We are lucky to have Lee Self as one of INCspire’s talented business facilitators, and I was glad to go through the class myself, and wanted to share some of the interesting highlights from her session on how to increase a business’s value by applying the lessons of the “Value Builder System.”
- First, a business that scores an 80 or higher on the value builder system will receive a 71% higher offer in an acquisition (multiple against earnings) — with the average multiple being 3.55x, and the multiple offered to business that score 80+ being 6.1x earnings.
- Second, of the 15,000,000 business in the United States, 85% require the owner to run them on a day-to-day basis. Growing your business’s value depends in part on making sure that your business isn’t dependent on any one person.
- Third, she explored the difference between a cost-driven business that focuses on creating a “lean” cost structure, and a value-driven model, that prioritizes value creation above cost minimization.
There were excellent questions from the CEOs around the table, we’re looking forward to the next session when Lee will be back again.
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