• Simon Zryd

Value Driver 8: Hub and Spoke



Value Driver 8: Hub and Spoke

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The Hub and Spoke refers to how dependent your company is on you personally. Again when the acquirer comes in to buy your business they will want to know how this thing is going to operate when you leave. The more dependent the company is on you personally the lower you're going to score on Hub and Spoke.

The name comes from a conversation John Warrilow, the Founder of the Value Builder System, had with a business owner over 20 years ago. The business owner was describing his role in the company: “I'm a hub and a hub and spoke model were all my employees come to me when they've got a question. My customers come to me when they need a quote. My suppliers come to me when they want me to buy something.” He was proud of that operating style saying that that's what makes his business efficient.

Well maybe efficient but if you've ever flown through Chicago O'Hare when there's a snowstorm and the hub breaks down and everything gets locked up – it's a disaster.

The same thing is true of a Hub and Spoke business owner. When everything is dependent on the Hub and Spoke owner or that that Hub manager, then there's not much value left in the company.

The key here is to improve your score on the Hub and Spoke is to make sure your business becomes less dependent on you personally.

To learn more about all 8 key drivers of company value and how to use them, download our free report here: https://www.denverbusinesscoach.com/8vdebook

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