3 Ways to Increase Your Company’s Value
June 6, 2018
By: Sean Mooney
After nearly 20 years in private equity, I appreciate how hard it is to build and grow businesses in a constrained environment. Nothing is easy, but most things are possible with the right people and resources.
Top private equity funds regularly ask us about ideas to help drive growth and reduce costs. Here are a few growth, organizational development, and cost reduction strategies that can be applied to build your business and drive value creation:
Reach 1,000s of customers at a click of a button: Digital marketing is the most underused tool in the middle market: every business should be doing at least the basics (particularly in underutilized B2B markets). This starts with good data (you should think of this as a business asset), requires market segmented content, and systems capabilities. It’s really hard, and expensive, to internally be good across SEO, paid search, content, email, PPC ads, etc. You should outsource this to a middle market agency who will do this better and at lower cost than you can. Committed digital marketing programs can lift revenues by more than 20%.
Rent “A” Players: Sometimes it’s better to rent 10% of a bunch of A’s rather than own 100% of the B or C you can afford in your budget: the future of work is now (just ask some of the best younger workforce members who won’t work full time). There are great variable resources that you can use across the functional areas of your organization to more optimally inform strategies and execute on your plans. Use them. Plus, if it is a one-time project, you often can get an add-back for it, enabling you to present stronger numbers when it comes time to sell your business.
Your costs are rising, you should be fighting it more: In the current world climate, all sorts of input costs are on the rise, from metal to plastics to fuel. Most companies (including very large ones), don’t have the internal expertise or the free resources to understand and aggressively combat today’s volatility. Bring in a specialized procurement group that lives and breathes in these markets to reduce costs, diversify supply chains, and/or hedge risks. While you’re at it, go after your indirect spend. If you’re not ready for a procurement group, at the very least you should be using plug and play Group Purchasing Organizations (GPOs). Expect some push back as the savings can be embarrassing and/or preemptively tap into rainy day savings buckets. However, when you apply a valuation multiple to the savings you’ll achieve, these tools are no-brainers.
Finding the superior groups isn’t easy. BluWave seamlessly connects you with the best vetted and private equity tested practitioners that specialize in your areas of need and fit your budget. We also make it remarkably easy on you: we don’t charge you anything to use our service.
Start talking with us about your needs today. Help is a call or email away.