What is Your Client's Business Worth?
Whether we like the idea or not, every business has a TEVO score. In the same way every adult is given a credit score to quantify financial reliability, businesses at $1M annual revenue and above are given a TEVO score.
The TEVO Score assesses a business based on these five factors:
- Financial Strength
- Systems and Processes
- Base Business
- Management Team
TEVO = Total Enterprise Value Opportunity. It is the only standardized way to value private companies using a multiple as an indication of value.
The TEVO Score is the trusted benchmark to value privately held companies.
Being able to provide this information to your client will increase your value to your clients even more. Selected senior members of the Blazej Accounting team have been trained to conduct the assessments and deliver the score. It's a way to extend the services you offer your best clients without having to expand your staff or training requirements.
Where does your client stand in their industry?
The TEVO Score defines opportunity gaps. It positions a business within its industry -- you and your client will see clearly how far they are from being a leading company in their industry.
TEVO Key Performance Indicators
The strength and reliability of the numbers
Beyond Sales or Profits
Sales and profits tend to be the first numbers that get attention, but it is the quality of the earnings that really matters.
Business size and industry will determine what factors could improve the TEVO Score.
Systems & Processes
Infrastructure and the ability
Infrastructure is especially critical for service businesses or those with tangible intellectual property.
It's more than technology - it's contracts, internal systems, the building and more.
The diversification of customers and sales force
By now, they believe they have the basics handled, yet this is the first place to look to increase value.
By addressing supply chain, revenue streams and the diversity of their client base, your client can improve their TEVO score.
Reliance on the owner and overall strength of the leadership team
If they have over 50 employees or more than $10 million in sales, the management team & succession plan are key to scoring well.
By reducing the reliance on the owner and developing a layered management structure, your client can improve their TEVO score.
Growth, margin, integration
Focus on the Future
Where the financial strength measurement considers the past, this metric looks at where the business is going.
Often a lower priority for the business owner, companies with scalable, expandable products or services will be rewarded with better TEVO Scores.
The TEVO score is the only standardized way to value private companies using a multiple as an indication of value.
How can getting a benchmark score help your clients?
The TEVO score can reveal strengths and weaknesses in a company, as compared to its competitors.