I promised to share some of the ways you can build up the value of your company and this week I thought we could talk about your future. How big your company could become tomorrow has a lot to do with what someone will pay for it today.
Today’s video is about how growing your company impacts the value of your business. Savvy owners know that with all the possible ways to grow a company, you want to choose the ways that will also grow value.
Your current growth rate is important, but an acquirer also needs to know that your growth rate is sustainable over the long run. One of the best ways you can make that case is to describe all the potential ways that you can grow your business. For example:
Can you grow geographically?
Are there new markets (e.g., cities, regions, countries) you could enter? Consider new locations where your product or service would sell with minimal tailoring.
Can you grow vertically?
If your existing infrastructure (staff, machinery, office space) could handle more customers without adding too much to your fixed costs, then you have the ability to grow vertically. For instance, a 200-room hotel that averages just 75 guests per night has the potential to grow more than two-fold before its owners would have to make significant investments in infrastructure.
Can you grow horizontally?
Are there other products or services you could add to your offering that would increase the overall value of your business? When considering adding new products or services, ensure that they increase your point of differentiation, rather than diluting it.
Ready to take off the training wheels and really get a sense of how your business performs against all 8 of the key value drivers? Then, let's chat. Find a 30-minute slot on my calendar to take the next step.
Julie Edge Ph.D., is chief strategist and founder of Inside Edge Solutions LLC, a boutique strategy coaching and consulting firm serving business owners seeking less chaos and complication in their business and more thriving in their life—both personally and professionally. Connect with Julie on LinkedIn at @drjulieedge