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Bbest Pr8 Areas for Driving Business Value: Attract & Retain Clients

on These Principles

Jeni Cantley, Practice Development Manager

Why Sellability Matters

“Those with a Sellability Score of 80

or more get offers that are 71% higher

than the average business”

Its all about Value and Running a Business that is Valuable to a Third Party – Not about the act of Selling:• Passing a valuable asset onto Family• Planning for the unforseen exit (Health or Financial)

The Opportunity

• 76% of business owners do not have a succession plan, of which many are planning to retire over the next 10 years

• Business owners should create a formal BSP 5-10 years prior to retirement

• Succession planning is complex and small business owners need help

As many as 70% of business owners plan to exit their business in the next 10 years, and the

most common exit plan is selling the business to

another company

Benefits

• Better First Meetings & Conversations

• Opportunity to asses their business – give it a Health Check

• Higher Quality Workshops and Presentations

• Better event Attendance & Engagement – Summary Review

• Expanding Referral Network

• Increase in Client Engagement

• Additional client touch point

• Providing access to additional tools and consulting

• It measures Accountability – Estimate of Value feature

• Prove your worth over the duration of your consulting

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Output ReportReport details the business’ measure on eight key drivers, with an explanation of why each attribute is important and suggestions for improving performance on each metric

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• Overall Score driven by a weighted algorithm made up of 40 questions in a total of 8 categories:

1. Financial Performance2. Growth Potential3. The Switzerland Structure4. The Valuation Teeter Totter (i.e. See Saw)5. The Hierarchy of Recurring Revenue6. The Monopoly Control7. Customer Satisfaction8. Hub & Spoke

Copyright, 2013. Built to Sell Inc

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How to interpret the report

• Score of less than 50: business owner must improve score or opt for an internal transition to a family member or employee(s) over time

• Score of 50-80: the business will likely sell for an industry average multiple*• Score of 80-100: the business will likely fetch a premium over industry average

multiples

*consult a database like “Pratts Stats” for average multiples by industry

Only 6% Score 80 or above

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Revenue & Quality of AccountingRisk & Reliability of Future Earnings

• Score of less than 50: a business with modest revenue that is either losing money or generating a small profit

• Score of 50-80: a profitable business • Score of 80-100: a large profitable business

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New OpportunitiesGeographyNew Products

• Score of less than 50: low future growth potential• Score of 50-80: modest future growth potential• Score of 80-100: lots of future growth opportunity

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Independence•From Employees•From Customers•From Suppliers

• Score of less than 50: heavily reliant on one customer, employee and/or supplier

• Score of 50-80: somewhat reliant on one customer, employee and/or supplier• Score of 80-100: not reliant on one customer, employee and/or supplier

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Cash Flow vs. Value of the Business (P&L)

• Score of less than 50: a business with a negative cash flow cycle constantly in need of cash

• Score of 50-80: a business with a neutral cash flow cycle – they pay out expenses at about the same time as they take cash in

• Score of 80-100: a business with a positive cash flow cycle that takes in cash at a faster rate than it pays it out

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How reliable the future stream of profits

• Score of less than 50: a business with little or no recurring revenue• Score of 50-80: a business with a moderate amount of recurring revenue• Score of 80-100: a business with a high proportion of recurring revenue

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Differentiation

• Score of less than 50: a business with commodity products and/or services with little or no control over pricing

• Score of 50-80: a business that has somewhat differentiated products and/or services yet occasionally must compete exclusively on price

• Score of 80-100: a business with highly differentiated products and/or services that rarely competes exclusively on price

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SurveyNet Promoter Score

• Score of less than 50: a business with no consistent methodology for measuring customer satisfaction and/or dissatisfied customers

• Score of 50-80: a business with satisfied customers• Score of 80-100: a business with both very satisfied customers and a

consistent methodology for measuring customer satisfaction

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Owner Dependence

• Score of less than 50: a business that is heavily reliant on its owner(s)• Score of 50-80: a business that is somewhat reliant on its owner(s)• Score of 80-100: a business that is not reliant on its owner(s)

The Hard Wired Process

• Standardized Process

• Before every Initial Consult or Meeting

• Its About Me – Not You

• Better Prepared for First Meeting

• Comparison to Physician: Health History

Success Indicators

Proactively inviting business owners

Presentations/Webinars

Consistently writing/promoting

Partnering

Using as Lead Qualifier

Conversion Rates

Proactively inviting business owners

8 out of 10 will fill out survey

Presentations/Webinars

1/3 fill out survey

122 reports, 1 in 3 turned into consults

Partnering

Referrals – 9 reports, 4 new clients

The Sellability Score

LinkedIN: Sellability Score Advisors Group

For marketing consult contact:Jeni Cantley, Practice Development [email protected] or Skype jenicantley.sellability

Join Us on LinkedIN

mailto:[email protected]