Patrick Good, Toledo Business Coach with AdviCoach of NW Ohio, shares his Sellabililty Score research findings which points to the reasons why businesses in the same industry may have much different valuations when it comes time to sell. In this episode, he offers 5 ways to make your business more valuable.
For more information visit Patrick’s website.
Make Your Business More Valuable Video Transcript
5 Things That Make Your Business More Valuable Than Your Industry Peers
How do you know if your company is worth more than your competitors? Stay tuned, I’m going to give you 5 ways to increase your business’s value.
The value of your company is partly determined by your industry. For example, cloud-based software companies are generally worth a lot more than printing companies these days.
However, when we analyze businesses in the same industry, we still see major variations in valuation. So we dug through the data available to us from our partners at The Sellability Score and we found 10 things that will make your company more valuable than its industry peer group. Here are the first 5.
1. Recurring Revenue
The more revenue you have from automatically recurring contracts or subscriptions, the more valuable your business will be to a buyer. Even if subscriptions are not the norm in your industry, if you can find some form of recurring revenue, it will make your company much more valuable than those of your competitors.
2. Something Different
Buyers buy what they cannot easily replicate on their own, which means companies with a unique product or service that is difficult for a competitor to knock off are more valuable than a company that sells the same commodity as everyone else in their industry.
Acquirers looking to fuel their top line revenue growth through acquisition will pay a premium for your business if it is growing much faster than your industry overall.
Tired old companies often try to buy sex appeal through the acquisition of a trendy young company in their industry. If you’re the darling of your industry trade media, expect to get a premium acquisition offer.
If you have a great location with natural physical characteristics that are difficult to replicate you’ll have buyers who understand your industry interested in your location as well as your business.
Your industry typically defines a range of multiples within which your business is likely to sell for; but whether you fall at the bottom or the top of the range comes down to factors that have nothing to do with what you do, but instead, how you do it. I encourage you to visit our website to learn more about how you can increase the sellable value of your business today.
About Toledo Business Coach, Patrick Good
Patrick Good is the Owner of PAG Associates, a Corporation consisting of 5 business units, including AdviCoach of NW Ohio. Pat founded AdviCoach of NW Ohio in 2010. AdviCoach is the nation’s fastest growing business coaching and advisory firm. Pat has an extremely broad business background with over 25 years of experience and success in a wide range of areas including Sales & Marketing, Business Development, Operations, Materials Management, Purchasing, Manufacturing, and Engineering. His extensive business acumen is rooted in his shop-floor manufacturing and production management experience. He has led the Materials, Purchasing, Operations, and Sales functions of local and global companies, including Honeywell International, Midwest Stamping, Kelsey-Hayes, William Cook North America, and Toledo Stamping.
Pat’s background includes certifications in Six Sigma, Lean Manufacturing, Theory of Constraints, and Total Quality Management systems, including Facilitator roles. He is a Lifetime Certified Purchasing Manager and Six Sigma Black Belt.
Watch Pat’s episodes of Toledo Business Coaching: Making Your Success a Reality