Methodically, Measurably, Maximizing Business Value
So glad you asked! We are an advisory, education and software company focused on strengthening US businesses. Our consulting services are a mix of in-house services or pairing business owners with our growing network of CVGAs and VOP practitioners.
Our proprietary software, the Value Opportunity Profile (VOP), is a powerful tool designed to evaluate and grow a company’s intrinsic value.
Our Certified Value Growth Advisor (CVGA) education program focuses on the fundamentals of business, equipping industry professionals to offer higher levels of support to clients and become their client’s most trusted advisor.
Lastly, we cultivate an online community of CVGAs, VOP practitioners and other professionals to share insights, resources and lessons learned to meet the needs of US business owners.
Most people talk about transaction value which is not determined until the sale of a business is complete. We hear numbers and multiples used leading up to a sale, but we do not hear clear guidance on how best to position a business for desirable terms beyond cleaning up the financials.
Intrinsic value is something a business owner can control.
As a business owner, you always want to be operating at peak performance, but more importantly, you need to understand how buyers see your company. If you are at the highest intrinsic value you can achieve, your options to exit are widened to include financial buyers, strategic buyers, or individual operators. You will have more buyer competition and will achieve high transaction value wherever transaction values are currently at in the marketplace.
It is a transformative process starting with the company’s management/leadership team. Together they discover how differently each perceives the strengths and weaknesses of the company. By the end, companies are more disciplined, focused, and aligned in terms of where they are going and how they are going to get there. Results show companies often position themselves differently in the marketplace, grow faster, gain margin & profit expansion and meaningfully increase their value.
It all starts with an initial assessment with the company's leadership/management team to determine the current state of the company. Typically, this process is facilitated by a VOP practitioner. The company also provides a financial template with summary level historical and projected financial information.
Upon completion, a comprehensive report is generated and includes recommendations targeted at reducing major pain points and focuses on bringing the company into balance.
The next phase is the strategic planning process to bridge from the current state to the desired future state. The company's leadership team meets again with the VOP practitioner or recommended CVGA to develop the roadmap and set the company up for success.
The VOP has 3 tiers.
The lightest tier, Essential (companies < $5M in revenue), take approximately 30 minutes to 2 hours to facilitate with the owner and their management team.
The highest tier, Accelerator (companies > $15M in revenue), typically take a full day (8 hours including breaks) to facilitate with the owner and their management team.
The middle tier, Growth (companies between $5-$15M in revenue), fall somewhere in between.
The process varies; however, our standard process is 12 half-day sessions with a management team spread over six months.
We evaluate strategic frameworks including: whether the company should develop new markets for their existing services, new services for their existing markets, or a combination of new markets and new services; review how the company positions themselves in the market; determine how they connect with customers (i.e. cost leader, service leader, innovator).
Together with the management/leadership team, we determine the most appropriate strategic frameworks for the company and discuss how to structure the company around those frameworks.
Whatever the company selects has downstream implications on the way they organize and structure their company, the type of people they recruit, how they train and retain talent, the systems that they use, and so forth.
We advise owners to run their company as though they are never going to sell. We recommend running at the highest level of quality and the highest performance possible. If they do that, they will always be positioned to entertain opportunities that arise whether they are joint ventures, new investors, handing down to the next generation or selling to management. Always run the company at peak performance to maximize opportunities and be prepared to act.
We would be delighted to explore how Corporate Value Metrics can support your company’s goals. Click the “Get Started” button at the top of the screen to get in touch.
It is a software consulting platform designed to double or triple a company's value over three to five years. Through a holistic approach, it enables advisors to identify company strengths and weaknesses, measure the baseline value, diagnose risk and quality value across the entire enterprise. The software generates a roadmap to improve quality and increase company value. It combines a qualitative assessment, a financial valuation module and a robust what-if analysis tool to produce a comprehensive reporting package to help advisors generate and manage long-term engagements.
Obviously, CVM uses the software! However, we have licensing agreements with large national advisory firms all the way down to single person consulting firms. Many types of professionals including turnaround consultants, M&A advisors, wealth managers, business valuators, CPAs, exit planners, etc. license the software and use our proven process.
The VOP uses an income approach for valuation and calculates a discount rate through the build-up method. The software is unique in the way it calculates the discount rate because the qualitative assessment is linked to the build-up method. This means the quality of the company and assessment responses are directly tied to the company-specific risk (CSR). We look at the future cash flows and the value of those future cash flows based on the current risk and quality profile of the company. The higher the quality, the higher the value of future cash flows because they are more predictable and sustainable.
The best companies operate with sustainability, predictability, and transferability of value. They institutionalize knowledge and expertise into the organization allowing the company to run independently of the owner.
Imagine a crane reaching into a company, lifting out the current owner and swapping them out for an independent operator who does not know the business well. What is the value of the company if the expertise is not retained?
The VOP software measures 47 qualitative elements of a company across the entire enterprise and how well the knowledge and expertise has been institutionalized.
In the “Planning” category, one of the subcategories is called Business Plan. The first question might be, "On a scale of 0 to 10 does the company have a fully developed written strategic business plan?"
10 means the company has a fully developed and written strategic plan which covers all the functional areas of the company. 0 means there is no written plan at all.
Throughout the process we educate the business owner and/or management/leadership team how the scoring works. It does not take long for them to understand the rating system and advisors can always provide guidance to help calibrate their answers.
Each of the 8 primary categories have equal weight in our overall scoring criteria, and their subcategories have equal weight in their respective categories. The qualitative assessment responses roll up into the discount rate that is used in the valuation. We use the published best practices by major industry category (manufacturing, professional services, distribution, and a broad category we call general industries) which are rolled into our assessment criteria. If there are 50 possible points for a subcategory and they score a 7 out of 50, that subcategory receives a 14% score. The subcategory scores roll into the primary categories with equal weighting.
#1. The 47 sub-categories are each assigned a priority level: one, two, or three. These levels are pre-assigned and do not change from company to company.
Level 1 priority: Protect the company from downside exposure.
Example: Does the company have a full insurance package in place and reviewed?
Level 2 priority: Enhance the quality of existing core operations. Implementing these initiatives will help to maximize the company’s value for its current size and market position.
Example: The company’s IT system. It may not be mission-critical right now, but they could become more efficient if they implemented or updated the system.
Level 3 priority: To position the company for successful growth. Level 3 initiatives should be prioritized after Levels 1 and 2 have been optimized.
Example: Create a board of directors. If the Company does not aspire to significant growth, it may choose to focus only on Level 1 and 2 initiatives.
#2. Focus efforts first on the categories with the highest risk and lowest quality scores.
A software subscription provides access to the Value Opportunity Profile (VOP) software and access to our online community with training videos, sharing of best practices, tools, templates, and collaboration with other VOP practitioners.
Upon signing up, our team takes you through an onboarding process to make sure you know how to use the system and will review your first profile if desired. Our online community is available to network with other practitioners, share best industry practices, receive feedback on live cases, or get support on the VOP itself.
Our training videos cover in-depth each section of the VOP. You will learn how to frame the initial conversation with business owners, how to walk their team through the assessment, how to navigate the financial data, how to analyze the results and outputs, where to view the findings, how to produce and edit the reports, how to create scenarios and how to close the value gap through a strategic planning process.
The VOP System includes a Qualitative Assessment (Questionnaire), Financial Data Inputs, Risk and Quality Scores (across 8 categories and 47 subcategories), an Intrinsic Value Calculation, the Value Opportunity (shows what a company could be worth), Auto-Populated Recommendations (based on the quality scores for each subcategory), Scenario Planning (shows the value impact of qualitative improvements), and multiple reporting functions allowing advisors to organize data into presentable documents.
The VOP is currently a stand-alone platform on the cloud. It does not integrate with any outside platforms at the moment.
EOS and VOP are not substitutes or alternatives for each other and are not competitive products.
Essentially, EOS (from the book Traction) is a day-to-day management operating system. It is a way to manage an organization around a set of objectives and maintain focus and accountability. The EOS is not a diagnostic, strategic, or valuation system and, therefore, it relies on a company having a well-developed plan with appropriate objectives to execute. EOS can give clarity on how to run your business with your meetings and vision, but it does not measure value. With EOS, a company could implement ideas not aligned with a full strategic plan or have a way to measure the return of those strategies.
The VOP and strategic planning process can be complementary to EOS by injecting objectivity into the development of "Rocks", versus companies developing their own "Rocks" based on their comfort zones and what they like to work on. The VOP shines a light on weaknessess and encourages companies to address them as part of their long-term roadmap.
The Exit Planning certifications focus on the business owner rather than the business value. It helps answer important questions like, what does the owner need to retire personally, emotionally, financially? What are their current exit options? How can the Exit Planner support them to an exit, etc.?
The CVGA focuses on the business itself. What is the current state of the business (strengths, weaknesses and current intrinsic value) and guiding the company to achieve its goals (growth, sale, operational excellence).
We teach the skills and framework to implement a roadmap to maximize business value. Advisors who have been through Exit Planning programs tell us other programs teach "the what" while the CVGA program teaches "the how".
M&A training is all about the transaction. However, if a company isn’t ready to transact, what education does the advisor have to create business value and successfully bring the company back to market?
The CVGA program teaches a process to make companies transaction ready. The process is focused on creating a balanced company across 8 functional categories. By identifying and reducing risks and weaknesses, the advisor guides the company to increase their intrinsic value and likelihood of a successful transaction.
The CVGA program cost is $6,250.
The cost to renew and keep the CVGA license is $495 (this cost is included in the VOP software renewal).
We require 40 hours of continuing education credits per year. Credits that apply to your CPA, CEPA, CM&AA, CFP, and other designations typically apply to the CVGA continuing education hours.