8 Key Drivers of "Sellability"
- Financial Performance
- Know the Quality of the reporting of your Top Line Revenue and Bottom Line Profit
- Growth Potential
- Buyers are not buying past performance, they are buying your future stream of revenue and profits
- Switzerland Structure
- Independent of: concentrated customer set, any 1 employee, or on any one supplier
- Valuation "See-saw"
- At time of sale, the buyer is funding the purchase of the business AND the working capital needed to run the business
- To be more valuable, a business needs to be generating "faster" cash (faster receivables, slower supplier payments, etc)
- Hierarchy of Recurring Revenue (lowest to highest). The more you have the more value for your company
- Consumables
- Sunk money consumable
- Subscription revenue
- Sunk money subscription
- Auto-renewal in perpetuity until cancelled by customer
- Contract revenue to buy in the future
- Monopoly of Control
- Control over how you price your product or service
- Differentiated proposition: Market Dominating Position/ Unique Selling Proposition
- Customer Satisfaction
- Net promoter score - How likely will customers recommend you
- Hub & Spoke
- How dependent is your company on YOU?
- Upgrade your "YOU" Operating System to be less dependent on you!
- Written SOPs
