business broker

Transferable Value

Hank Bockus

Hank Bockus

Oklahoma City Business Broker and Founder of Bockus Consulting

Transferable value. Is this important to you?

Did you know only 4% of all US businesses do a million dollars in top line revenue?  Going one step further, did you know only 0.4% of all US business do over ten million in top line revenue?

What does this have to do with transferable businesses? I have found at these levels of sales you have moved from owning a job to owning a business. 

The difference between a job and a business is that a business is perpetual.  It goes on with or without you.  You can take a vacation and still get paid.  The business, even though you set the overall direction, is not reliant on your income generating capabilities.

On the other hand a job is completely dependant on you.  Jim Carlye wrote about the value of a transferable businesses by saying the value is, “what a business is worth to someone else without the original ownership.”

The question to ask ourselves as business owners is not, “how well do I run my business?”  Instead the question we should be asking, “how well does my business run without me?”

I have a list of 11 requirements to take on a business client. 

Here are 4 of the 11 items:

1) Business owner takes a minimum of 2 weeks vacation every year.

2) Business doesn’t have over 25% of overall revenue tied up with 1 client.

3) Business has 3 or more vendors to purchase their product from.

4) Business has a stable and motivated management team.

Here is a challenge to all us who call ourselves entrepreneurs, investors, creators and yes – business owners.  Take 4 weeks vacation.  Can you be away from the business for that long and when you return the business is still rolling along.

Congratulations – you are one step closer to having a transferable business.

~Hank Bockus, owner Bockus Consulting.

“Keep selling. Get sold”