VALUE DRIVER NUMBER 3 OF 8: THE SWITZERLAND STRUCTURE

02.03.24 04:13 PM By John Kearney

VALUE DRIVER NUMBER 3 OF 8: THE SWITZERLAND STRUCTURE

Hello, this is Jack Kearney, Managing Director of Trinitas Business Valuations.

The SWITZERLAND STRUCTURE, the third value driver, gets its name from the country of Switzerland. If you know anything about the history of Switzerland, it is pretty amazing. The Swiss have a national obsession for independence and neutrality.  They remained neutral in both of the two world wars that surrounded them, they didn’t send troops to Iraq, they wouldn’t even join the United Nations until a public referendum of Swiss citizens supported joining the U.N.  It really goes to the idea that as a country, Switzerland is independent of any one faction or regime. Independence is also essential for building a more valuable and sellable company.  Independence of any one constituency. The three most important groups that you have got to make sure you are independent of are: Number 1. Customers – you can’t have an overly concentrated customer set, you have got to have a good diversification among your customer set. Number two, employees – you can’t be overly reliant on any one employee. Number Three, and this one is obviously not as intuitive as the others, you can’t be overly dependent on any single supplier, either.  Customers, Employees, and Suppliers:  you have got to be independent of any single or small group of customers, employees, or suppliers.  For a buyer coming in, they are going to look at your business, and if they see that you are overly dependent on any one of those constituencies, they are going to discount the value of the business because it involves more risk for them. So, to improve your score, you have really got to make sure that you have good diversification in your customers, make sure that you are not overly reliant on any one employee, and you have got diversification in your suppliers, too.  If you would like to learn more about your company’s independence from key customers, employees, or suppliers, go now to fill out The Value Builder Questionnaire™.  


The Value Builder System™ is a statistically proven methodology designed to increase the value of a privately held business. The Value Builder Score™ is an evaluation system driven by an algorithm that evaluates a business on the eight core value drivers that acquirers (investors or lenders) consider when buying (investing in or lending to) companies. The Value Builder Score™ gives a comprehensive assessment of the "Sellability" (“Investability” or Credit Worthiness) 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 71% 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™, such as Trinitas Business Valuations.  Click on one of the buttons below to discover whether you are ready to sell your business (The Value Builder Pre-Score™) or whether your business is ready to be sold for the best price, terms, & conditions (The Value Builder Score™). 

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