Are You Value Building Your Business?

Most business owners want to create wealth, exit on their terms, and empower the next generation to continue the legacy of their blood, sweat, and tears. There is only one way to make this happen – maximize the value of your business, NOW.  Because if you wait, you will run out of runway. It happens all too often.
How do you maximize value?  Focus on the eight drivers of value as outlined in the Value Builder Program offered by Compass Point.  The eight value drivers have been identified by working with over 30,000 businesses that have participated in the Value Builder Program.  These value drivers increase owner income today and give the owner numerous options at time of exit.
The eight key drivers of value include:

  1. Financial performance
  2. Growth potential
  3. Customer/Supplier/Employee dependency
  4. Cash flow
  5. Revenue streams
  6. Differentiation  
  7. Customer satisfaction
  8. Owner dependency  

Maximizing value, also known as value acceleration, is about creating the most options for the owner as he or she begins to think about their exit. Most owners only get a shot at this once in their life. Owners are generally very good at running their businesses and knowing their products. But what has made them so successful to date – “I’ll figure it out”, becomes their Achilles heel at transition.
This is probably one of those things you don't want to just figure out. If the sale is for an Insider, leaving them with a healthy business that has maximized its value will increase the odds that you will get your net worth out.  If it is a sale to an Outsider, transition is their product. They know how to buy businesses. They know how to discount businesses. They're looking for the ways to do that. That's the game that gets played.
We want to get you to be on the winning side of that game so that you have options - sell the business at a premium, pass it on to the next generation, or maybe even put it in a family trust where you hire a management team to run that business while the family earns dividends.
Over the next several months, I will be walking through each of these value drivers and be giving you hints about how you implement them in your business.
Value acceleration is not about the end game.  It is about what you are doing today to drive value that in turn provides income and options.  Get your business working for you.
Check out my video here on the 8 Key Drivers of Company Value.

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