Technology and the value of a business
A survey was recently released by BizBuySell that asked business owners if they believe the new disruptive technologies such as Amazon, Uber and Airbrb affect the value of their business.
One of the results of the survey showed that nearly 40% of business owners consider new technologies affecting their business value.
The survey also asked if online customer review websites such as Yelp, Angie’s List or Foursquare were important to business owners and if they were embracing, encouraging or ignoring their customer feedback. The results varied depending on the industry with 57% of retailers concerned that online customer reviews were affecting the value of their business. The next at 46% were hotel/lodgings, 38% of convenience store owners, 36% of manufacturers, 31% of gas station owners, 27% of restaurants, 26% of auto repair shops and 23% of dry cleaning/laundry services.
It’s a given in the business world that change is constant. There are consumers that demand and will adopt the latest because that is what is important to them. In technology terms, this is called being at the bleeding edge. There are other consumers that do not want to be at the bleeding edge as they either think the price is too high or what is being offered does not currently fit into their world and so they will adopt but only after a lot of the kinks have been ironed out and the price is a little more reasonable. These are the folks on the cutting edge. You then have the rest of the market that sees the product now having general acceptance, there are other companies making similar devices and so they feel it is safe to buy that product.
The technology challenge for a business owner is threefold. The first challenge is to understand the role of different technology products or services and how it affects the product or service you provide your customers. If you are a manufacturer, auto body shop, in the construction industry or medical industry to name a few industries, you use tools to deliver your service. This seems obvious but many owners are not hands on enough to know how or why a particular product or service works and as new iterations arrive in the market, whether they need to adopt and implement it into their business or wait. Three of the key things to look for are interest from customers, what your competitors are doing and what your employees have to say. The manufacturer or supplier will always want you to adopt the latest as they want to make a sale but in the end, you need to know the impact to your business and include in your financial statements, provision to replace and upgrade.
The second challenge is to understand the products and services you use to stay in touch with your customers. New technologies are all around us at the moment with iPhones, iPads, electric vehicles, new cell phone technologies and a constant release of either new software or upgrade of existing software with new bells and whistles. Blending with all this is the evolution we are seeing in social media and how it is opening up new ways to connect with new customers and getting better and more instant feedback on what we do or what our competitors are doing.
The third challenge is bringing this altogether in your business so your business remains competitive. This includes your employees who decide they want to stay with you rather than work for a competitor who will either pay them a little more or invest in them to train them to keep up their skills. This includes your customers who are willing to pay what the market charges as long as they are getting value for money compared to what they can get elsewhere.
The final and most critical point is that you cannot ignore these innovations and changes or you will fall behind and not only become uncompetitive but unattractive to a buyer if you decide to sell your business. Many business owners rightly see all these new technologies as a cost. However, when placed in context they are an opportunity and should appear each year as an item as you make any budgets or forecasts for the business.
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