How Do I Build a Profitable, Valuable, and Sellable Business? – Part 2 of 12

Dr. Leilani Felix-Acosta  |  First Choice Business Brokers  |  KNOW Phoenix

5 Warning Signs Your Business May Not Be as Valuable as It Could Be

Why did you start your company?

The most valuable companies can operate without their owner’s everyday involvement. Is that true for your business?

We call this Hub & Spoke, one of the 8 Key Drivers of Company Value. This attribute provides insight into how dependent your business is on youmeasured by how your business would perform if you were unexpectedly unable to work for a period of three months.

Here’s a list of five warning signs that show your business could be too dependent on you:

1. You are the only signing authority

Most business owners give themselves final authority… all the time. But what happens if you’re away for a couple of days and an important supplier needs to be paid? Consider giving an employee signing authority for an amount you’re comfortable with, and then change the mailing address on your bank statements so they are mailed to your home (not the office). That way, you can review everything coming out of your account and make sure the privilege isn’t being abused.

2. Your revenue is flat when compared to last year’s

Flat revenue from one year to the next can be a sign you are a hub in a hubandspoke model. Like forcing water through a hose, you have only so much capacity. No matter how efficient you are, every business dependent on its owner reaches capacity at some point. Consider narrowing your product and service line by eliminating technically complex offers that require your personal involvement, and instead focus on selling fewer things to more people.

3. Your vacations don’t feel like vacations

If you spend your vacations dispatching orders from your phone, it’s time to cutthe tether. Start by taking a day or two off and seeing how your company does without you. Build systems for failure points. Work up to a point where you can take a few weeks off without affecting your business.

4. You know all of your customers by firstname

It’s good to have the pulse of your market but knowing every single customer by first name canbe a sign that you’re relying too heavily on your personal relationships being the glue that holds your business together. Consider replacing yourself asa rain maker by hiring a sales team, and as inefficient as it seems, have a trusted employee shadow you when you meet customers so that over time your customers get used to dealing with someone else.

5. You get cc’d on more than five emails a day

Employees, customers, and suppliers constantly cc’ing you on emails can be a sign that they are looking for your tacit approval or that you have not made it clear when you want to be involved in their work. Start by asking your employees to stop using the cc line in an email; ask them to add you to the “to” line if you really must be made aware of somethingand only if they need a specific action from you.

Curious to see how you’re doing on Hub & Spoke, along with the other seven drivers of a valuable business?

Maximize Your Business Value: Unlock the 8 Key Drivers of Company Value

Lynne Kimmich
More About Dr. Leilani Felix-Acosta


Dr. Leilani Felix-Acosta is a licensed business broker and certified M&A advisor who owns and operates First Choice Business Brokers in multiple locations. Leilani has a strong professional background, including a Doctor of Business Administration degree with an emphasis in eCommerce and a Master of Business Administration with a specialization in International Business. Leilani leads growing teams, she expertly guides business owners through maximizing the value of their business, planning and helping them exit, expanding their existing operations, or acquiring a business for the first time.