the formula · copyright © 2017 built to sell inc. owner of the customer relationship “what...
TRANSCRIPT
![Page 1: THE FORMULA · Copyright © 2017 Built to Sell Inc. Owner Of The Customer Relationship “What multiple of your earnings did the offer represent?”](https://reader033.vdocuments.mx/reader033/viewer/2022050518/5fa20461382fe97fef792682/html5/thumbnails/1.jpg)
Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
THE FORMULA: 5 SURPRISING WAYS TO BOOST THE VALUE OF A BUSINESS
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
THIS IS STEPHANIESHE SOLD HER
$9 MILLION COMPANY…
…FOR $54 MILLION
Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
![Page 3: THE FORMULA · Copyright © 2017 Built to Sell Inc. Owner Of The Customer Relationship “What multiple of your earnings did the offer represent?”](https://reader033.vdocuments.mx/reader033/viewer/2022050518/5fa20461382fe97fef792682/html5/thumbnails/3.jpg)
Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
3.76
2.76
3.59
4.17
5.10
6.27
0 1 2 3 4 5 6 7
Average multiple
Score: less than 50
Score: 50 - 60
Score: 60 - 70
Score: 70 - 80
Score: 80+
Company Value Builder ScoreBy Offer Multiple“What multiple of your earnings did the offer represent?”
Com
parin
g av
erag
e m
ultip
le o
ffere
d
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Multiple Goes Up In Lock Step With Size“What multiple of your earnings did the offer represent?”
Com
parin
g av
erag
e m
ultip
le o
ffere
d
3.76
2.86
3.67
4.42
5.10
0 1 2 3 4 5 6
Average multiple
< $1M
$1M - $3M
$3M - $10M
$10M +
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Copyright © 2017 Built to Sell Inc./ www.ValueBuilder.com
MONOPOLY CONTROL
![Page 6: THE FORMULA · Copyright © 2017 Built to Sell Inc. Owner Of The Customer Relationship “What multiple of your earnings did the offer represent?”](https://reader033.vdocuments.mx/reader033/viewer/2022050518/5fa20461382fe97fef792682/html5/thumbnails/6.jpg)
Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Copyright © 2017 Built to Sell Inc./ www.ValueBuilder.com
“What multiple of your earnings did the offer represent?”
Com
parin
g av
erag
e m
ultip
le o
ffere
dCompanies With a Monopoly In Their Market Get 50% Higher Offers
3.76
5.43
0 1 2 3 4 5 6
Average multiple
Have Monopoly - all regions
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
SELL MORE STUFF TO PARENTS
FIND MORE PARENTS WITH A NANNY
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
LESSON #1: SELL LESS STUFF TO MORE PEOPLE
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
How Likely Are Your Customers To Recommend You?
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Copyright © 2017 Built to Sell Inc./ www.ValueBuilder.com
100
200
300
400
500
0 5 10 15 20
Average
Loyalty LeaderGro
wth
(ind
exed
)
Net Promoter® and NPS® are registered trademarks, and Net Promoter Score and Net Promoter System are trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld. © 1996-2013. Bain & CompanyYears
Customer Promoters Drive Value
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Calculating Your Net Promoter Score
% of Promoters :
% of Passives :
% of Detractors :
20%Net Promoter Score :
25%
70%
5%
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Copyright © 2017 Built to Sell Inc./ www.ValueBuilder.com
ONBOARDING TEAM LED TO 78%
NPS SCORE
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Lesson #2: Strive For 50% + Net Promoter Score
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Copyright © 2017 Built to Sell Inc./ www.ValueBuilder.com
“What multiple of your earnings did the offer represent?”
Com
parin
g av
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e m
ultip
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dCompanies With 75%+ Recurring Revenue Get Much Better Offers
3.76
5.89
0 1 2 3 4 5 6 7
Average multiple
75% + recurring revenue
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Copyright © 2017 Built to Sell Inc./ www.ValueBuilder.com
$9 MILLION IN REVENUE: 100%
RECURRING
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Lesson #3: Create Recurring Revenue Streams
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Owner Of The Customer Relationship“What multiple of your earnings did the offer represent?”
3.76
2.92
3.41
3.95
4.54
2 3 4 5
Average multiple
I know each of my customers by first name
I know most of my customers by first name and they usually want todeal with me rather than one of my employees.
I know some of my customers by first name
I don’t know my customers personally and rarely get involved in serving an individual customer
COMPARING AVERAGE MULTIPLE OFFERED
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Copyright © 2017 Built to Sell Inc./ www.ValueBuilder.com
LARGEST CUSTOMER <1%
OF REVENUE
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Lesson #4: Reduce Reliance on Customers, Employees and Suppliers
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
GROWTH POTENTIAL
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Copyright © 2017 Built to Sell Inc./ www.ValueBuilder.com
3.76
2.94
3.69
3.73
3.98
4.56
0 1 2 3 4 5
Average multiple
Impossible
Very Difficult
Fairly Easy
Fairly Difficult
Very Easy
COMPARING AVERAGE MULTIPLE OFFERED
How Easy Would It BeTo Accommodate 5 X Demand?
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Copyright © 2017 Built to Sell Inc./ www.ValueBuilder.com
GROWING AT 17%
PER YEAR
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
Lesson #5: Find An Acquirer you can help grow
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Copyright © 2017 Built to Sell Inc.www.ValueBuilder.com
1
SELL LESS STUFF TO MORE PEOPLE
STRIVE FOR 50% + NET PROMOTER SCORE
CREATE RECURRING REVENUE STREAMS
REDUCE RELIANCE ON CUSTOMERS,
EMPLOYEES & SUPPLIERS
FIND AN ACQUIRER YOU CAN HELP GROW
Five Keys To A Lucrative Exit
$2 3 5 EXIT
4