Hidden Value Killers: Part 2 Study Questions

What Exactly Did He Say?

MULTIPLE CHOICE QUESTIONS

1. According to the YBAWS! Action Framework, what percentage of your time should ideally be spent in the Owner category?

a) 50%

b) 65%

c) 80%

d) 95%

2. What was the primary reason Jimmy Page’s web development agency received such a low valuation multiple?

e) Poor revenue growth and declining profit margins

f) The business was entirely dependent on Jimmy’s personal involvement

g) Outdated technology infrastructure

h) Excessive debt and poor financial management

3. In the framework, what does “transferable cash flow” mean?

i) Cash flow that can be transferred between business accounts

j) Revenue that continues even if the owner vanishes

k) Income that is taxed at a lower rate

l) Profits that can be moved offshore

4. What was Eddie Van Halen’s recurring revenue percentage by Year 5 of implementing the framework?

m) 15%

n) 42%

o) 68%

p) 82%

5. According to Post 2, which step of the Action Framework involves trademarking your name and patenting your processes?

q) Second, create systems

r) Third, develop metrics that matter

s) Fourth, protect your intellectual property

t) Sixth, train your team to think like owners

EXPLANATION QUESTIONS

1. Explain the difference between “transferable cash flow” and owner-dependent income, and why this distinction matters for business valuation.

2. Describe the role reversal that business owners must make as their companies grow, according to Post 2. What happens if owners fail to make this transition?

3. List and briefly explain the six steps of the YBAWS! Action Framework presented in Post 2.

4. In the case study of Sam Hopkins (the cabinet maker), what was the core problem with his business model, and what did this reveal about the difference between operational success and transferable value?

5. Compare the outcomes of Jimmy Page and Eddie Van Halen’s agencies. Despite having nearly identical starting points (revenue, EBITDA, margins), what specific actions did Eddie take that resulted in a $5.3M higher valuation?

ANSWER KEY

Multiple Choice Answers