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company valuation

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9 Min Read

How To Survive Long-Term Business Ownership And Increase Valuation

Can Your Business Survive For 10 Years Or More?

Business survival timelines are calculated from valuation scores that are based on 10 year increments of expected rates of return.

There are no absolute business survival timelines, as there are no guarantees that a buyer will pay the exact amount of your valuation. These valuations are based on multiples of EDIT or EBITDA, plus or minus 7 risk factors.

The lower the risk, the higher the price – the higher the risk, the lower the price – because the risk factors are all based on a minimum of 10 years of sustainable profit.

How To Get A Simple Business Valuation

Meet Value Builder. The Value Builder System™ is a statistically proven methodology designed to improve the value of a privately held business. At the core of the system is The Value Builder Score™, an evaluation system driven by an algorithm that evaluates a business on the eight core value drivers acquirers take into consideration when buying companies.

 

The Value Builder Score™ gives a comprehensive assessment of the "Sellability" of your business, whether you want to sell next year or just to know that you're building a valuable asset for the future.  After analyzing more than 52,000+ businesses, analysts at The Value Builder System™ have discovered that companies with a Value Builder Score of 90+ received offers that are 7.1 times higher than the average-scoring business.

The Value Builder System™ is available exclusively through an experienced and authorized group of advisors, known as Certified Value Builders™, located across the globe.  I am a Certified Value Builder™

Click Here If You Are Ready To See What Your Business Is Worth Today...

What Do The Scores Mean? 

If you have a Value Builder score of 80% to 100%, that means your business has an 80% to 100% chance of profitability for another 10 years. A score of 60% to 79% indicates a 60% to 79% chance of profitability for another 10 years.

Likewise, as your Value Builder score diminishes to 50%, 40%, 30% or lower, your profitability also matches that downward trend. Therefore, it stands to reason that if you plan on keeping your business profitable for another 10 years, you absolutely need to obtain a score of 80% or more.

How Do I Increase My Value Builder Score and In Turn The Value Of My Company? 

In order to increase the scores of each of the 8 drivers of company value we prioritize action plans that focus attention on increasing those scores as quickly as possible. In the process, the Owners and key employees learn to think like entrepreneurs.

Entrepreneur vs. Technician

Most owners think like technicians and work in the business as a manager, over-seeing how the business is doing. Their technical expertise is likely what got them into the business to begin with but continuing to run the business as a technician is a problem.

Entrepreneurial thinking creates new opportunities, frees up time, increases financial performance, and retains good employees. The result is significant increases in equity to show for the owner’s training investment. 

Entrepreneurial Thinking Leads To Higher Valuations

The entrepreneurial thinking owner creates a business that can run without them having to work in the day-to-day operations and could be sold for 6 to 16 times earnings. The results for both types of owners in both cases are predictable. The statistics are that 90% of businesses cannot be sold and won’t be as profitable out another ten years.

Entrepreneurial Run Business Makes 10+ Year Survivability More Likely 

An entrepreneurial run business can survive indefinitely or can be sold for 6 to 16 times earnings – what a difference! Ninety percent of businesses eventually liquidate, leaving the owner with only the money they earned working in the business. The end result is the technician/manager owner has accumulated debt, the business depends on the owner, and the owner has little equity to show for the investment of the their time.

It Takes A Team, Plus An Entrepreneurial Minded Leader

Once people learn how to develop all the procedures into training tools to teach others, the business runs better from both the bottom up and the top down. The skill of the entrepreneur is not a natural skill, it requires training tools. Some owners don’t want to learn, so they don’t qualify.

But, those that do, begin to see results for their efforts sooner. Results may not occur right away, but do occur over time. There are still fires to put out and problems to solve. But over time, the fires stop and the problems become less important as employees follow systems and are trained to perform at higher levels. 

The essential by-products are: the work gets done more efficiently; employees get motivated; and there is viable evidence the business is more sustainable, with higher business valuations! Why? Because progress is measured frequently, so results are proven.

Because entrepreneurial owners and employees are getting more qualified sales, capacities increase because people do not leave and net profit increases dramatically over the next 10 years; because people are better trained than they are now.

An Entreprenuerial Leader Can't Do It Alone...The Value Of An Outsider

At ProfitPro, we have developed training and coaching skills to train owners along with employees to think creatively, like an inventor – this is a process of discovery.

There is no doubt work still has to be done, but, by giving people time to develop systems innovation knowledge, to be creative, something profound happens, they get more passionate about their work.

Having an Outsider like ProfitPro and Gary Holt, makes it possible to get to the benefits of the Entrepreneurial mindset sooner.  By getting their sooner, you will see results faster.  You can do it alone, but if you could do it, why haven't you yet?  

Hire Gary Holt and ProfitPro To Teach You Entrepreneurial Mindset. 

Click Here To Book A Call With Gary Holt

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