value levers help explain what might change the outcome: earnings, the supported valuation multiple, net debt and operating working capital. Their effects overlap. Better collections may already appear in cash and net debt; debt repayment funded from existing cash does not create the same amount of new equity.

Test the proposed response through the connected model. A plan that reaches the value target but runs out of cash beforehand still needs work. A favorable value result can create choices about time, income or risk; it does not automatically select your next priority.

Review the gap at the Quarterly Boardroom and annual reset, or after a material change. Preserve the existing goal unless you deliberately change it. The current forecast belongs in The Numbers; the chosen priority and Game Plan belong in The Plan.

Put the idea to work

Explore Module 4 to connect this idea to the work, evidence and tools. Browse all concepts or see the complete system.