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Take a minute.
Think about what kind of business you’re building.
If you wanted to sell your business tomorrow, could you? What if you had to? Would a buyer even be interested?
It’s important to be able to answer those questions even if you are not considering a sale. Understanding the value of your business allows you to not only build an asset for your future, but also allows for continued growth and sustainability.
Value can be assessed using eight key drivers:
- Financial Performance
- Understand your top and bottom line
- Growth Potential
- Know your revenue potential and have confidence in your future income stream
- Independence
- How dependent are you on specific customers, employees, vendors?
- Working Capital
- Determine your working capital efficiency and cash flow needs
- The Hierarchy of Recurring Revenue
- Analyze your repeat sales potential
- The Monopoly of Control
- Understand your proprietary products, pricing strength and differentiation
- Customer Satisfaction
- How loyal are your customers and their referral potential?
- Management Depth
- How dependent is your business on you?
Using the Value Builder System™ and focusing on these eight drivers is statistically proven to increase the value of your business. You will identify ways to make your company even stronger – a valuable asset for every business, not just those considering a potential future sale.
We will explore some of these areas in greater detail in future posts, and SVA will host a seminar on this topic in Madison at the UW-Madison’s Fluno Center on Wednesday, May 31st and on Thursday, June 1st at the Embassy Suites in Brookfield. For more information on these events, please visit www.sva.com/execseries.
