Around the Web: A Week in Summary
A recent Divestopedia article “What Drives the Value of Your Business?” goes in depth about what it means to build value in a business and why it is important to understand your organization’s “value drivers” so that you can build and drive this value. Using an analysis of your business’ strengths, weaknesses, opportunities and threats, you can find the most important sources of value for your company, and in turn, exploit them.
The article outlines eight of the most common and important value drivers for any given business, including financial history, management depth, customer diversity, owner involvement, and competition. These are huge for any business and can all be used to examine the background the company has in the marketplace. These value drivers are centered around the fundamentals of the business and its management, which can help determine and drive value dependent on how the business performs in these areas.
Also included in the list of value drivers are customer satisfaction, employee loyalty and the presence of proprietary technology within the business.
These eight factors, along with others, are important pieces of the business valuation puzzle. When it’s all said and done, driving positive value in several, if not all of these areas and more will net you the highest valuation for your business.
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A recent article in The Herald Express entitled “Ask the agent: Is it time to sell my business?” outlines the thought process an owner goes through before deciding to sell their business. Whether it’s burnout, a new opportunity, or poor business performance, an owner should have a good idea about when the right time to sell is. Having a strategy but also having patience are two of the most important factors in being ready when the time comes: maximum value comes from a well-thought out plan ahead of time as well as the patience to wait out the sometimes long, time intensive selling process.
Selling price, however, is often considered the most important aspect of a business transaction. As a seller, knowing your ideal, compromise and walk-away prices are crucial pieces to a good selling experience and give you a great measure of value during the process. Selling price is determined by several factors, from financial performance and scalability to having a reliable income stream as well as a “wow factor” among your customers.
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In a recent article in Black Enterprise entitled “What You Need To Know Before Buying a Franchise,” the author goes into detail about why a prospective buyer shouldn’t necessarily seek out franchises that are trending. The article states that it is of utmost importance to find a franchise that not only has a good outlook, but also one that works for them. Often times buyers are looking for what’s hot and trending, but fail to consider the fact that it may not be a good personal fit for them. Sure, explosive growth may seem appealing in one industry, but the author argues that there are so many opportunities available that you may find a better fit in a different industry that requires less capital and time investment – that is why shopping around and finding a franchise that best fits you is the best strategy.
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