5. Value = Ability of the Business to
Dependably Generate Revenue and Profit
into the Future
Value = Ability of the Business to
Dependably Generate Revenue and Profit
into the Future
6. We can help determine the value but
more importantly identify the triggers to
Increase Your Value?
We can help determine the value but
more importantly identify the triggers to
Increase Your Value?
10. Quantify the ‘Intangible’ Drivers of Enterprise Value
Confidential & Proprietary 10
3. CoreValue assigns a CoreValue Rating Score from 0-100, a
measure of the strength of the operating asset (based on proprietary
CV algorithm)
1. CoreValue assigns a normalized trading range for a company
based on its industry (source: BVR and proprietary research)
2. Company completes a business assessment in 18 value
driver categories (source: Private Business Standards)
4. Based on the CoreValue Rating, CoreValue determines where
the company falls on the normalized curve, and with the company’s
financial data, calculates the estimated Enterprise Value (based on
proprietary CV algorithm)
12. Determines how strong, efficient, and durable the
business is - to generate future revenue and profit
13. See where your business is strong, where it is
weak, and how to make it worth more
Questions: If there were an X – Y chart that compared you to the competition, what would the X and Y be and where would you be on that chart or charts What are some of the road blocks to achieving full value for your company CoreValue is appealing to many types of business owners, in many different situations. Whatever the owner scenario or objective is (buy, sell, build, renovate or re-align key stakeholders) CoreValue provides a common, thorough, intuitive and vetted framework to get results and develop a path to move. Framing the product the right way, to fit the owner’s needs and “pain” is important. Probably the toughest one to deal with here is selling. It is estimated that at any one time 20% of private businesses are for sale. However, of those businesses put on the market with less than $50m in revenue, 80% do not sell; of those businesses over $50m in revenue, 65% do not sell. There are several reasons for this but a consistent theme is the value gap between the business owner’s expectations and those of the buyer or investor. The inflated value gap is sometimes an emotional barrier not easily dealt with. The sale process will be long, hard and emotional I am the business and if I sell, who am I Delaying the inevitable in the hope that a family member will take it over If I do sell, I will then need to deal with how to divide up the money
Start-ups Environmental products – had compelling technology, solved an important problem that most people were aware of. Three year plan to build up and sell out. Took that long to get the drivers in shape Early Stage Multi Media Content – never financed properly, was drip fed for a number of years until it died. The owners refused for to take into consideration all of the value drivers Scale up SaaS – Goal was to sell out to a strategic buyer. Worked on the key drivers for two years. Created competition. Chose final contender well. Energy and Environmental Management – never able to scale as the owner was not motivated to put the drivers in place. Energy commodity – was able to purchase for a very favourable price as none of the drivers were in place except for long term client contracts. Later Stage Custom Garment Manufacturer – Was able to acquire this company at a bargain as none of the drivers were in place except for long term client contracts Mechanical contractor – Understood their own business and the drivers very well, carefully acquired others, integrated well and built organically. Increased the top line by over 12 times in a decade while improving the bottom line. Architecture – Moved from a position of 20 years of marginal growth and fluctuating profitability to $2 million in the bank in about four years
Enterprise Value is a yardstick by which we help business owners understand, manage and monitor the intangible drivers behind their business, its ability to perform, be sustained, and ultimately transferred for the benefit of the owner, employees and their community. It is a current measure or indicator as to how the company will reliably perform.
Enterprise Value is a yardstick by which we help business owners understand, manage and monitor the intangible drivers behind their business, its ability to perform, be sustained, and ultimately transferred for the benefit of the owner, employees and their community. It is a current measure or indicator as to how the company will reliably perform.
Here’s the best part, it only takes 90 minutes to complete the CoreValue assessment. Simply said, CoreValue enables you to do in 90 mi nutes what used to take weeks or even months to accomplish at a fraction of the cost After completing an assessment with your business advisor, you will know where you are, why, and how to move forward to maximize the value in your company. The CoreValue Assessment is fast, dynamic, and powerful. In 90 minutes you will have completed: CLICK Pre-Due Diligence on your company– you will know where your business engine is strong and where it is weak You will know your numbers: CLICK Transferable Enterprise Value Your Potential Value Your Value Gap – or the difference between the two and Red Flags – serious issues that can negate all the value of your business no matter how big and profitable you are. CLICK And finally, with CoreValue you will have a roadmap to Improve Value
CoreValue is industry agnostic. Regardless of industry, questions are asked around each driver (and its components as the system breaks each driver down). Questions and available answers are in layman’s terms. This helps to engage, and not intimidate, owners. Level 1 is just a warm-up exercise, meant to get the client familiar with the CoreValue drivers, user interface, methodology and terminology. Level 2 asks dozens of additional questions, in order to give the application enough data to quantify results and generate several reports. Level 3 is all about further refinement and also qualifying/substantiating results with supporting documentation in the vault.
This slide provides a high-end view of how the algorithms work: steps 1-4
So in 90 minutes you can hold in your hands actionable and dynamic reports that you can use to measure your business or communicate with outside parties including your board or investors . This overview report summarizes your current estimate of enterprise value, your potential value and the Value Gap. Your CoreValue rating on a scale from 0-100 that quantifies the strength of your business engine. The value drivers that are the biggest contributors to your Value Gap Red flags that could negate all the value of your business. And as you make progress over time, we can track just how far you’ve come
Based on all inputs, CoreValue scores and graphically communicates the assessment results in an easy manner to understand. The overall score is the CoreValue Rating, which is used to calculate Enterprise Value and Gap. CoreValue also breaks out the different types of drivers: Market from Operational, and looks at each. Market drivers tend to explore the environment the company operates within, whereas the Operational drivers look at the environment within the company. Depending on a company’s results, it may be placed in a high risk or low risk category relative to other companies, which may (or may not) mean, it will have a hard time growing, selling, attracting capital, or even quality employees.
After Level 2 of the assessment has been completed, CoreValue has enough data to quantify results and generate several important, useful reports. The first level of reports is the overview level. Here we see the company’s industry, enterprise value, its potential value and the difference between the two is the value gap – or the money being left on the table due to prevailing conditions within the company. (We know what the potential value is because of the extensive research CoreValue conducts relative to normalized trading ranges.) The progress report allows us to see and track improvements, in a variety of key areas, over time. The critical drivers allow us to easily identify which driver are contributing most to the Value gap. Red flags are also identified. These are items, that if unattended to, can sap a lot or all of the enterprise value out of a company. For most overview reports, there are deeper, more detailed corresponding reports.
After Level 2 of the assessment has been completed, CoreValue suggests tasks that if completed, will close the value gap, improve Enterprise Value and encourage a better run company. Tasks may be sorted and prioritized in various ways: by score, value gap and bang-for-the buck. My Tasks will give clients and advisors the ability to create customized tasks to build Enterprise Value, and communicate within the application around tasks. CoreValue will suggest tasks based on the assessment results but advisors and clients may wish to enter custom tasks, or specific action items or tactics around a task. This will help all parties to become engaged around improving the company. Task highlights include the ability to: create specific, custom "To Do's“, capture notations pertinent to a tasks, set task due dates, prioritize tasks and track progress, and communicate with the advisor or client around a specific task.
Once Level 3 has been reached, users can store relevant and supporting documentation in their vault. You say you have sales objectives, or your industry is growing at a nice clip? Prove it by uploading qualifying documentation. The value is the one collective area where important supporting materials may be stored. Although only the owner and the advisor have access to the vault, the depository is seen as a valuable tool by other stakeholders such a board member, senior managers, valuation experts, capital professionals and potential buyers.