Unique Factors that Enhance the Value of a Business

In today’s competitive marketplace, it is important to distinguish yourself from similar businesses. Carving out a unique niche within the market not only makes a business more profitable, it also increases its value when it comes time to sell. Business Valuation

There are several attributes that make a business unique and more attractive to potential buyers, here are five of them:

Identifiable Brand: Though most small businesses will never have a product or service with a brand as recognizable as Coke or Pepsi, it is possible to establish your name in the local community. This typically occurs through building a reputation of delivering an exceptional product or providing an exceptional service over time. Whatever consumers think of when they see your name or logo somewhere (good, bad or indifferent), that is your brand. Building and protecting a positive brand is among the most important factors for businesses of all sizes.

Strong Position in the Market: If you build a positive brand and have an effective marketing program in place, strong market share is likely to follow. If you do not believe you are capturing as much of your target market as you should, it is time to examine your advertising and marketing methods and identify ways to do it more effectively and efficiently.

Loyal Customer Base: Customer acquisition is one of the largest expenses for a business, and this is why customer retention is so important. Whether you have a transactional or residual business model, it is much better to have a large base of loyal customers that are already sold on your brand than to continually ‘churn and burn’. Of course, you always want to be adding new customers/clients, but your business is far more valuable if you have a large customer base you can rely on.

Competitive Pricing: Having an outstanding product or service offering is great, but being able to deliver it at a competitive price is even better. With all the creativity and technological advances out there, it is definitely possible to offer lower prices without sacrificing quality. Look for ways your business can be more efficient, including technology upgrades that can help streamline workflow, and you will likely identify several opportunities to increase operational efficiency.

Limited Competition: The ability to limit your competition through proprietary products, unique and strategic partnerships, licensing requirements, etc. can be a major advantage for your business. For example, if your business requires a professional license, such as with a CPA firm, you know that only other licensed professionals can compete with you.

If you have at least three or four of these five attributes, your business is likely to attract strong interest from prospective buyers. If you are serious about selling, speak with a business broker, particularly one with specific knowledge of your industry. A reputable business intermediary can help ensure your business is exposed to the widest network of potential buyers, and this increases your chances of receiving top dollar.

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