Knowing How Your Business Compares
We have talked about knowing the value of your company and why it is important to know it in many previous articles. In general, the value of your business can be obtained by many ways, one of which is assessing the following benchmark grid. Moreover, completing the table will help owners get a real idea of how their businesses compare to the ones of their competitors.
|Business Growth||Low||Steady||High & Steady|
|Market Share||Small||Steady Growth||Large & Growing|
|Profits||Unsteady||Consistent||Good & Steady|
|Management||Under Staffed||Okay||Above Average|
|Customer Base||Not Steady||Fairly Steady||Wide & Growing|
|Litigation||Some||Occasionally||None in Years|
|Sales||No Growth||Some Growth||Good Growth|
|Industry Trend||Okay||Some Growth||Good Growth|
Business owners are encouraged to be creative with the value drives and are suggested to compare themselves against specific competing business, not just businesses in general. The above table can also help sellers pinpoint areas that could use further improvement (as part of exit strategy).