John Warrillow founder of The Value Builder System and best-selling author talks to Nick about what it takes to build a value business for exit
He discusses the nuances that really make the difference to acquirers and why top-line revenue is important but only one of the metrics that make the difference when selling a business
This is a masterclass in understanding more about the elements that are valued by acquirers and how to effectively position your business when selling it
- We’ve moved away from the transaction model to the reoccurring business model and this is reflected in the valuations of companies
- Low debt and low-interest rates currently mean there will continue to be pressure upwards
- The Value Builder System is driven by eight unique metrics which are proven to be important to acquirers
- Top line revenue growth is important but there are other metrics that make a difference
- Most SME’s sell lots of things to a small number of people, the valuable SME’s sell a few things to lots of people
- Growth potential is important because it’s about what the company can become in the future
- The Switzerland structure is about the company not being dependent on a particular supplier or customer
- The point to sell a company is when you reach the freedom point. The desire for personal freedom and independence is a common underlying thread
- The reasons owners regret making a sale are focused around push factors such as illness, you need to offset your push factors with pull factors
- Pull factors are the things you want to do when you have exited the business
- When you have lots of pull factors valuation is not the dominant factor
- When an acquirer purchases a business they write two cheques, one to you and one to fund the working capital of the business
- Having a positive cash flow cycle is an important part of the picture when selling a business
‘We are part of the subscription economy now’
‘If you sell a few things to lots of people you can build a valuable company’
‘The acquirer is toeing the start line of their journey when you are looking to exit they are looking to grow’
‘Savvy sellers are thinking about the narrative of their company’
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BUILT TO SELL RESOURCES
ABOUT THE HOST
My name is Nick Bradley. I’m an entrepreneur, author, speaker, and investor. My background is in growing and scaling VC and Private Equity backed businesses.
Having successfully built, bought and sold a number of companies, and removed myself from day-to-day operations, my focus now is on helping entrepreneurs get to where they want to be, in business and in life. As well as investing in growth businesses and backing turnarounds – with the ultimate aim of creating value from significant capital events.
I’m passionate about personal and professional development – showing up and being the best version of myself … every day.
My bigger vision is to help bring entrepreneurial skills, experience and mindset to people in developing nations – so they can follow their dreams, live life more on their terms – utilising entrepreneurship as a global force for good.
Nick’s Facebook Page: https://scaleup.vip/FB
Nick’s LinkedIn: https://scaleup.vip/LI
Nick’s Instagram: https://scaleup.vip/IG
Scale Up Your Business website: www.suyb.global
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