The Value Spectrum
All businesses sit somewhere on this spectrum and maximising the value of your business depends upon your ability to recognise where it currently sits and how to improve its position. The next few blog posts will focus on this model and how to use it to MAXIMISE THE VALUE OF YOUR BUSINESS !
Lets look at the model first – a simple spectrum identifying the different types of businesses – from boutique to scale – neither end better than the other – just a different model for running a business and importantly different value drivers at each end of the spectrum.
If we look at some common examples it becomes much clearer:
Scale– this is McDonalds – a true scale business – value is based on volume. This is a highly efficient factory for churning out fast, convenient take away meals (initially hamburgers but now a wider range of meal options ) – forget the ethical and health arguments for a while and just look at the business. The typical McDonalds franchise in Australia sells for about $1M – $1M FOR A HAMBURGER SHOP ! Why ? – they make money and are easy to run.
This is Michael Gerber’s e-myth on steroids – highly systemised and efficient factories where volume is key – we will look at some of the specifics of the McDonalds business in the next post and you’ll see some amazing factors that contribute to its unique value and explain why they sell for $1M.
In the next few posts we will go in much more detail on boutique and scale businesses and how to drive value in each area – as well as what to do if you get stuck in no mans land. This is the area where we get most client response at seminars – it is a valuable platform for understanding how to build real value in your business.