I interviewed the always insightful Dr. Chris Young to better understand how business owners can increase the value of their businesses.
Yes, mastering the facts and formulas is important, but increasing value is also about harnessing the power of core values like trust, transparency and integrity. Buyers and valuators routinely use these to size up a business from a risk analysis perspective.
Dr. Young also spoke to us about the “Porter Five” – a five factor model developed by Michael Porter in a classic Harvard Business Review article to determine the attractiveness of a company. Contrary to popular belief, value is not all about sales … it’s also about things like how easily substitutable your product is, the bargaining power of your clients and suppliers, and the level of rivalry among competitors. Developing a truly unique value proposition and not being too dependent on a small number of clients or suppliers are strategies that should be top of mind for business owners – and which can increase a business’ value irrespective of sales. Check out Dr. Young’s tips to increase valuations in this short video (the full interview is in the Fit to Exit program.)