From the monthly archives: January 2013

We are pleased to present below all posts archived in 'January 2013'. If you still can't find what you are looking for, try using the search box.

Create Barriers to Competitive Entry and Increase Business Value

Understanding a company's competitive position is an important process in determining business value. Therefore, a business owner who is considering a sale should understand what can be characterized as moat.

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Add Value to Your Business with Systems and Brand

How is your business perceived by your target market? What unique attributes do customers and prospects associate with your business? Is your business name trademarked? Are your logos or other intellectual property protected? Companies are not only recognized by their products or services, they can be identified by their logos, signs, commercials, or theme songs. These all represent your brand and are valuable. As a matter of fact, McDonald’s brand does not appear on the company’s balance sheet, even though it is estimated to account for about 70 percent of the firm’s stock market value. Just as your product or service needs intrinsic value in order to sell it to the end user, your business needs distinct attributes in order to sell it in the business-for-sale marketplace.

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Design a Growth Plan for a Premium Purchase Price of Your Business

Potential buyers who are considering the purchase of a business are interested in knowing how it can be grown once they bought it. The growth potential of a business plays a major role in its value. While buyers will purchase a business at a price predicated on current and historical cash flows, their main motivation is the opportunity to grow the business beyond its current size.

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Human Capital Risk and its Impact on Business Value

A stable, skilled, quality workforce is one of the top value drivers that contributes to the purchase price of a business. Therefore, when a business for sale is being evaluated by a prospective buyer as a possible candidate for purchase, the quality of the human element will be considered. The staff is a major component and the backbone of any successful business operation.

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Diversify Your Customer Base: Increase Business Value

When selling your business, it is important to know that your customer base has a major impact on its value in the marketplace. A diverse customer base means your revenue comes from a number of clients or customers, not just two or three, and preferably comes from multiple sources other than your primary service.  Simply put, the more customers contributing to your sales revenue without a few dominating that figure, the more valuable your business will be. Why? Because it reduces the risk of serious cash flow issues if one or more customers do not stay under new ownership.

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