A Guide to Transforming Your Business into an Asset for Sustainable Success
.webp)
.webp)
.webp)
Building
To establish a company that operates efficiently without an owner’s direct involvement, requires viewing the business as an asset, as opposed to a job.
The fundamental principle is to structure the business to be a self-sufficient enterprise that can operate without relying on the owner. This enhances the value of the business, and makes it appealing to potential buyers, regardless of whether there are intentions to sell. The criteria that make a business enticing to buyers are the same ones that ensures its self-sustainability.
Prospective buyers are drawn to businesses that can function seamlessly without its owner, a fundamental characteristic of an autonomous enterprise. At Value Builders, our strategy focuses on enhancing a company's performance across eight key areas that are important to prospective purchasers.
Financial Performance
Your history of producing revenue and profit combined with the professionalism of your record keeping.
Growth Potential
Your likelihood to grow your business in the future and at what rate.
Switzerland Structure
How dependent your business is on any one employee, customer or supplier.
Valuation Teeter - Totter
Whether your business is a cash suck or a cash spigot.
Recurring Revenue
The proportion and quality of automatic, annuity-based revenue you collect each month.
Monopoly Control
How well differentiated your business is from competitors in your industry.
Customer Satisfaction
The likelihood that your customers will re-purchase and also refer you.
Hub & Spoke
How your business would perform if you were unexpectedly unable to work for a period of three months.
Accelerating
After establishing a business that operates seamlessly without the owner’s direct involvement in every area of the business, the next step in our approach is to generate a consistent source of recurring income.
This steady revenue stream not only enhances the predictability of a company, allowing the owner to confidently plan for the future, but it also amplifies the lifetime value of an average customer. Significantly, this elevates the company's value, in some instances, this could potentially double or even triple the perceived value of each revenue dollar to a potential buyer, thereby enhancing the business's appeal to them.
Navigating this phase may seem complex to many business owners, but there are nine distinct subscription models to choose from, and virtually any business can benefit from incorporating at least one.
The Network Model
A subscription offering where the value of the subscription goes up, the more people that subscribe.
The Surprise Box Model
This model involves shipping a curated package of goodies to your subscribers each month.
The All-You-Can-Eat Library Model
A subscription offering a buffet of content to subscribers.
The Private Club Model
A subscription offering access to something of limited supply on a membership or subscription basis.
The Front-Of-The-Line Model
This model involves selling priority access to a group of your customers.
The Membership Website Model
This model involves publishing your know-how behind a pay wall where subscribers get access to unique content.
The Simplifier Model
This model involves taking a service you provide and establishing a contract with your customers to provide your service on an ongoing basis.
The Consumables Model
This model involves offering a subscription to a product that the customer needs to replenish on a regular basis.
The Peace Of Mind Model
This model involves selling an insurance premium to something your customer hopes they will never have to call upon.
Harvesting
The final step in our process involves harvesting, in other words realising the value of the company that you have created by implementing the previous steps. Building value is one achievement; persuading a buyer to hand over their money to you for the company is another challenge altogether. Selling your business is both science and art in that is blends both methodical planning and creative presentation.
Our approach to selling the business centres on crafting an engaging story. We provide a detailed, step-by-step guide through the sales journey, while helping you sidestep potential pitfalls that can unsettle even the most seasoned entrepreneurs.
We equip you with insights on appraising your business, timing your exit for optimal returns, locating potential buyers, and fostering competitive bidding amongst them. This positions you advantageously during negotiations, enabling you to secure a deal that exceeds expectations.
The Roadmap For Harvesting
Things To Consider Before You Start
Think of selling your business as a long, tough journey into the backcountry. You will encounter plenty of obstacles, but if you pack right, you’ll be fine.
Building Your Negotiating Leverage
Structuring a successful sale of your business is about maximizing your leverage, and nothing allows you to negotiate with more confidence than multiple bidders vying for your company.
Punching Above Your Weight
Selling your business can feel like a David-versus-Goliath battle. You may find yourself negotiating with a mercenary acquirer who makes a living from buying companies for less than they are worth.