Business Valuation Blog | Understanding Buying / Selling a Company

Understanding The Key Variables that Make Your Business Successful

Posted by Business Valuation Specialists LLC on Dec 19, 2022 7:30:00 AM

Business Valuation Success Factors

Each company within every industry has certain key factors that determine and drive the success of the operation. It is therefore important to take a deep dive into yours and understand exactly what those variables are so you can continue to maximize the positive impact these have on revenues, costs of goods sold and operating expenses.

What parts of your business are making the biggest difference to your bottom line?

Consider the following:

  • Marketing variables such as website optimization, social media messaging, or a strong sales team.
  • Unique product offerings that may create higher margins than your competitors and allow you to provide customers with better pricing.
  • Client communications that are consistent and effective.
  • Commitment to timely delivery of your products and services.
  • A strong market reputation based on decades of experience, expertise, and proven results.

It might be a combination of these variables or something even more distinctive that creates the value added that separates your business from all others in your industry and specific market niche.

Once you, as the business owner or executive, have a good understanding of what these factors are, you can discuss them in detail with service providers and consultants such as your accountants, financial institutions, and investment advisors. You can also share them with outside consultants such as business appraisal professionals and brokers who will work with you closely to develop the documentation necessary to exhibit the level of financial value your company truly supports.

Some key variables may not be readily apparent on balance sheets and financial statements so it is vital to create a way to break down the numbers further and make adjustments that can be supported in a more detailed analysis. By carefully explaining all these factors to those who will, in turn, independently and reasonably verify them, you will afford yourself the best chance to translate them in a more tangible way that will be obvious to those who will take an interest in your business down the road.

Topics: Business Valuation, success, factors