THE Value Shift
Created to bring the most valuable insights and tools to manufacturing business owners in order to increase the value of your company.
No BS, just clear shifts you can use: bring actionable insights to the floor with each week having a relevant topic. Sharing this newsletter will collectively bring our entire industry leveled up and will bring you goodies you will like too.
Let’s dive in.
Insight
Think about your last five days.
You've likely never sat across from yourself in a due diligence meeting.
Most owners haven't. So, when a buyer walks into your shop and starts asking questions, you answer them — and potentially revealing more than what you realize, about gaps that could have been addressed long before the sit down with a buyer.
Here's what that conversation might sounds like.
The Question
"Who handles things when you're not here?"
"How do you handle a quality escape or a late job?"
"How do you handle a quality escape or a late job?"
"Walk me through how a new job gets quoted and scheduled."
What you said
"My foreman covers the floor. I check in when needed."
"I get involved right away. I can usually sort it out faster than anyone."
"All three came through me. They call me directly if anything comes up."
"I handle complex quoting myself. I approve the final schedule each week."
What they heard
The owner is still the decider. Nothing moves without them.
There's no escalation path. The owner is the process.
If the owner leaves, the relationships leaves.
Two critical functions. No redundancy. No documentation.
Four questions. Four different answers. Same message every time: this business runs through one person.
Then comes question five.
If you stepped away for three months, what would break first?
Most owners laugh. A few pause. Almost none have a ready answer.
What the buyer hears in the silence: Everything.
This is the whole question. Not really about three months — about whether the business was built to run or built to need you. Businesses that can sustain a three-month owner absence are more than twice as likely to receive a premium acquisition offer. The silence answers it before you say a word.
None of these are trick questions. Any serious buyer asks all five on the first site visit. They're looking for the same thing every time: evidence that the business works without the owner at the center of it.
You built a business. The question is whether you built one someone else can run.
A documented response transfers with the business. A person doesn't.
Action
Find your spokes
The Hub & Spoke analogy is an applicable one to the owner at the center of the business. Think through the spokes and how you may begin to step out of the hub role in each of the areas below.
Reference last week’s degrees of delegation and consider where there is the least, and what can be learned from areas that have appropriate delegation.
The Number
2x
Businesses that can sustain a three-month owner absence are more than twice as likely to receive a premium acquisition offer — defined as 6× EBITDA or higher. That's not a marginal difference. On a $500K EBITDA shop, the gap between a standard offer and a premium offer is $1.5M or more. The three-month test isn't hypothetical. It's the line buyers draw between a business and a job. (Source: The 4 Degrees of Delegation, Value Builder research)
O&O Playbook:
Hit reply and tell me which trap hits your time and value the most
Next week, we'll look at what the owners who closed that gap actually did first — and why most of them started in the same place.
🛠️ Tools:
Stay tuned for a marketplace of tools we’ve created over years of needing the right efficiencies in place to create extreme value
Until next week,
LineShift Partners