NCSG Business Value Questionnaire

The following questionnaire accompanies the December 2021 Coach's Corner Article on the topic of Exit Planning.

What is current annual Revenue?

• Over $2,000,000.00
• $1,000.00 t0 $2,000,000.00
• $750,000 to $1,000,000
• $500,000.00 to $750.000
• Less than $500,000

What best describes the amount of time Ownership spends working ON not IN the business?

• 90%+
• 76 – 90%
• 51 – 75%
• 26 – 50%
• 0 – 25%

What best describes how Ownership spends their time?

• Business Strategy, Sourcing Talent, Strategic Relationships, Learning & Growing as a Leader
• All of the above less one
• All of the above less two
• All of the above less three
• None of the above

How critical is Ownership to the success of the Business?

• Owner is passive.  Company has others in management roles. No single person has control of all key customer relationships.
• Owner is CEO and management runs day-to-day operations. No single person has all key customer relationships.
• Owner handles all customer relationships and management runs day-to-day operations.
• Owner runs operations and employees have customer relationships.
• Owner handles all operations and has all customer relationships.

What best describes who does Problem Solving and Driving Strategy?

• Employees solve their own problems and drive strategy. Owner is rarely involved.
• Employees solve their own problems and drive strategy often.
• Employees solve their own problems often, but ownership must drive strategy.
• Owner is typical problem solver and must drive strategy.
• Owner is typical problem solver and no real business strategy.

What best describes the depth of the management team?

• The loss of no single employee could materially affect the business and we “over-club” key positions.
• There are successors in place for most but not all key positions.
• There are successors in place for only a few key positions.
• There are no successors in place for key positions, but all positions are filled.
• There are no successors in place for key positions and there are key positions open.

 What best describes Measurement in the business?

• The business has clearly defined and managed metrics at all levels and Ownership has dashboard access.
• The business has clearly defined and managed metrics at all levels.
• The business has clearly defined but loosely managed metrics at all levels.
• The business has clearly defined but poorly managed metrics at some levels.
• The business has no clearly defined or managed metrics at any level.

What best describes the sales process?

• Management and salespeople do team selling, not typically ownership.
• Ownership, the management team and salespeople do team selling.
• Ownership and others do independent selling, but Ownership is not top salesperson.
• Ownership and others do independent selling, but Ownership is top salesperson.
• Ownership does all selling independently.

What best describes bookkeeping practices?

• We have an annual audit and nothing personal is “run” through the business.
• We have an annual review and nothing personal is “run” through the business.
• We have an external compilation and nothing personal is “run” through the business.
• We have an external compilation and personal items are “run” through the business.
• We have no audit, review or external compilation and personal items are “run” through the business.

What best describes the capital structure?

• We have adequate cash in the business and access to credit facilities.
• We have adequate cash in the business and pre-established lending relationships, but no credit facilities.
• We have adequate cash in the business.
• Cash is tight, but we have credit facilities.
• Cash is tight and no credit facilities.

What percentage of revenue is recurring revenue?

• 80% or more
• 60 – 80%
• 40 – 60%
• 20 – 40%
• Less than 20%

What percentage of revenue comes from 1 – 5 customers?

• 15% or less
• 15 – 25%
• 25 - 50%
• 50 – 75%
• 75% or more

Profit is the ROI on the business model. What is the return on the business in the form of ROI (profit) in the last tax year?

• 15% or above
• 10% to 15%
• 5% to 10%
• Less than 5%
• There was no profit beyond the owner’s salary

Standard Operating Systems (SOPS) are a requirement of any business for it to be scalable and replicable, what is your company status in regards SOPs

• We have systems in place for every facet of the business model and review these annually
• We have systems in place for our most important functions
• We have a few systems in place but need more
• We started SOPs but never really got this going
• What is an SOP again

 So, what did this tell you about the value of your business of your business to a potential buyer? Did you find that your role is too large a part of the company success that you affect the selling price?