Framework
Trunk Strength Scorecard
TL;DR
Quantitative assessment tool to evaluate whether core business is strong enough to support branching.
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)