The Drivers of Company Value
Happy Sunday!
I hope this note finds you well today...Possibly enjoying some downtime or starting to plan for the week.
I suspect, whatever you're doing, your business is not far from your mind. For some, this is a fine thing and you revel in thinking, reflecting, and strategizing and for others, I know there are concerns that weigh on you more than you would like.
And, perhaps you're starting to think about your future and what that would be like. You may be considering the next stage of your career or life, considering new hobbies, thinking about the next business to start, or reflecting on whether your business continues to take on a life of its own when you decide to step away.
Through supporting business owners to grow their companies in a way that maximizes their future exit options, I wanted to share the value drivers that will help you create a business that will provide you with whatever future options you may be considering.
Overall, there are 8 drivers of company value that contribute to whether your company will be easy to pass on or to sell in the future.
And, through focusing on these 8 drivers, your company will grow, so if you’re not looking to sell anytime soon, these drivers will offer you a roadmap to enjoy growth in the meantime.
The first driver I would love to talk about is Hub and Spoke. I wanted to start here because typically, almost every owner I’ve worked with has an opportunity in this area.
And, as you may have guessed by now, the Hub and Spoke driver is about how well your company operates without you. You know how well you would fare in the category if you think of the last time you took a vacation or a sick day. If it’s hard to be away for a day or up to a week, you know this is a category worthy of some attention.
If you’re able to take a vacation but still come back to several items that need your attention, you still have an opportunity.
Think about this - could you be away from your business for up to 3 months and still have it survive?
This is the type of autonomy we’re looking for here as a strong measure of how well your company can thrive without you.
This doesn’t always happen in one fell swoop, but with adjustments over months or years. But, at least you know, the more your company can run without you, the more valuable it is to someone else.
So how do you improve in this area?
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Strong processes
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Having a trained person (or people) in management or a leadership position(s), committed to the long-term success of the business.
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Empowered employee decision-making
It’s important to note that each driver doesn’t operate in a vacuum, meaning that if your company isn’t generating the revenue needed to hire or promote a quality team member, then, working on your service delivery and revenue/profit streams can be helpful in tandem with creating a stronger Hub and spoke focus.
If you’re ready to explore what making changes to your business could look like, then hit reply or send me a note at ariana@emergingoutcomes.com.
Tune in to this newsletter over the next few weeks to hear about all 8 drivers.
NOW is YOUR time.
Ariana
PS: If you’re curious about how your business stacks up in any of the 8 drivers, and you haven’t obtained your ValueBuilder score yet, then click here.