Sustainable Value; Business Valuations and Business Brokerage

The creation of sustainable value or a sustainable competitive advantage is the key to increasing business value and simplifying your business brokerage process.

Let me explain.  Sustainable value is business value that can be projected into the future with reasonable certainty.  Sustainable value is created when revenues and profits are based on processes or sales systems or other methods or assets that can be protected and sustained beyond simply, “working harder”.  The problem with working harder as a sustainable competitive advantage is that eventually you might slip or someone else might even work harder than you.  Working harder has a sad history of not being conveyable to the new buyer.

An example of  sustainable competitive advantage and sustainable value is the home computer printer industry.  Computer printers for home (and many office versions) are sold very cheaply because the profits will be made selling refills.  Those printers that have been sold guarantee that a certain amount of print cartridges will be sold at a very high profit.  This is one form of sustainable competitive advantage and sustainable value.

We advise every business owner to look at their business and determine what their sustainable competitive advantage is or could be and then to develop it.  Through years of valuing businesses and selling businesses as a business broker I can assure you that having a sustainable competitive advantage will make your sales process easier and generate a higher price for your business.

Gregory Caruso, JD, CPA, CVA
Harvest Business Advisors
Business Valuation, Business Brokerage
Princeton New Jersey, Columbia Maryland
gcaruso@harvestbusiness.com