Finding Hidden Value: Norwich Firm Helps Small Businesses Figure Out What They're Worth 

  • Senior software engineers Dave Goldberg, of West Lebanon, left, and Philip Bowman, of Bradford, Vt., collaborate on a project at CoreValue Software in Norwich on Tuesday. (Valley News - Libby March)
  • Lisa Kable (Valley News - Libby March)
  • Chuck Richards (Valley News - Libby March)

Norwich — The mission of CoreValue Software is easy to see, although it’s not readily apparent.

Clues — large photographs of aged, closed factories, steam locomotives, rusted, discarded machinery — populate the office walls of the global company that operates in the back of a two-story building with no sign on Main Street to announce its presence.

However, even the poster-sized black-and-white photos don’t give a clear picture of what CoreValue is about. The bright office, functionally furnished with sensible desks and chairs, computers, an occasional dog bowl under a desk and bags of canine treats covering an entry shelf, could house any number of businesses — perhaps a real estate firm that sells off shuttered or dying factories or an equipment brokerage that finds buyers for obsolete machines.

But instead of hovering over the decaying carcasses of outmoded industries, CoreValue’s plan is to swoop and save them with a software program that makes closely held small- and medium-sized businesses look deeply at their operations with an eye on the future.

“The photographs are a reminder of what we do, and what we’re trying to prevent,” said Lisa Kable, the president of CoreValue, who co-founded the company with Chief Executive Officer Chuck Richards.

“We feel like we’re reaching and helping business owners, and when they transfer their business, it will be a net job generator — that the business will do well and jobs will be created,” Kable said.


The inspiration for CoreValue came out of Richards’ childhood. He grew up in Springfield, Vt., and during his youth, the town was bustling with 5,000 good-paying manufacturing jobs that made it one of the world’s leading machine tool centers. The prosperity funded good schools, libraries and a close-knit community that was thriving. But b the 1970s and ’80s, the factories were fading, the work drying up and the town struggling.

“I couldn’t understand what had gone wrong. A town of 10,000 had lost 5,000 jobs. The companies had just given up, and everything was imploding. So, when I went to college at Williams, and then at MIT and Harvard, I studied economics and wanted to know everything that I could about how this could happen and how to turn it around,” Richards said.

He found out that what had happened in Springfield and across the country was that business owners had gotten old and tired. Somewhere, they had forgotten to change and innovate. They had kept the details of their business operations in their heads. When it came time to sell, the value of the company had fallen to a level that it couldn’t be sold as an ongoing operation.

Richards also discovered that, in cases where second generations took over or the companies were sold to outside owners, the rate of failure of the transferred businesses was about 75 percent.

After completing advanced degrees and spending a stint in academia, Richards served as either CEO or chief financial officer for four startup companies and two turnarounds, worked with owners of 50 companies to build value, and advised hundreds of CEOs of private companies.

Richards, who lives in Norwich with his wife and four children, also has spent more than 30 years in private business research and the leading member of teams that created a set of business standards — “18 value drivers” — that quantify the effectiveness of a business’ inner processes. The system measures such intangibles as customer diversification, ingenuity, the ability to attract new talent, market share, profits tied to personal relationships, senior management and others.

Meanwhile, Kable, who also lives in Norwich with her family, graduated from Dartmouth College and became an expert in the consumer product industry and an entrepreneur after spending more than 20 years in brand management, general management and marketing. She worked with such Fortune 500 companies as Quaker Oats Gatorade, James River Dixie and Remington Products, and in 2002, she co-founded Artemis Woman, a company that sells home beauty tools and that landed on the Inc. magazine 500 list in 2007.

A couple of years ago, Kable, who had left Artemis, followed up on a want ad placed by Richards. Their experiences fit, and they started CoreValue. They lined up financing with Baker Capital, a New York venture capital firm that has $1.5 billion under management.


After a year of research and development, CoreValue launched last April. The company now has eight employees. It started gaining revenue in September. “We’re on track to break even during 2013,” Richards said.

CoreValue has developed a software system based on the 18 value drivers that quantify the intangible assets hidden in small and medium-sized businesses — those with fewer than 500 employees and revenues of less than $1 billion. The program is sold to business advisers who work with company owners.

The first phase, a series of questions with general multiple-choice answers, takes 90 minutes to complete. From that information, owners will have an understanding of how their firm’s value compares with others in the same industry. They also will have a list of strengths and see areas of weakness that, if improved or expanded, on can bring up the worth of the business. After the first step, the other two phases go deeper to provide the owner with a plan and records that will allow the business to move into a stronger position to expand, find new capital, or sell.

“It’s like buying a car. You wouldn’t buy a car without looking under the hood at the engine,” Richards said. “What we’re doing is letting you look under the hood and not just at the engine (the revenue and profit), but also at the gears (unquantified hidden intangible assets) inside. We’re identifying the gears that make the engine work to give you an accurate picture of which gears are working well and which ones need repair.”

For generations, companies have been evaluated by financial measures alone, which only look backward at the revenue and profits. By looking deeper, one can get a clearer picture of the future, how the intangibles work with the financial picture and how together they will drive future revenue and profit, Richards said.

By finding a truer value for the companies, the chances of improved future success are enhanced, rather than jobs being lost, Kable said.


Small to medium companies make up 99 percent of the 28.5 million businesses in the country, according to the latest Census figures and the Small Business Administration. Those firms accounted for 64 percent of net new jobs over the last decade and half of the gross domestic product generated by the private non-agriculture sectors.

Although figures vary, it was estimated that in 2010, that 70 percent of U.S. firms with paid employees were owned by baby boomers. In 2020, the youngest boomers will be 55 and more than half will be 65 or older. It’s also estimated that as many as 2 million businesses owned by those 57 and older will be for sale in the next five to 10 years, and that as many as 3.8 million firms could be for sale over the next 20 years. The glut of businesses on the market is even the topic of a popular book titled The $10 Trillion Opportunity.

A 2008 White Horse Advisors survey of closely held businesses showed that 96 percent of baby boomer business owners agreed that having an exit plan and succession strategy is important for their future and the future of the business, but 87 percent had no documented exit plan.

Other research also has shown that, of those businesses put on the market in the past with less than $50 million in revenue, 80 percent did not sell and of those with more than $50 million in revenue, 65 percent didn’t sell.

When companies shut down, it creates an economic hole in a community. Not only are jobs lost at the business, but suppliers and other businesses dependent on the revenue from the closed firm also suffer. Tax revenues decline and real estate gluts the market causing values to drop, Richards said.


Last spring, Richards and Kable got Bob Zider, the director and CEO of the Vermont Manufacturing Extension Center, to try out the CoreValue program. The not-for-profit organization advises companies across Vermont and offers advice to help them improve their operations.

Zider quickly became sold on CoreValue and became a paying customer in the fall, he said, adding that he’s spread the word to other sister organizations in other states across the country, and they are now using the software.

“The software allows us to generate some very interesting data. It gives us a quick picture of where a company is doing well and where to focus on improvements. It’s not a formal business evaluation, but we’re finding that it gets within 5 to 10 percent of a formal business evaluation, which is quite expensive and something that a lot of small businesses can’t afford,” Zider said.

The center leases the CoreValue software and in turn charges the companies that it is advising. The average cost for its clients is about $3,000 for a year’s subscription, he said.

“By using the key 18 drivers, it allows us to start the discussion with the owners over the goal of where they want to be in five years and to get them there. It gives us the platform so that they can do the planning for growth or if they want to sell the business,” Zider said.

The fact that CoreValue has the social aspect of trying to preserve jobs and keeping companies in business appealed to Greg Fairbrothers, the director of the Dartmouth Entrepreneurial Network, who co-wrote an article last year about the company in Fortune magazine.

“Is he succeeding in saving businesses? I don’t know. But I think that he’s succeeding to force companies to look at the question (about the future) and getting them to go through the exercise is terrific,” Fairbrothers said.

“We know if you transfer a business well, it grows and creates jobs,” Richards said in an article in The New York Times a year ago. “We know new blood in old businesses is a shot of adrenaline, with new energy, new technology and a focus on the future. For the first time in three generations, we have the chance to reinvigorate our economy with new blood. The boomers have the opportunity to transfer their businesses to the next generation in a way that grows the economy. It all starts with defining success, not profit.”

Warren Johnston can be reached at or 603-727-3216.