“Managers often fail to appreciate how profoundly the organisational climate can influence financial results. It can account for nearly one third of financial performance”. wrote Daniel Goleman nearly twenty yeras ago. in an excellent HBR article entitled Leadership that gets . . .
Why businesses sell for high values
(And why they don't)
If you had to sell your business today, would you get what you need?
Sadly, the cold, hard, depressing fact is most likely not, as...
...only one in five businesses listed for sale actually sell
...of those that sell, nineteen out of twenty owners are unhappy with the net proceeds they receive1.
Or, put another way:
Only 1% of owners who list their business for sale get the price they need (never mind want).
Why do so few owners get the rewards they deserve for the time invested and sacrifices made?
Failing to sell (or failing to get the target price) is usually caused by one of the Value Destroyers...
...Flatlining Growth - sales and/or profit growth is slow (or worse declining after adjusting for inflation and exchange rates) and free cashflow is weak
...Me-Too Positionning - there's no clear differentiation or competitive moat protecting the business, so they compete primarily on price
...No Team - buyers don't want to build a team to run their acquisition, so they look for engaged, high performing teams who hold themselves to account and drive the business forward
...High Risk - buyers value certainty, predictability and continuity - too many variables outside the business's control or a high dependency on the owner scares buyers off
We’ve seen businesses worth two to three times more than similar businesses in the same industry because of how they perform in those four areas!
So, how do you move ahead?
How do join the elite 1% who get what they want (and more) from the sale of their business?
How do you build and lead a business you can sell, on command, for a life-changing amount, without an earnout, despite tight credit conditions, rapacious acquirers or dire market conditions?
Read on to discover how...
The average business scores 59 and sells for 3.5x their pre-tax profits. Businesses scoring 90+ sell for 7.1 times pre-tax profits. More than double!
Introducing the Value Builder Score™
Data from the acquisition offers of over 80,000 businesses shows there are eight factors that significantly increase the value of a company.
Together these eight factors form the core of the Value Builder System™ - a complete and statistically proven methodology for building the value of your business.
The research shows that companies achieving a score of 80+ out of a possible 100 against the 8 drivers get offers 71% higher than the average company.
Scoring 90+ doubles the value versus the average company!
It's worth repeating that - improving your score from 58 to 90+ doubles the value of your company.
Even better, you’ll be able to sell whenever you want for the price you want.
But what if you’re not looking to sell soon? Or even sell at all? Why bother?
The Journey Becomes More Enjoyable
Owners experiencing any of the Value Destroyers are often working long hours, juggling umpteen tasks, and feel like they're never able to catch-up or get on top of things.
No matter how much sweat and brute force they apply, they stay stuck.
All the while wondering what the hell it's going to take to break free and get the control, growth, and freedom they want, so they can live the life they promised themselves when they started their business.
If that sounds like you, you're probably also feeling confused and overwhelmed, getting hammered on all sides with 'advisors' providing well-intentioned, but often misplaced advice.
I'm here to help you - to cut through all that racket and provide you with the strategy, methodologies, and tools to develop your leadership skills, deepen your knowledge, and scale your business.
Not only will I help you grow the value of your business and make it irresistable to your target buyer, I'll support you:
...drive profitable growth and increase your free cash flow
...build a leadership team that can efficiently handle the details, and implement your plans, procedures and processes to take your company to the next level
...hard-bake accountability into your business so things get done, when you want them done, in the way you expect them to be done
... manage and eliminate (forever) your business-related frustrations
Regardless of how tight the labour market is, how high inflation and interest rates go, or how dire market conditions become, I'll help you build the business you dream of, so you can live the life you promised yourself when you started your business, and ...
The Value Acceleration Framework™ improves business value by reducing business risk, delivering sustainable, profitable growth, and building an engaged team
You'll Be In Control Of Your Own Destiny
The other hallmark of a valuable company is it can run (mostly) without you. Giving you the option to hold on to it without the stress and hassle of being involved in day-to-day operations. And it’ll be in great shape should you wish to transition it to your family in the future.
Sadly, though, many owners don’t get to choose when they leave their companies. The dreaded Ds (Divorce, Death, Disagreement, Disease, or Disability) can force an unwanted sale.
Knowing you’ve built your business to sell means you can sleep well at night, safe in the knowledge that neither you or your family will lose out should one of the Dreaded Ds strike.
You'll Have A Winning Poker Hand
If you decide to sell your business, you'll be negotiating with serious players (a bit like an amateur finding themselves in a game at the World Poker championships).
Improving your score on each of the 8 value drivers stacks the cards in your favour...
... Your business becomes a sought-after asset, making it up to three times more likely you’ll get an unsolicited offer
... You can choose to sell immediately should you get an outlandish offer
... You have negotiating leverage from knowing the secrets of the game
... You won't have to complete an earnout (one of the most insidious tricks acquirers use to drive down your final payment)
Achieving a Value Builder Score of 90+ almost triples your chances of receiving an unsolicited offer for your business
Profits Have Grown Substantially
I didn’t feel we were achieving our full potential, What’s very pleasing is even though we’ve gone through a lot of change in the last 12 months, profits have grown substantially.
More importantly for me, the entire team are excited at our prospects and I have absolute belief we will start to take advantage of our opportunities and continue grow quickly and profitably.
MAnaging director & owner
An Amazing Impact
If you want help in making your business vision a reality and take your business to the next level, then I highly recommend you engage Richard to guide you through that journey.
Working with Richard to make these changes in our business has genuinely been one of the best things we've ever done. It has had an amazing impact on our focus and performance.
managing director & owner
A Lot of Clarity!
Over the course of a few sessions we defined the company vision, ten-year goal and the strategy for how we are going to get there.
The key thing was that while we started with looking at the long-term vision for the company this was eventually broken right down to a 1 year and first quarter plan which brought the vision to life. Vital!
Managing director & owner
A Marked Difference In Results
Working with Richard continues to expand my thinking to see greater opportunities ... even now in the midst of this crisis.
Working the issues through with Richard and really getting to grips with them gives me the confidence then to take them forward. This has led to growth, and reduced levels of agonising over key decisions.
managing director & owner
I'm Richard McMullan, Founder of Aurelius Advisory, a Certified Value Builder™, and creator of the Value Acceleration Framemwork™, my unique, proprietry system guaranteed to increase the value of any business.
Most SME business sales are facilitated by intermediaries such as business brokers or corporate financiers.
Going back to the poker game analogy, intermediaries advise you on how to make the most of the cards you bring to the table. And they’ll help you get a good price at that point in time.
My job is different.
My job is to get your business ready for sale BEFORE you go to a broker.
My job is to help you transform your business into an asset that delivers for you and gives you the freedom to choose what’s best for you.
My job, should you decide to sell, is to ensure you exit for the price you need with no regrets.
Having scaled businesses, bought businesses, failed to buy businesses, and as a Certified Value Builder, I understand what acquirers look for in businesses, I know how to leverage that knowlege to add signficant value to your business, and I provide independent, sales-angostic support during the sales process.
Here's the next step on your journey...
How can you get my help?
Whenever you're ready, here are four ways you can get my help to build and lead a fast-growing profitable business, that can run (mostly) without you, and be sold, on command, for a happy and lucrative exit…
1) Help yourself to my latest free "Ultimate Freedom" replay…
Give me just 44 minutes and I'll show you how to scale your company, improve its profitability AND reduce its reliance on you so you can being getting the freedom and rewards you deserve for having the guts to set up your own business…
2) Get your Value Driver Score and complimentary access to my Eight Drivers of Company Value course...
Discover how well your business scores on the 8 drivers of company value, and get complimentary access to my ten-step course revealing each driver, how it affects value, and ways to improve your score...
3) Want to exit soon?
Then join me and eight other savvy business owners in my "No-Regrets Exit" Bootcamp...
4) Building for the future? Then work with me privately...
If you want my hands-on help to build and lead a fast-growing, profitable business that can run (mostly) without you so you can sell it one day, on demand, and for a life-changing amount of money then send me an email, put PRIVATE MENTORING in the subject line, and tell me about your business and the problems you're facing, and we'll chat...
PS: There are a LOT of free resources in here
Within this website you’ll find content to help you build a more valuable and sellable business. Feel free to browse and discover for yourself.
I share the insights gained from building my own businesses to sell and from my advisory work with exceptional clients, and I extract the best bits from the books and podcasts I'm consuming.
Writing helps me consolidate my learnings so I can better help my clients (and it's my way of discovering what I don't know!).
Each article and video is full of practical advice on how to improve the returns from your business and improve your leadership skills.
There’s no catch. It's free. Sharing it here allows me to pay forward all the help and support I’ve received over the years, and enables those who can't afford my services to do it themselves.
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1 Source: The 2013 State Of Owner Readiness, The Exit Planning Institute.