As of February 2022 we chose to no longer use the Value Builder Score as our preferred tool to analyse our clients businesses.
Our experience the tools estimation of $$ value to be misleading especially with businesses less than $1 million EBITDA especially post COVID. Again this is our experience and others may not agree.
As we are no longer a partner, we no longer have access to the final report and be able to do the debrief with you.
We have provided an external link below should you still wish to complete the Value Builder Score.
On the flip-side we are currently rolling out our own suite of tools to assess Australian businesses to prepare them for exit by either hands off management (mostly), or fully by sale….or simply make more, while working less.
If you would like to discuss BOSS-The Business Owners Success System to see if & how it can help book a quick 10-minute overview and analysis. Click Here To Book
Watch the explainer videos for each of the eight sellability drivers below.
What’s your score? Take the Sellability Score Survey and receive a 24 page Sellability Report for free….
Value Builder Premium
Let us introduce you to a statistically proven way to increase the value of your company by as much as 71%. Through an analysis of 6,955 businesses, we’ve discovered that companies that achieve a Value Builder Score of 80+ out of a possible 100 receive offers to buy their business that are 71% higher than what the average company receives.
Sellability Driver 1 of 8 Financial Performance
Financial Performance: your history of producing revenue and profit combined with the professionalism of your record keeping.
As business owners, we may only think of one thing above any others about our business –its revenue, regardless if it’s the top line revenue or the business’ bottom line profit. The financial performance of the business will not only look on these things. Under the microscope of the buyers, how defendable your business numbers matters. So report these numbers with credible back ups – financial auditors. Investing in an audit is one way to improve your business score in financial performance.
Sellability Driver 2 of 8 Growth Potential
Growth Potential: your likelihood to grow your business in the future and at what rate.
Business owners are always proud of what they have done in their business, or what they made it to be from how it was in the past, are you? And that is completely normal. You may have won a business excellence award or have built a 10-year old business. The growth potential as one of the sellability drivers will look on one thing – forward. The question will be, from what you’ve done for the business, what will this business become in the future? So basically, increasing the growth potential score of the business would mean focusing on future potentials of the business. Can you replicate your business somewhere else? Can you reach a new customer group? All of questions like these when answered with a YES, and then you are not only growing the business, but also making a sellable business.
Sellability Driver 3 of 8 The Switzerland Structure
The Switzerland Structure: how dependent your business is on any one employee, customer or supplier.
Making a sellable company would mean making it valuable for the buyers to consider. When these buyers come in, one of the things that would drive your business’ sellability is the Switzerland structure. The name was taken from the country itself – Switzerland. History says it all, they were known to being independent, did not join the World Wars, didn’t send troop to Iraq, did not join the UN until a referendum was made, and all there is to becoming an independent country. In the business world, a business owner should be independent of the three most important groups: customers, employees, and suppliers. As a business owner, you cannot have concentrated groups from each to rely on. When a buyer comes in, and see that your business is too reliant on you, it will be too risky for them. It won’t give them the assurance that the business will run without you. To get a good core on this aspect, you have to make sure you get a good diversification on your customers, employees, and suppliers.
Sellability Driver 4 of 8 The Valuation See-saw (Tetter Totter)
The Valuation See-saw (Teeter-totter): whether your business is a cash suck or a cash fountain. A business has to look at one of the most important things – cash flow.
Everyone in a business does. The Valuation Teeter Totter as one of the sellability drivers looks at how fast your company generates cash. It looks at how cash moves through the company. Collecting receivables, extending payables to make sure you allow cash to move. All these will help increase your score in this attribute.
Sellability Driver 5 of 8 Recurring Revenue
The Hierarchy of Recurring Turnover: the proportion and quality of automatic, annuity-based turnover you collect each month.
The hierarchy of recurring revenue is one of the sellability drivers of a business. This is when a buyer looks at how the business continues when the owner leaves. The six forms of recurring revenue will be discussed in the video. These are the forms of which the buyers look at as they buy the business. Increasing your business sellability score in this attribute is seeing your business climb up the ladder of hierarchy. The higher the business comes up the ladder, the higher the value of the business.
Sellability Driver 6 of 8 Monopoly of Control
The Monopoly Control: how well differentiated your business is from competitors in your industry.
Being different amongst all the existing business may be one of the greatest challenges of a business owner. Building a sellable company would need one of the sellable attributes – The monopoly control. This is you, as the business owner, controlling the price of your product. You are able to control simply because you are different, and what does being different mean? The more margin you can make, and the more you can invest in the sales and marketing aspect of the business. The moment the business is able to successfully reach out too the customers in whatever ways, that’s when it starts to have meaning. And these will drive up the monopoly score.
Sellability Driver 7 of 8 Customer Satisfaction
Customer Satisfaction: the likelihood that your customers will re-purchase and also refer you.
Obviously, everyone aims for customer satisfaction. And so will your buyers too. When buyers look at a business, as mentioned, they will look at how the business will run in the future. In building a good customer satisfaction score, then start to measure this attribute. More than asking your customers via a survey if they are satisfied or not, let them rate it. Investing in these customer satisfaction materials to measure will help the business manage this attribute. Identifying these areas will create an effect of improving the business’ sales through your repeat customers.
Sellability Driver 8 of 8 Hub & Spoke
Hub & Spoke: how your business would perform if you were unexpectedly unable to work for a period of three months.
The hub and spoke attribute is your business’ dependence in you as the owner. It all goes down to, will the business run when you leave. And again, this may be the first question on a buyer’s list. So, as a business owner, you have to consider, are the processes that you have at hand all in your head? Will everyone in the company run to you to learn it? Or is it written and accessible for everyone’s learning, so when you leave, the business runs smooth?
Our Vision at the Sellability Score
John Warrillow reveals his vision for creating The Sellability Score.
Getting your Sellability Score is always free. You can then choose to hire us as advisor/coach to help you increase the value of your business or, if you prefer, go it alone – the choice is always yours.