Trunk Strength Scorecard
TL;DR
Quantitative assessment tool to evaluate whether core business is strong enough to support branching.
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Quantitative assessment tool to evaluate whether core business is strong enough to support branching. Scores five dimensions 0-2 points each for total 0-10 score.
When to Use Trunk Strength Scorecard
As first step in Four Branching Questions framework. Before any branching decision to objectively assess trunk health.
How to Apply
1
Market Position (0-2 points)
Assess competitive position in primary market
Questions to Ask
- Are you #1 or #2 with defensible moat? (2 pts)
- Top 3-5 but contested? (1 pt)
- Fragmented, no leadership? (0 pts)
2
Financial Reserves (0-2 points)
Assess runway and profitability
Questions to Ask
- 24+ months runway OR profitable with significant reserves? (2 pts)
- 12-24 months OR breakeven with modest reserves? (1 pt)
- <12 months AND unprofitable? (0 pts)
3
Process Maturity (0-2 points)
Assess operational scalability
Questions to Ask
- Documented, repeatable, scalable (runs without founders)? (2 pts)
- Repeatable but person-dependent? (1 pt)
- Ad hoc, founder-dependent? (0 pts)
4
Team Bench Depth (0-2 points)
Assess leadership redundancy
Questions to Ask
- Business operates 3+ months without founders/executives? (2 pts)
- Limited bench, some redundancy? (1 pt)
- Founders are single point of failure? (0 pts)
5
Customer Retention (0-2 points)
Assess customer loyalty
Questions to Ask
- 90%+ annual retention (NRR >100% for SaaS)? (2 pts)
- 70-89% retention? (1 pt)
- <70% retention? (0 pts)