8 Attributes That Measure Business Value

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8 Attributes That Measure Business Value

 

Entrepreneurs typically have most of their wealth tied up in their business. Increasing the value of this largest asset can have the biggest financial impact for the business owner. A statistical research analysis of 6,955 businesses has pinpointed eight attributes how a business can increase in value by as much as 71% and, therefore, makes it more attractively sellable as well.

Based upon these eight attributes, businesses that can achieve a Value Builder Score of 80+ out of a possible 100 typically sell for 71% higher than the average business. The overall Value Builder Score for your business is derived from how well you perform with regard to the following eight attributes:

  1. Financial Performance: What’s your history for producing revenues and profits combined with the professionalism of your record keeping.
  2. Growth Potential: What’s the likelihood your business will grow in the future and at what rate.
  3. The Switzerland Structure: How dependent is your business upon any single employee, client, customer, vendor, or supplier.
  4. The Valuation Teeter Totter: How much is your business a cash drain or a cash spigot.
  5. The Hierarchy of Recurring Revenue: What proportion and quality of automatic, annuity-type revenue is received each month.
  6. The Monopoly Control: How well differentiated is your business from your industry competitors.
  7. Customer Satisfaction: What’s the probability that your clients/customers will repurchase and refer.
  8. Hub and Spoke: How well would your business perform if you as the owner were unable to work for three months or more.

Please CLICK HERE if you’re an entrepreneur interested to learn more about the eight key drivers of business value and sellability. It’ll help you start building the value of your most important asset, your business, and finding out what’s your Value Builder Score.

 

 

By |2018-09-30T21:29:33-04:00January 20th, 2017|Business Value, Mastermind Group|0 Comments

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