07 Feb Three more things that make your business more valuable than your industry peers
Your industry partly determines the value of your company. Nevertheless, there are major variations in valuation for companies in the same industry. By analyzing the data you can find at least ten things that will make your company more valuable than your industry peers. Last time I wrote about two of them. Here are three more.
3. Growth – Buyers looking to accelerate their top line revenue growth through acquisition will pay a premium for your business if it is growing much faster than the overall industry.
4. Buzz – Tired old companies often try to buy sex appeal through the acquisition of a trendy young company in their industry. If you are noticed by the trade media in your industry sector, expect to get a premium acquisition offer.
5. Location – If you have a great location with physical characteristics that are difficult to replicate, you’ll attract buyers who are interested in your location as well as your business. It’s easy to visualize this in the restaurant industry (imagine an oceanfront restaurant on a strip of beach where the city has stopped granting new licenses). If you are an IT managed service company, your location may be attractive because you are in a major market, or perhaps you are in a secondary market where there is less competition. Either way, you might be attractive for a certain strategic buyer that wants to enter your market. If you are a software company, an attractive location may have more to do with the availability of qualified employees and an attractive environment and lifestyle for personnel.