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For many entrepreneurs, launching a business is a deeply personal journey. It begins with a vision, a spark of innovation, and the relentless drive to bring something new into the world. But as the business grows, so does the complexity of leadership. The transition from founder to CEO is not just a change in title – it’s a fundamental shift in mindset, responsibilities, and strategic focus.

Here’s what it takes to make the leap successfully – and why it’s essential for unlocking long-term business value.

The Founder’s Mindset: Passion, Hustle, and Hands-On Leadership

Founders are often jacks-of-all-trades. In the early stages, they wear multiple hats – salesperson, product developer, marketer, and customer service rep. Their leadership style is intuitive, reactive, and deeply involved in day-to-day operations. This hands-on approach is vital for survival in the startup phase, but it can become a bottleneck as the business scales.

The CEO’s Mindset: Strategy, Structure, and Scalable Leadership

The CEO role demands a different kind of leadership – one that’s focused on building systems, empowering teams, and driving strategic growth. CEOs must shift from doing to directing, from reacting to anticipating, and from controlling to trusting. 

Why the Leap Matters

Making the leap from founder to CEO isn’t just about personal growth – it’s about business transformation. At Rizolve Partners, we’ve seen firsthand how this shift impacts valuation, scalability, and exit readiness. Here’s why it matters:

• Unlocking Business Value

Investors and acquirers look for businesses that are not dependent on the founder. A company with strong leadership, systems, and governance is far more attractive – and valuable. Transitioning to a CEO mindset helps demonstrate that performance is repeatable and scalable, which is essential for maximizing equity value.

• Preparing for Exit or Succession

Whether you’re planning to sell, pass the business to the next generation, or bring in external leadership, the founder-to-CEO transition is a critical step. It ensures the business can thrive without you, making it more resilient and transition ready.

• Reducing Burnout and Bottlenecks

Founders who stay too involved in every detail often experience burnout. They also become bottlenecks, slowing down decision-making and growth. CEOs build teams and systems that allow the business to run smoothly – without constant intervention.

Common Challenges in the Transition

The leap isn’t easy. Here are some common hurdles founders face:

• Letting Go
• Imposter Syndrome
• Cultural Shifts
• Skill Gaps

Key Shifts to Embrace

To successfully evolve from founder to CEO, here are five key shifts to embrace:

• From Control to Trust:  Empower your team to make decisions. Build a leadership bench that shares your vision and can execute independently.

• From Intuition to Data:  Use metrics and KPIs to guide decisions. CEOs rely on dashboards, forecasts, and performance data to lead effectively.

• From Hustle to Strategy:  Shift your focus from daily firefighting to long-term planning. Develop strategic initiatives that drive sustainable growth.

• From Identity to Legacy:  Separate your personal identity from the business. Build a company that can thrive without you, creating a legacy that lasts.

• From Founder to Builder of Value:  Think like an investor. Focus on building equity value through systems, scalability, and leadership – not just revenue.

Did You Know?

Making the leap from founder to CEO is a pivotal moment in a business’s evolution.  Here are some key statistics:

• 76% of Canadian business owners plan to exit within the next decade, yet only 9% have a formal written succession plan (CFIB Media Release Jan 2023), underscoring the urgency of preparing for leadership transitions.
• Average CEO tenure in Canada is seven years, offering a benchmark for founders considering their long-term leadership trajectory (Southlea Group).
• Founder-led companies tend to outperform professionally-led firms in innovation and long-term value creation, especially when founders remain involved in strategic roles (Bain & Company).

How Rizolve Partners Helps Founders Become CEOs

We specialize in helping business owners make this transition with confidence through:

• Clarity and Roadmapping 
• Leadership Development 
• Operational Systems 
• Value Building 
• Succession and Exit Planning

Common Questions

Q:  How do I know if I’m ready to become a CEO?
If you’re spending more time in the weeds than on strategy, and your business is growing beyond your ability to manage every detail, it’s time to consider the shift.

Q:  Can I still be involved in product or customer decisions?
Absolutely—but as a CEO, your role is to guide rather than execute. You’ll shape the vision and empower others to deliver.

Q:  What if I don’t have formal business training?
Many successful CEOs started as founders without formal training. With the right support, coaching, and systems, you can grow into the role.

Q:  Will stepping back hurt my company’s culture?
Not if done thoughtfully. In fact, empowering others can strengthen culture by fostering trust, ownership, and innovation.

Q:  How long does the transition take?
It varies. Some founders evolve over months, others over years. Rizolve Partners helps you build a tailored roadmap based on your goals and timeline.

Key Takeaways

• The founder-to-CEO transition is essential for scaling and building long-term value.
• CEOs lead through strategy, systems, and people—not just passion and hustle.
• Common challenges include letting go, imposter syndrome, and skill gaps.
• Embracing key shifts—like trusting your team and focusing on data—can accelerate your growth.
• Rizolve Partners provides the tools, coaching, and strategic support to guide your evolution

Reflection

Making the leap from founder to CEO is not just a career move—it’s a personal transformation. It requires courage, clarity, and commitment. But it also opens the door to greater impact, freedom, and legacy.

Ask yourself:
Are you building a business that can thrive without you?
Are you ready to lead not just with passion, but with purpose and precision?

If the answer is yes—or even maybe—it’s time to take the next step.

Ready to evolve from founder to CEO?

Book a consultation with Rizolve Partners today and start building the future of your business.  Email us at value@rizolve.ca or contact us to schedule your consultation.

AI is transforming how businesses approach succession planning by improving decision-making, preserving institutional knowledge, and enhancing leadership development. But AI can’t replace the emotional intelligence, trust-building, and values alignment that successful transitions require. The best results come from combining AI-driven insights with human-centered strategy. At Rizolve, we help business owners create a succession plan that respects legacy while leveraging the tools of the future.

Introduction: The Crossroads of Legacy and Innovation

Succession planning has always been one of the most emotionally charged and complex elements of running a business (in particular Family Businesses). It touches every layer of the organization, from financial continuity to leadership preparedness, to the deeply personal relationships between family members.

Now, as we step further into 2025, a new layer has emerged: AI.

At Rizolve, we believe that privately held businesses deserve every tool available to maximize value and preserve legacy. AI is one of those tools—but it must be applied wisely, with full awareness of both its power and its limitations.

Let’s explore where AI truly fits into succession planning—and where it doesn’t.

BONUS: Watch our very own Bob Cariglia’s podcast on how AI is impacting business

Where AI Fits in Business Succession

1. Capturing and Organizing Institutional Knowledge

One of the biggest risks in any transition, especially founder exits, is the loss of institutional knowledge. Who holds the client relationships? Where are the “unwritten” processes? What’s the story behind that strategic partnership?

AI tools like transcription engines, SOP generators, and knowledge base platforms can:

• Record founder interviews
• Document key business processes
• Create searchable internal libraries

Outcome: Ensures that critical knowledge survives the handoff, boosting continuity and perceived business value.

2. Enhancing Leadership Development with Data

Rather than guessing who’s ready to lead, AI can:

• Evaluate performance and behavioral patterns
• Track leadership potential across metrics like decision quality, team management, and adaptability
• Deliver personalized development plans

Tools like AI-driven Learning Management Systems (LMS) can also customize training paths for next-gen leaders.

Outcome: Creates measurable progress and accountability during leadership transitions.

3. Scenario Planning and Stress Testing

Succession often involves big “what ifs.” AI can simulate:

• Market fluctuations
• Cash flow under different leadership
• Organizational change impacts

This helps answer critical questions like:

• “What happens if the successor delays taking over?”
• “How will customer retention be affected during transition?”

Outcome: Better preparedness for multiple outcomes.

4. Unbiased Successor Evaluation

Bias is real. AI can support:

• Anonymous 360° feedback tools
• Competency benchmarking
• Cultural alignment scoring

Outcome: Adds objectivity to what is often a highly emotional decision.

5. Valuation Optimization Before Exit

If a business owner is considering a sale or partial exit, AI tools can:

• Analyze historical and projected financial data
• Model different deal structures
• Identify gaps in transferability

Outcome: Aligns expectations with market realities and improves negotiation position.

Where AI Doesn’t Belong (and Never Will)

While AI is a powerful asset, it can’t, and shouldn’t, replace human wisdom, empathy, and relational insight. Here’s where people still need to lead:

Organization Dynamics and Ownership Emotional Readiness

AI can’t navigate sibling rivalries, unspoken assumptions, or 40 years of history.

This is where trusted advisors like Rizolve bring value: facilitating difficult conversations, building alignment, and offering neutral perspective.

Value Alignment Between Generations

You can’t train AI to understand a founder’s sense of responsibility, or a successor’s desire for innovation and autonomy. These are human conversations requiring clarity, empathy, and respect.

The Timing of Transition

Just because AI can project optimal moments for exit doesn’t mean the family is ready. Sometimes it’s about legacy, health, or a desire to reach one more milestone. AI can’t—and shouldn’t—rush the process.

Cultural and Stakeholder Integration

Clients, employees, and partners all need to “buy in” to a succession. That requires vision, trust, and leadership—not code.

The Rizolve Perspective: Tech-Savvy, People-First

At Rizolve, we specialize in transitioning businesses at peak value, including family-run enterprises where the stakes are as emotional as they are financial.

We believe AI enhances, but never replaces, the human intelligence and strategic planning required to make transitions successful.

Our proven process includes:

• A full discovery and benchmarking phase
• Strategic planning tailored to family dynamics
• Weekly implementation support
• Collaboration with aligned advisors (CPAs, wealth managers, lawyers)
• Optional AI integration tools that support—without overpowering—the process

Ready to Future-Proof Your Legacy?

Succession is about more than continuity…it’s about maximizing the value of a lifetime of work.

Let Rizolve be your trusted guide. We bring deep succession expertise, cutting-edge tools, and the human touch needed to navigate even the most complex family transitions.

Start with a confidential Discovery Session
Email us at value@rizolve.ca or contact us to schedule your consultation.

Effective April 1st, 2024, Stephen Cummings, CEO of Rizolve Partners, will step into the role of Interim CEO of Ontario Genomics (OG) on a part-time basis over the next six months. Under the direction of the OG Board of Directors and in close collaboration with company’s management team, Stephen will oversee OG’s strategic direction and support the Board in the recruitment process for the new President and CEO.

Stephen’s nine-year tenure on OG’s board, coupled with his background in strategic business advisory as CEO of Rizolve Partners and private equity/venture capital, uniquely positions him to guide OG through this transition period with a steady hand – whose mission is to lead the application of genomics-based solutions across key sectors of the economy to drive economic growth, improved quality of life and global leadership for Ontario.

We look forward to embarking on this journey together with Ontario Genomics.

If you’re a private business owner, the odds are 2:1 that you’re a baby boomer (born between 1946 and 1964). Nearly two thirds of all private businesses today are owned by baby boomers – currently 53 to 71 years old. While boomers are holding on to their businesses longer than ever before, most will want or need to exit their business within the next 5 to 10 years. That could be good news if you’re looking to buy a business, but the market is about to get much more challenging for owners looking to exit.

Unlocking the wealth in a business is no trivial affair, particularly given that 80%-90% of most owners’ financial assets are tied up in their business. Owners are banking on their ability to monetize this wealth to ensure their financial security and lifestyle once they exit.

However, statistics show that only 20%-30% of private business transitions are successful; in most cases the business is liquidated for pennies on the dollar or the business just shuts down.

These startling facts will have a significant impact, not just for business owners and their families, but for everyone who depends on the successful transition of that business – partners, employees, suppliers, customers, supported charities, and entire communities.

So why do business transitions usually fail? There are five key reasons:

1. Building a business versus a transferrable asset

Most privately owned businesses, even if thriving, are not well positioned as a transferrable asset. There are a myriad of factors that affect the overall value of a business, but for example, even a booming business that relies too heavily on just a few customers, suppliers or employees, or that doesn’t have well documented processes in place, or doesn’t have a strong management team that can transition the business to a new owner, will make its continued success under a new owner much riskier, and therefore less appealing as an acquisition.

2. Forced to leave money on the table

Once the decision to exit is made, most owners have not allowed themselves enough time to position the business for transition, minimize taxes and maximize net proceeds. Typically, owners significantly underestimate what exiting successfully will require. Even if a business is well positioned for transition – and most are not – the majority of owners do not allow enough time to take full advantage of financial, tax and estate planning options. As a result, many owners end up with significantly lower net proceeds.

3. Unforeseen events

Nobody likes to think about worst-case scenarios, but the fact is that about half of all business owners are forced into an exit with suboptimal timelines and terms due to an unplanned event. Unless contingency plans have been put into place, an unexpected event such as a death, disability, divorce, departure or disagreement, can put the entire business at risk. This holds true on the flipside as well – even if an unsolicited offer is received from a buyer, it’s unlikely that the full value of the business will be realized if the owner is unprepared.

4. Ongoing profitability requirements

It’s rare that an owner will receive a windfall upon closing the sale of their business. Whether it be due to seller financing, holdbacks, earn-outs, management or partner buyouts, employee stock option plans or family transitions – more often than not, transition terms require continued profitability for a number of years after the owner exits to achieve full pay-out. Most businesses experience a decline following a transition, and owners do not realize the full value they expect to achieve when they exit.

5. Cannot achieve liquidity

Many owners have a business that cannot operate without them, is under-capitalized or has insufficient cash flow to successfully transition. These issues often eliminate the possibility of an inside option and also make it extremely difficult to achieve even a partial sale to a third party, particularly in an increasingly competitive buyers’ market.

When you boil it all down, 70%-80% of transitions fail because most business owners are not adequately prepared. Typically, it takes at least two to five years to do the things required to position a business as a transferrable asset. So, if you’re a business owner, you’d be very wise to start positioning your business as a transferrable asset now, regardless of when you plan to exit, to ensure that you can harvest your life’s work at an optimal value.

Rizolve Partners is a trusted strategic advisory firm dedicated to helping business owners achieve peak value. If you’d like to learn more, let’s have a conversation. Are you curious about how transferrable your company is and what you would need to adjust to transition it successfully when you’re ready? Then perhaps it’s time to for us to connect so we can discuss your company’s Value Builder Score and how to make your business (and your life) more attractive! You can reach us in any number of ways here.

Stephanie Breedlove started Breedlove & Associates in 1992 as a way to pay her nanny. The big payroll processors weren’t interested in dealing with one person’s wages and doing it themselves was complicated and time-consuming, too much for the then overwhelmed Breedlove.

Breedlove saw a business opportunity and started a payroll company for parents who needed to pay their nannies. By 2012, Breedlove & Associates had grown to $9MM in revenue and then she received a $54MM acquisition offer.

To give you some context of how incredible it is to sell a $9MM business for $54MM let’s look at the numbers. At The Value Builder System™, more than 25,000 business owners have completed the Value Builder Score questionnaire, part of which asks about any acquisition offers they may have received. The average multiple offered is 3.76 times pre-tax profit. Even the best-performing businesses, those with a Value Builder Score of 80+, only get offers of 6.27 times pre-tax profit on average. Breedlove got close to six times revenue.

What did Breedlove do right? We’re going to look at the five things Breedlove did—and that you can do—to drive up the value of a business.

1. Sell Less Stuff to More People

When Breedlove hit $30K per month in revenue, she quit her job at Accenture (formerly Anderson Consulting) and devoted herself to Breedlove & Associates full-time. To grow, she had a choice: sell more to her existing customers (e.g. busy couples often need lawn-care, house-cleaning, or grocery-delivery services) or stick with her niche of paying nannies. Most consultants and experts would say it’s easier to sell more to existing customers (and they’re right), but it doesn’t make your business more valuable. Breedlove decided to stick to her niche and find more parents who needed to pay their nannies, and that decision laid the foundation for a more valuable business.

Investors from Warren Buffet look for companies with a deep and wide competitive moat that gives the owner pricing authority. When you have a differentiated product or service, we call it having The Monopoly Control and companies with a monopoly get significantly higher acquisition offers.

Rather than selling existing customers generic services in commoditized markets, Breedlove focused on selling one thing to as many customers as she could find.

2. Strive for 50%+ Net Promoter Score

One feature that interested acquirers look for is your customer satisfaction levels. Increasingly, they are turning to the Net Promoter Score (NPS) as a measure of this. NPS was developed by Fred Reichheld and his team at Satmetrix, who discovered that your customers’ willingness to refer you to their friends or colleagues is highly predictive of your company’s future growth rate.

The NPS approach is to ask your customers how willing they would be to refer your company to a friend or colleague, on a scale of 0 to 10. They are then categorized into Promoters (9s and 10s), Passives (7s and 8s) or Detractors (0–6s). The NPS is calculated by subtracting the percentage of Promoters from the percentage of Detractors. Most businesses achieve an NPS of 10% to 15%, while the very best companies (think Apple and Amazon) get scores of 50% or more.

Breedlove obsessed over her company’s NPS and realized the key to driving it up was perfecting the first few interactions with a new customer. When you call a big payroll company looking for a service to pay your nanny, the response can be underwhelming. With only one person to pay, you are often relegated to the most junior staff member and even they would rather be dealing with a larger client.

When you call Breedlove, by contrast, you get a team of professionals totally focused on setting you up. You’re not an afterthought. You’re not passed on. Instead, you get the best onboarding talent the company has to offer.

This set-up team was a big part of how Breedlove achieved an astonishing 78% NPS.

3. Create Recurring Revenue Streams

The third thing that made Breedlove’s company attractive was recurring revenue.

Regardless of what industry you’re in, recurring revenue models give acquirers more confidence that the business will keep going strong after you leave.

By 2012, Breedlove & Associates had grown to $9MM and, given the nature of the payroll business, 100% of their revenue was recurring.

4. Reduce Reliance on Customers, Employees and Suppliers

Breedlove’s company was also attractive to buyers because she had a highly diversified customer base with no single customer representing even close to 1% of her revenue. If more than 10% to 15% of your revenue comes from one buyer, you can expect prospective acquirers to ask a lot more questions.

Customer concentration is one of three factors that make up The Switzerland Structure Module. The Switzerland Structure measures your business’ dependence on a single customer, employee or supplier.

5. Find an Acquirer You Can Help Grow

By 2012, Breedlove & Associates was growing 17% per year, which is good but not blow-your-mind good. So how did she attract such an incredible acquisition offer? The trick was showing her acquirer how they could grow.

In Breedlove’s case, she sold her company to Care.com. Think of Care.com as the Angie’s List of care providers (e.g. child care, senior care, etc.). If you need someone to care for your kids or an elderly relative, you enter your address into their website and Care.com will give you a list of vetted caregivers in your area.

At the time of the acquisition, Breedlove had 10,000 customers and Care.com had seven million members. Breedlove argued that if just 1% of Care.com’s members used Breedlove’s payroll service, it would equate to 7X growth in Breedlove & Associates almost overnight.

In 2012, Care.com acquired Breedlove & Associates for $54MM—an outstanding exit made possible by Breedlove’s focus on what drove her company’s value, not just their top-line revenue.

How much did your home increase in value last year?  Depending on where you live, it may have gone up by 5 – 10% or more.

How much did your stock portfolio increase over the last 12 months? By way of a benchmark, The Dow Jones Industrial Average has increased by around 13% in the last year. Did your portfolio do as well?

Now consider what portion of your wealth is tied to the stock or housing market, and compare that to the equity you have tied up in your business. If you’re like most owners, the majority of your wealth is tied up in your company. Increasing the value of your largest asset can have a much faster impact on your overall financial picture than a bump in the stock market or the value of your home.

Let us introduce you to a statistically proven way to increase the value of your company by as much as 71%.  Through an analysis of 6,955 businesses, we’ve discovered that companies that achieve a Value Builder Score of 80+ out of a possible 100 receive offers to buy their business that are 71% higher than what the average company receives.

How long would it take your stock portfolio or home to go up by 71%? Years – maybe even decades. Get your Value Builder Score now and you will be able to track your overall score along with your performance on the eight key drivers of company value. Like a pilot working his instrument panel, you can quickly zero in on which of the eight drivers is dragging down your value the most and then take corrective action.

Your overall Value Builder Score is derived from your performance on the eight attributes that drive the value of your company:

1. Financial Performance: your history of producing revenue and profit combined with the professionalism of your record keeping.

2. Growth Potential: your likelihood to grow your business in the future and at what rate.

3. The Switzerland Structure: how dependent your business is on any one employee, customer or supplier.

4. The Valuation Teeter Totter: whether your business is a cash suck or a cash spigot.

5. The Hierarchy of Recurring Revenue: the proportion and quality of automatic, annuity-based revenue you collect each month.

6. The Monopoly Control: how well differentiated your business is from competitors in your industry.

7. Customer Satisfaction: the likelihood that your customers will re-purchase and also refer you.

8. Hub & Spoke: how your business would perform if you were unexpectedly unable to work for a period of three months.

To find out how you’re performing on the eight key drivers of company value and start your journey to increasing the value of your largest asset, get your Value Builder Score now.

Let’s say you’re in the market for buying a house and you go to view one that looks appealing in the ad. How does it look on the inside? The outside? What about the location? What is your general impression?

Like your house, your business projects an image to potential buyers. When they come to see your business for the first time, your “curb appeal” can attract a buyer to your business—or cause them to walk away from it.
Do you need to improve your curb appeal? Here’s a three-step plan:

1. Fix Your Leaky Faucets
   Perhaps, like many other business owners, you started your business from scratch with one or two employees and now you have 20 people working for you. But do you have the appropriate HR infrastructure in place for that size of a company?  Perhaps you even take pride in your informal management style, but it can prove to be a liability when it comes time to sell.

Make sure your human resources policies are at least as stringent as those of the company you hope will buy your business. Some basics to have in place:

• A written policy making it clear you forbid any form of harassment or discrimination;
• A written letter of employment for each staff member;
• A written description of your bonus system;
• Written policies for employee expenses, travel and benefits. 

2. Assemble Your Binder
   When you go to buy a house, it will give you confidence if the owner has the instruction manuals for the appliances, information on where they were purchased, and who to call if one of them breaks down.

Similarly, when a potential buyer looks at your company, he wants to see that you have your business information in order.  Documenting your office procedures, core processes, and other intellectual capital can help you attract more bidders and a higher price for your company, while also lowering the chance of the deal falling apart during diligence.

If you want to attract a buyer one day, your business needs a binder with instructions for basic functions, such as:

• Opening up in the morning and closing down at night;
• Forms and step-by-step instructions for routine tasks;
• Templates for key documents;
• Emergency numbers for service providers;
• Billing procedures for customers.
• How your company is positioned in the market and your marketing tools.

3. Document Your Intangibles
   Intangibles for house buying might include: Is the house near a good school or daycare? What kind of neighborhood is it? What kind of commute are you looking at to get to work?

Your business also has intangible, often intellectual, assets that a potential buyer needs to be made aware of, such as:

• Proprietary research you’ve conducted;
• A formula for acquiring new customers;
• Criteria you use to evaluate a potential new location;
• Your unique approach to satisfying a customer.

As with selling a house, your company’s curb appeal can go a long way toward closing a deal.

 What are your business goals for the year? If you’re like most owners, you have a profit goal you want to hit. You may also have a top line revenue number that’s important to you. While those goals are important, there is another objective that may have an even bigger payoff: building a sellable business.

But what if you don’t want to sell? That’s irrelevant. Here are five reasons why building a sellable business should be your most important goal, regardless of when you plan to push the eject button:

1. Sellability means freedom

One of the fundamental tenants of sellability is how well your company would perform if you were unable to work for a while. As long as your business is dependent on you personally, there’s not much to sell. Making your company less dependent on you by building a management team and creating just-add-water systems for employees to follow means you have the ability to spend time away from your business. Think of the world of possibilities that would open up if you could choose not to go into the office tomorrow….

2. Sellable businesses are more fun

Running a business would be fun if you were able to spend your days on strategic thinking and big picture ideas. Instead, most business owners spend the majority of their day on the minutia: the government forms, the employee performance reviews, bank reconciliations, customer issues, auditing expenses. The boring details of company ownership suck the enjoyment out of owning a business—and it is exactly these tasks you need to get into someone else’s job description if you’re ever going to sell.

3. Sellability is financial freedom

Each month you open your brokerage statement to see how your portfolio is doing. Not because you want to sell your portfolio, but because you want to know where you stand on the journey to financial freedom. Creating a sellable business also allows you peace of mind, knowing that you’re building something that—just like your stock portfolio—has value you could choose to make liquid one day.

4. Sellability is a gift

Imagine that your first-born graduates from college and as a gift you give him your prized 1967 Shelby Ford Mustang. Your heavily indebted child takes it on the road, but after a few miles, the engine starts smoking. The mechanic takes one look under the hood and declares that the engine needs a rebuild.

You thought you were giving your child an incredible asset, but instead it’s an expensive liability he can’t afford to keep, and nor can he sell it without feeling guilty.

You may be planning to pass your business on to your kids or let your young managers buy into your company over time. These are both admirable exit options, but if your business is too dependent on you, and it hasn’t been tuned up to run without you, you may be passing along a jalopy.

5. Nine women can’t make a baby in one month

There are some things in life that take time, no matter how much you want to rush them. Making your business sellable often requires significant changes; and a prospective buyer is going to want to see how your business has performed for the three years after you have made the changes required to make your business sellable. Therefore, if you want to sell in five years, you need to start making your business sellable now so the changes have time to gestate.

Are you curious about how sellable your company is and what you would need to tweak to sell it when you’re ready? Then perhaps it’s time to for us to connect so we can discuss your company’s Value Builder Score and how to make your business (and your life) more attractive! You can reach us in any number of ways here www.rizolve.ca/contact.

Have you ever wondered what determines the value of your business?

Perhaps you’ve heard an industry rule of thumb and assumed that your company will be worth about the same as a similar size company in your industry. However, when we take a look at the data provided by The Value Builder System™, we’ve found there are eight factors that drive the value of your business, and they are all potentially more important than the industry you’re in.

Not convinced? Let’s look at Jill Nelson, who recently sold a majority interest in her $11 million telephone answering service, Ruby Receptionists, for $38.8 million.

That’s a lot of money for answering the phone on behalf of independent lawyers, contractors and plumbers across America.

To give you a sense of how high that valuation is, let’s look at some comparison data. At Value Builder, we’ve worked with more than 30,000 businesses in the last five years. Our clients start by completing their Value Builder questionnaire, which covers 42 questions that allow us to place an estimate of value on a company. The average value for companies starting with us is 3.6 times pre-tax profit and those who graduate our program with a Value Builder Score of 80+ (out of a possible 100) are getting an average of 6.3 times pre-tax profit.

When we isolate the administrative support industry that Ruby Receptionists operates in, the average multiple offered for these companies over the last five years is just 1.8 times pre-tax profit.

Nelson, by contrast, sold the majority interest in Ruby Receptionists for more than 3 times revenue.

There were three factors that made Nelson’s business much more valuable than her industry peers, and they are the same things you can focus on to drive up the value of your company:

1. Cultivate Your Point Of Differentiation

Acquirers do not buy what they could easily build themselves. If your main competitive advantage is price, an acquirer will rightly conclude they can simply set up shop as a competitor and win most of your price sensitive customers away by offering a temporary discount.

In the case of Ruby Receptionists, Nelson invested heavily in a technology that ensured that no matter when a client received a phone call, her technology would route that call to an available receptionist. Nelson’s competitors were mostly low-tech mom and pop businesses who often missed calls when there was a sudden surge of callers. Nelson’s technology could handle client surges because of the unique routing technology she had built that transferred calls efficiently across her network of receptionists.

Nelson’s acquirer, a private equity company called Updata Partners, saw the potential of applying Nelson’s call-routing technology to other businesses they owned and were considering investing in.

2. Recurring Revenue

Acquirers want to know how your business will perform after they buy it. Nothing gives them more confidence that your business will continue to thrive post sale than recurring revenue from subscriptions or service contracts.

In Nelson’s case, Ruby Receptionists billed its customers through recurring contracts—perfect for making a buyer confident that her company has staying power.

3. Customer Diversification

In addition to having customers pay on recurring contracts, the most valuable businesses have lots of little customers rather than one or two biggies. Most acquirers will balk if any one of your customers represents more than 15% of your revenue.

At the time of the acquisition, Ruby Receptionists had 6,000 customers paying an average of just a few hundred dollars per month. Nelson could lose a client or two each month without skipping a beat, which is ideal for reassuring a hesitant buyer that your company’s revenue stream is bulletproof.

Nelson built a valuable company in a relatively unexciting, low-tech industry, proving that how you run your business is more important than the industry you’re in.