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7 Pillars of Value Creation
If you are looking for Business brokerage services and related consulting pertaining to business sales, mergers, acquisitions and business valuation, you've come to the right place!
It is our proprietary process focused on materially enhancing the current value of your family business as you get ready for the departing transaction because, as the video addresses, almost all Family businesses simply are not ready to go to market!
At least not without a meaningful amount of work to prepare them from a business run by a founder for 20 or 30 years to a new owner who will question the sustainability of the cash flow once you, the owner, have departed.
Why? Because A BUSINESS BUILT FOR LIFESTYLE, IS NOT A BUSINESS PREPARED FOR SALE!
But we can fix that. And in the course of doing so, MATERIALLY increase the value of the business.
The first step is to properly asses not only what your business is worth but to see how you score in the 7 key components that comprise the MULTIPLE.
Because, as you probably have learned by now, your Value is your EBITDA x Your Multiple, where your Multiple simply reflects the confidence a buyer has that EBITDA will be sustained, if not grow after you have departed. Your job is to reduce the RISK associated with your departure
For this process, we have created our proprietary process 'The 7 Pillars of Value Creation'.
The 7 Pillars of Value creation begins with a straightforward survey, where the algorithms behind it will not only suggest what your Multiple will likely be but will go even further into how you “scored” in each of the 7 key components of the Multiple.
Once you have this, we can overlay what the scores of a business of your size, in your industry would look like if it were ready to go to market and reasonably de-risked” as much of the challenges a new owner will have in maintaining and even growing the EBITDA. This is the equivalent of how a Buyer will measure you, and where you should/could be in each of the 7 components, and thus you have the beginnings of a plan.
In short, if you knew how to improve your Multiple by 1, 1.5, and possibly even 2x, the value a buyer will pay for your business will be vastly greater than it is today… even before growing the actual EBITDA!!!
Trying to build value any other way is trying to get out of a maze, blindfolded. It will not happen.
The 7 key components of a Multiple in which The 7 Pillars of Value Creation measure and aggregate to offer you an idea of the Multiple a buyer may use to value your business consist of:
1. Operational Irrelevancy
You are the owner. If you walk away, does everything run smoothly?
2. Standard Operating Procedures
Is there a manual that describes how everything gets done? And by whom?
3. Stay Bonuses
Do the key people have an incentive to stick around?
4. Deep Bench
Is there depth in needed staff and employees?
5. Recurring Revenue
How much of your top-line revenue is “automatically renewing” year after year?
6. Automating Sales & Customer Service
Do you use digital marketing and sales support software? How is the customer concentration mix? Do salespeople use tablets tracking inventory, pricing, job orders and RFPs? Is customer service automated?
7. Margin Management
Are you hitting acceptable industry appropriate Gross margins? Net Margins? Are they increasing or decreasing?
Learn how to actually improve on each of these components, driving to a higher multiple, let alone seeing EBITDA rise concurrently, and your business will command a significantly higher valuation than from where you began.
It all starts with the survey…
The 7 Pillars of Value Creation works alongside our Exit Valuation Survey. From the survey algorithms, we see your business' Multiple, and your score in each of the 7 components. This is what to expect a Buyer will see after performing their own due diligence, and how they will value your business (you still need to have your EBITDA determined, which we can help you with).
How It Works
It's time to face the truth. If you don't plan your exit correctly, you could end up working until you die. Your journey to a successful sale and increasing the value of your business by 30-50% starts with taking our Exit Valuation Survey. This tells us exactly where you are now, the exact performance of your business, and what you need to do to improve. You'll get your results immediately, plus you can access your Valuation Risk Snapshot and can speak to our analyst team on a complimentary call to discuss your results, increasing value and exit options.
TAKE THE SURVEY
Discover how your business scores in
the 7 key drivers of valuation
ACCESS RESULTS & ANALYST
Understand the risks a buyer sees
when valuing your specific business
INCREASE BUSINESS VALUE
Implement the "7 Pillars Of Value Creation" and increase your business value
© 2024 ETFB. All Rights Reserved
*The Lower Middle Market is comprised of businesses worth $5-$30 million, typically having EBITDA of $1 million - $4 million.
The 7 Pillars of Value Creation is our name for our work as Business brokerage services and related consulting pertaining to business sales, mergers, acquisitions and business valuation. Exit The Family Business the downloadable guide and any accompanying assets or affiliates are provided for informational and educational purposes only. It is not intended to provide tax, accounting or legal advice, nor is it an offer or solicitation to buy or sell, an endorsement or sponsorship of any company, security or fund. Certain owners, officers or affiliates may be associated with investment firms and may make referrals from time to time for such services, but this does not constitute investment advice, nor should it be construed as Exit The Family Business being in that business. We always suggest you seek professional advice. Past results are not a guarantee of future results.