"How dependent is your business on any one customer, supplier, or employee? Dependency makes for a bad business. Serve markets instead."
Adam Kreek
Founder Built for Hard
- Date
Eight Drivers of Enterprise Value
posted in Business Coaching
Adam Kreek
The Value Builder System (created by John Warrillow, author of Built to Sell) is built on 8 core drivers of company value. These are the levers that—when improved—tend to increase the multiple and overall attractiveness of a business:
- Financial Performance
– Your history of producing revenue and profit, plus the professionalism of your recordkeeping. - Growth Potential
– How well the business can grow in the future and how scalable the model is. - Switzerland Structure
– How dependent the business is on any one customer, supplier, or employee. (Named after Switzerland’s neutrality—avoid dependence on one side.) - Valuation Teeter-Totter
– The company’s working capital structure. Businesses that can grow without needing a lot of capital get higher valuations. - Recurring Revenue
– Predictable, contract-based, or subscription revenues that make future cash flows more reliable. - Monopoly Control
– How well differentiated the business is; whether you own a niche or have strong brand, IP, or positioning that competitors can’t easily copy. - Customer Satisfaction
– Measured often through Net Promoter Score (NPS). High satisfaction reduces churn and demonstrates value durability. - Hub & Spoke
– How dependent the business is on the owner. If the owner is the hub and all decisions/relationships spoke out from them, the business is worth less.
Read more about building value in your business here.
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Adam Kreek and his team are on a mission to positively impact organizational cultures and leaders who make things happen.
He authored the bestselling business book, The Responsibility Ethic: 12 Strategies Exceptional People Use to Do the Work and Make Success Happen.
Want to increase your leadership achievement? Learn more about Kreek’s coaching here.
Want to book a keynote that leaves a lasting impact? Learn more about Kreek’s live event service here.