8 Key Drivers of Company Value
John Warrillow, the founder of The Value Builder System and the author of Built to Sell: Creating a Business That Can Thrive Without You discusses 8 key drivers that drive the sellability of a company.
The analysis of these factors will be the basis in calculating your Value Builder Score.
Along with your score, you will also see results on all of the 8 key value drivers and the average score for each among companies in your industry.
Value Driver 1 of 8: Financial Performance
There are 8 key drivers that drive the sellability of a company, says John Warrilow, the founder of The Value Builder System and the author of Built to Sell: Creating a Business That Can Thrive Without You.
The first one is easy to understand but difficult to deliver. It's your financial performance. But it's not just about what those numbers are but the quality of the reporting of those numbers. Watch this.
Value Driver 2 of 8: Growth Potential
The second driver of company sellability is growth potential. Most business owners are proud of what they've done in the past.
But the hard truth is that, when a buyer comes in, they're not buying the past or what you've done in the past, they're buying your future stream of profits. "What can this business do in the future?" Watch this.
Value Driver 3 of 8: The Switzerland Structure
What is the Switzerland Structure? It gets its name from the country Switzerland. They take the obsession of being independent, not overly dependent on anyone/anything.
Why is it essential in building a sellable company? Watch this.
Value Driver 4 of 8: The Valuation Teeter Totter
The teeter totter, the same relationship exists between the way cash moves through your company and its value. It's one of the drivers of sellability.
Value Driver 5 of 8: Recurring Revenue
The more recurring revenue you're going to have, the more valuable your business is going to be. There are 6 different forms of recurring revenue. Buyers view each of these different forms differently.
Learn the hierarchy of recurring revenue by watching this short video.
Value Driver 6 of 8: Monopoly of Control
The monopoly of control is an attribute of sellability that means you've got control of how you've priced your products. You're not commoditized because you are unique and different from all that's in the market.
Having a differentiated marketing proposition gives you the ability to control your pricing. Watch and learn more...
Value Driver 7 of 8: Customer Satisfaction
Customer satisfaction is an obvious driver to sellability. It will be important for the buyers to know how satisfied your customers are with your product or service. You will need to measure customer satisfaction.
Value Driver 8 of 8: Hub and Spoke
How dependent your business is on you personally? The more dependent your company is on you, the lower you're gonna score on Hub and Spoke. How can you operate your business when you're not there? Watch this.