Want to build quick value in your business? It might be time to consider how you can leverage technology to create business value for your organization. There are several ways to evaluate the value of your business. By updating your technology, you can build the value of your business very quickly. Many business consultants fail to include a focus on technology opportunities. We work closely with business exit planners to consider what how to add value by leveraging technology.
One method businesses can be valued is by it’s EBITA (earnings before interest, taxes and amortization) which is then multiplied positively by certain variables.
As an example, one variable is:
The ability of the company to meet some growth with current plant and equipment”
For many businesses, the current plant and equipment includes the data center and forget that servers don’t last a lifetime. As a result, they forget to put their servers, routers, workstations and software on a depreciation life cycle. (A server has a useful life of approximately 5 years.) This is important when selling a business since it is evaluated by the present plant equipment which may limit its potential for growth.
What to consider:
When evaluating the servers and the server systems, if you are hosting those system with a good COLO, the value improves. When you look at a cloud provider, it is basically a COLO which gives an added benefit for the seller of a business. When evaluating the scalability of plant equipment in the cloud, it increases the multiplier of the EBITA and which also increases the value of the business.
Contact us here to find out how we can add value to your team and grow your EBITA.