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Effectiveness: Accelerating Progress to Profitability

What is the Best Way to Increase the Value of Your Business?

When you are ready to sell your business, two primary factors influence the offers that you receive:

    • The pre-tax profit of the business
    • The value multiplier

The offer you get will be based on the profit of the business times the value multiplier. Increasing the value multiplier helps to ensure you get a premium offer based on the value of your business when you are ready to sell.


Are You Thinking Like a Manager or an Owner?


Many entrepreneurs mistakenly think like managers. A sales manager typically focuses on top-line revenue. Operations managers typically focus on managing operating expenses and general managers focus on net income, EBITDA, and profit.


But owners understand something different. They focus on improving the value of their company through the lens of a prospective buyer, not just the profit. The value of a company increases the multiplier which means being able to get a better offer for the company. 


The Value Builder Assessment


Tens of thousands of business owners have taken a Value Builder Assessment. The average score is 59 on a 100-point scale. The average offer received by these businesses is 3.5 times pre-tax profit.


Businesses that achieve a score of 90 or greater on average receive offers more than double the average performing business. Often, these businesses have worked with a Certified Value Builder for months to help them improve their Value Builder Score.


Increasing the Value of Your Business


After analyzing the data, we’ve discovered eight factors that drive the value of a business from the buyer’s perspective which is what the Value Builder Assessment measures:

Eight Factors that Affect Business Value: Financial Performance, Growth Potential, Switzerland Structure, Valuation Teeter-Totter, Recurring Revenue, Monopoly Control, Customer Satisfaction, Hub & Spoke

Working to increase the score on these eight factors can have a significant impact on the value of your business. Building a company that has a Value Builder Score of 90 or greater increases the likelihood of getting offers at almost three times the rate of the average performing business.


Even if you don’t want to sell your business, getting unsolicited offers puts you in control. You can simply say that you are not interested now and watch those offers increase over time. Or you can choose to engage with an acquirer on your terms with leverage. Having potential acquirers coming to you is a benefit of a high Value Builder score.


Learn About Value Builder and the Eight Factors for Increasing Your Company Value

Register for the Free, On-Demand 33-minute Webinar to learn how you can start viewing your company like an entrepreneur instead of a a manger and increase the value of your business.

 

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