At Redcap&Truss, we are constantly trying to find new ways to add value to our clients. Over the course of the next few months you will see some changes to our team and our website. Most notably, we are going to be introducing The Value Builder System™ as an offering to our clients. 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.
As an introduction to the system – we wanted to ask a personal question. When was the last time you had your blood pressure tested?
Taking your blood pressure is one of the first things most doctors do before treating you for just about anything. How much pressure your blood is under as it courses through your veins is a reliable indicator of your overall health; and it can be an early indicator of everything from heart disease to bad circulation.
Does it tell the doctor everything they need to know about your health? Of course not, but one powerful little ratio can give the doctor a pretty good sense of your overall wellbeing.
Likewise, your Value Builder Score can be a handy indicator of your company’s wellbeing. Like your blood pressure reading, your company’s Value Builder Score is an amalgam of a number of different factors and can help a professional quickly diagnose your company’s overall health.
Predicting Good Outcomes Too
When a doctor takes your blood pressure, they not only rule out possible nasty ailments; they can also use the pressure reading to forecast a healthy life ahead. Similarly, your Value Builder Score can predict good things for the future. For example, based on more than 10,000 business owners who have completed their Value Builder Score questionnaire, we know the average multiple of pre-tax profit they are offered for their business when it is time to sell is 3.7. By contrast, those companies that have achieved a Value Builder Score of 80+ are getting offers of 6.6 times pre-tax profit.
In other words, if you have an average-performing business turning out $2,000,000 in pre-tax profit, it is likely worth around $7,400,000 ($2,000,000 x 3.7). If the same company improved its Value Builder Score to 80+ while maintaining its profitability of $2,000,000, it would be worth closer to $13,200,000 ($2,000,000 x 6.6).
Are you guaranteed to fetch 6.6 times pre-tax profit if you improve your Value Builder Score to 80? Of course not. But just like blood pressure, one little number can tell you and your advisor a whole lot about how well you are doing; and your advisor can then prescribe an action plan to start maximizing your company’s health – and its value down the road.
Heart disease is called “The Silent Killer” because most people have no idea what their blood pressure is. People can walk around for years with dangerously high blood pressure because they haven’t bothered to get it tested. The first step on the road to health is to get tested. If you have a great score, you can sleep well at night knowing you have one less thing to worry about. If your score is not where it should be, then at least knowing your performance can get you started down the road to better health.
If you’re interested in getting your Value Builder Score, please visit <https://score.valuebuildersystem.com/redcap-and-truss/chris-beaton>.