Straub Accounting LLC offers business advisory services to assist clients in the development of strategies to protect and enhance the value of their companies. To craft these strategies, I rely on the framework of business valuation to understand the internal and external environment in which entity functions.
Valuations of businesses are based upon a variety of components that ultimately shape a picture of what a company is worth. In performing valuations, I have found that a company could have been valued higher had management paid more attention to the drivers of profitability in the marketplace.
Business valuation is a complex undertaking with many steps, analyses, methodologies and applications that determine the final calculation of value. As a part of that process, I find Michael E. Porter’s “The Five Competitive Forces that Shape Strategy” useful in understanding what direction management is taking the company.
Those five forces–direct competition, customers, suppliers, potential market entrants and substitution of products in combination with the other components of business valuation serve as the basis for making sound business strategies for my clients.