The Fifth Component Of Value – Dynamic
Here’s where it really gets exciting – and you definitely can’t do this by yourself. Once you have the ‘perfect storm’ of company value and interest in the market by acquirers, the right process will ignite an auction for your company among all the buyers. You’ve seen an exciting auction, and may have even been caught up in one. The auctioneer expertly presents the offering and then deftly works the crowd until, when the gavel finally falls; the price received is something that seemed …

The Fourth Component Of Value – Strategic
Now you’ve done everything you can do inside of your business to build the value. Strategic value is that extra value that an acquirer places on your company because of what’s possible for them by owning you. You may have a niche product that exactly fills a hole in their product line. You may have a solution that can be sold to a large part of their customer base. You may have technology that enhances their products. You may have processes or a distribution …

The Third Component Of Value – Growth
Every business must grow – must add new customers and increase revenue – just to offset natural attrition and rising costs. That type of growth doesn’t get you anywhere though. There is also a ‘default’ growth rate. If you do good work and don’t screw anything up you will naturally get more business by repeat customers, referrals and overall market and industry expansion. Good, although not outstanding – nobody will pay you any extra for that type of growth. Truly valuable growth is significantly …

The Second Component Of Value – Profitability
You already look at your bottom line. You’ve watched it for years and it usually goes up. You will often hear about companies being priced as multiples of profit so the higher your profit, the higher the value of your company. If you’re like most business owners you also know there are things you can do to increase your profits – things that are obvious (to you), things that you know would work and just haven’t gotten around to doing. Every business owner has …

The First Component Of Value - Assets
This one is pretty simple; it’s the stuff your business owns. At first glance you may think “That’s pretty simple; we get a valuation and that’s that.” True as far as it goes. A buyer is also looking down the road and is considering other things as well. Do you have the right assets? The right mix? Are they in good shape or will they need to be replaced soon? Have you purchased quality that will last a long time or skimped because you …