The Switzerland Structure

The reference is to the Swiss trying to remain a political “island”, not getting too cozy with any one faction or regime.

For businesses, the term you are probably familiar with is concentration.  To your value, look attractive to potential buyers, and set yourself up to accelerate growth, you don’t want your business to be overly concentrated in any of these three areas – Customers, Employees, and Suppliers.

 

  • For Customers – You can’t have a large portion of your sales coming from too few clients. You need to diversify your customer base. I know that sounds easier said than done, but we do address this later by discussing growth potential and your clients’ preferred transaction methods.
  • Employees – The overall idea is that you can’t be overly reliant on a few employees. My book, “Build It, Sell It, Profit” addresses this from the perspective of a business owner, not just a potential buyer.  In particular, I example documented workflows and what we call a “living procedures manual.”  Should someone not show up to work one day, this covers everything from working the phones to harvesting the pipeline of prospective clients.
  • Suppliers – This is, admittedly, more important for some industries than others. But no matter the type of business you’re in, you want to variation among your vendors. Or, at the very least, have a disaster recovery plan that addresses the loss of a supplier.

To see how this adds value to your business, think about it from the perspective of a potential buyer.  If they see that you are overly concentrated in any of these areas, they will interpret that as a risk and discount the value of your business.  These are risks that endanger your business, as opposed to the type of risks that could grow your business.