Creating A Vehicle for Greater EV? .... A New Recipe for Owner Payout.
IN THIS ISSUE:
A Recipe to Get More For Your Business
520 words – Total reading time less than 3 minutes
Attention: CI Owners
To be considered by any outside investor, lender, or strategic partner you need to count right. Most CI’s don't. See an earlier coffee: Why Not Do It Right? On your own, as a single entity, you might be able to get 30-40% of your annual revenue as a potential payout. Typically to someone who wants your job. Often there would be debt financing involved. Maximizing EV (enterprise value) – 3X to 4X more than you could realize on your own – requires a vehicle capable of ultimately creating a national CI company serving thousands of clients across 100 locations. We’ve been building that vehicle for the past 2-1/2 years, helping independent companies become part of a much larger “virtual company” called bravas. At this point, we have a good feel for what it will take to bring this deal home:
Standardized financials and admin process
Metrics to drive improvement
Preparing companies for life after the sale
Having a buyer capable of growing a larger network of locally-run businesses§ Ha
Thru training and coaching of its members, Vital is, in effect, the finishing school for companies wanting to maximize EV and create a liquidity option. It's a perpetuating model: owners continue to work in the business and reap the highest return on their time and talent; leaving a sustainable business to their employees and new investors. It's also a BIG vision. And it’s happening… We are close to engaging the company that will take our first round of dealers to market. To engage and pursue this option you need not bet your company. But you do need to understand it fully; you need to talk to us. Here are the ten items you can expect to be prescribed:
Standardize your QB set-up to the VITAL spec
Standardize revenue recognition, balance sheet items, progress billing and cash mgmt.
Use proven metrics to drive improvement
Use monthly coaching to speed improvement
Take actions to have your company viewed as purchasable
Liquidate part of your company's value
Become part of a bigger enterprise
Continue to drive EV higher by growing and refining
Select the best option for you for long term liquidity and returns
Build a succession legacy in 3 to 10 years to allow your graceful exit
The good news is, you can choose the path, cost and timing of this. You can start slowly, with an investment of just $4600 in year one to get thru the first three items above. Or, you can choose to fast-track your company into an earlier sale (thru step 6), at a total pre-sale cost of about $50,000. Either way, consider that most companies see a $5k/month bottom line improvement within months, and some have seen gains approaching $50k/month. Our system works! Please note that none of our programs presume or require you to sell. That is an option of our highest-level program.
If you are looking to shape up your business or position it for future sale consider Vital MGMT and what we can do for you.