Each day, I work with clients on profitably scaling up their companies by developing a unique strategy that focuses on high-payoff activities so they can execute efficiently, develop their workforce and always have enough cash to invest in their growth. I also work with owners and management teams that are looking to sell their companies or acquire a company. I am always focused on ways to create real value.
By “real value,” I mean value that customers are willing to pay for, bankers are willing to lend to, people are drawn to work for, and buyers are willing to pay good money to acquire. And yet, “value” is one of the most misunderstood words in business today. Ask 10 people what it means, and you’ll get 20 different responses. And whether you’re working on profitably scaling your company or preparing to buy a company or sell yours, there are some particularly important and basic activities you can do that will create real value.
In the ever-changing world of business, the concept of value stands as both a guardrail and a cornerstone for success. It goes beyond financial gains incorporating a range of attributes that strengthen a company’s position, sustainability and desirability. To really understand value, we must look at both its tangible and intangible aspects.
Financial value is straightforward. It’s the monetary worth of assets, revenue, profits and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) that can be quantified and evaluated. This is the value that shareholders often prioritize, as it directly impacts the valuation (worth) of the business. Qualitative value is equally important. It includes reputation, name awareness, brand strength, customer satisfaction, strength of the team and a strong and unified culture. And what really escalates value is the uniqueness of a company’s strategy, business models and processes that propel the business forward.
To clarify what constitutes real value, we should consider the diverse perspectives within the erosion control and environmental sectors and how value can be defined in terms of both environmental contributions and economic viability. It may seem like common sense (there’s nothing common about common sense), but if you want to generate multi-faceted value you should focus on investing in sustainable practices and services that safeguard the environment while delivering high margins. Not all practices and services are created equally when it comes to margins.
It is essential to spend as much time with customers to understand what they value so that you can enhance their experience by making it easy for them to collaborate with you. Then you can deliver the exceptional service and engagement they expect and need. The more time you spend with customers, the easier it will be for you and your team to innovate continuously to stay ahead in the market and meet evolving customer and regulatory demands. This innovation will also help to foster a positive organizational culture that motivates and retains top talent. Maintain transparency and ethical standards to build trust and credibility with all stakeholders.
Ensure you have the talent and skillsets inside and outside of your organization to build relevant and robust fiscal management systems that ensure cash flow, profitability and growth. As such, develop strong networks and relationships with financial partners and stakeholders, as well as the local community. With these partners, develop and implement efficient, high-payoff operational processes that reduce costs and increase productivity. And wherever you can embrace technology and artificial intelligence to streamline operations and offer innovative solutions, do it.
Focus on short- and long-term strategic planning to secure future success and adaptability. These steps not only create financial and qualitative value; they also underscore a realistic definition of value.
That definition will resonate with key stakeholders in the erosion control and environmental industries who are committed to ecological stewardship and sustainable development.
About the Expert
• Judith M. Guido is the chairwoman and founder of Guido & Associates, a business management consulting firm in the erosion control and green industry. Guido can be reached at 818.800.0135 or judy@guidoassoc.com.
