BUSINESS VALUE BUILDING

Switzerland, as a country, prides itself on being independent. And in your case, independence is essential for building a sellable company. The three most important things in making sure your company is independent are:

• Customers
• Employees
• Suppliers

SVA will work with you to make sure your company isn’t overly reliant on any of the above items.

Having happy customers is important to any potential buyer as it is a good indication of the future health of the business. How do you quantify customer satisfaction? We’ll help you do that through the use of a Net Promoter Score (NPS) which is a tool that is used to gauge customer loyalty.

We’ll focus on two things in this area, your top line revenue and bottom line profit. In order to validate the numbers and properly assess your financial performance, it’s important that you have an audit performed.

A lot of business owners, when assessing the value of their business, tend to think about what they’ve done in the past. But if a buyer is to be interested in your business, they’re not buying your past performance, they’re buying your future potential. SVA will help you identify ways to scale out your business to ensure a healthy future.

How dependent is your company on you personally? The more dependent it is the less likely a buyer will want to purchase it. SVA will work with you on ways to empower the employees around you to keep the business moving before your eventual exit.

Does your business have the ability to control how you price your product? The ability to do this can only be achieved if the marketplace identifies your business as unique and different. This can be accomplished by how you market your business. SVA can assist by identifying the things that make your product different and whether or not customers will care.

Making sure your business has a recurring revenue stream is important as it signals to a buyer that there’s a strong financial future. There are six types of recurring revenue:

• Simple consumables revenue
• Sunk money consumables revenue­
• Subscriptions revenue
• Sunk money subscriptions revenue
• Auto-renewal subscriptions revenue
• Contract revenue

Typically, all businesses have one form of these currently in place, but they’re not all created equal. SVA will help you identify how you can improve your current recurring revenue model.

When a buyer decides to purchase your business, they have to write two checks. One of them for the purchase of the business and the other to fund working capital to keep the business functioning. Both of these checks must come from the same bank account.

What this means is that the more cash your business needs to operate, the less a buyer is going to be willing to pay for it. SVA will identify ways your business can generate more cash so that your buyer won’t have to contribute as much to working capital, thus putting more money in your pocket.