By understanding your valuation drivers, you can start to understand how potential partners or buyers will value your company.
- Emerging Service Offerings: If you are in the following spaces, your business will be very attractive to buyers:
- Automation Contracting
- Energy Efficiency and Sustainability Consulting
- Electrification Contracting
- Mechanical Contracting
- Renewable Energy
- Energy Procurement
- Demand Response
- Utility metering
- Strong Operating Margins: Examine your margins as a percentage of your revenue and understand how your company is trending.
- Strong Revenue Growth: Know your year-over-year revenue growth. Is it expanding?
- Recurring Revenue: Does your company have recurring, predictable revenue?
- Customer Type: Buyers want customers that have high barriers to entry
- Will Ownership Stay with the Business: If you want to exit, sell your business before you want to exit!
There are many factors that can dictate your business’s value. The above list is a good start to think about how to value your business.