02 FEB AROUND THE WEB: A WEEK IN SUMMARY
A recent Divestopedia article “What Drives the Value of Your Business?” goes in depth about what it means to build value in a business and why it is important to understand your organization’s “value drivers” so that you can build and drive this value. Using an analysis of your business’ strengths, weaknesses, opportunities and threats, you can find the most important sources of value for your company, and in turn, exploit them.
The article outlines eight of the most common and important value drivers for any given business, including financial history, management depth, customer diversity, owner involvement, and competition. These are huge for any business and can all be used to examine the background the company has in the marketplace. These value drivers are centered around the fundamentals of the business and its management, which can help determine and drive value dependent on how the business performs in these areas.
Also included in the list of value drivers are customer satisfaction, employee loyalty and the presence of proprietary technology within the business.
These eight factors, along with others, are important pieces of the business valuation puzzle. When it’s all said and done, driving positive value in several, if not all of these areas and more will net you the highest valuation for your business.