Business Valuation Blog | Understanding Buying / Selling a Company

How valuing a distribution company helps your company through digitization and disruption

Posted by Business Valuation Specialists LLC on Jul 5, 2017 2:21:00 PM


When you run a logistics business, keeping moving is just part of how things are done. But digitization and disruption are causing significant problems in all industries. Valuing a distribution company can give you the tools you need to meet these new challenges successfully and come out the other side shining. Here are some basics about how to benefit from a professional business valuation.

How valuing a distribution company helps your company through digitization and disruption

When a business is appraised, did you know that you learn a lot more than just the monetary value? That's because that final value is tied into so many different aspects of your business. A certified business appraiser spends a lot of time learning different methodologies and standardized ways of determining value based on tried and true methods. The information that appraisers include in the reports they generate can help you create a strategic plan of action for your business, whether it's how you'll operate for the next year or a longer-term vision of how your company will transition to digitization.

Digitization requires your business to be adaptable and agile, something that many distribution companies already do well. But it also requires innovation and a higher level of technology and transparency. New business models are taking advantage of the disruption of traditional logistic businesses by providing different services or options than have been available in the past. This is typically because of the new company's focus on higher levels of connectivity, data and technology.

A good business appraiser will look at where your business is strong and where it is weak. They can tell you what some of your competition may be doing and how you can keep up with the changes in the market. While you may think your business is doing well in terms of fulfillment, a business appraiser may be able to tell you how your competition is changing the layout of their warehouse to speed up the process and gain an advantage in the market. 

What about your digital resources? If your systems are older, they may not be able to keep up with the demands of digitization. A business appraiser who has experience in the logistics industry will include the value of those systems in their report, giving you a starting point to determine what you'll need to budget for upgrades or replacements during the digitization process. This allows you to start looking at the tools you'll need to make the switch.

How is your market changing? When a business appraiser performs a valuation, they have to take a good, hard look at the supply chain industry. Is your business considered an innovator in the sector? Is it known for going above and beyond in providing exceptional customer service? Do you have better resources or a more strategic location than your competition? Any of these factors can help your reputation in the industry, a reputation you can lean on while introducing new services or more flexible shipment options for your clients.

By valuing a distribution company, you can ensure that your enterprise can weather the changes of disruption and digitization successfully. A professional business valuation specialist can provide you with the insights you need in a timely fashion. Take advantage of these insights to prepare your logistics business for a beautiful tomorrow.

Topics: valuing a distribution company, valuing a distributor