Grow Your Brand Value

With the economic recession, every vendor and solution provider is talking
about adding value to solutions in order to churn out maximum benefits. Experts
are talking about increasing the visibility of a company through branding and
strengthening the solution offerings.

But it is imperative that they strengthen the value of not only the solution
they provide but their entire organization as a whole. This is what Sanjiv
Bhavnani of Vishesh Infotecnics touched upon during his presen­tation 'Building
valuations of your business' at the SP Summit.

He first explained what is valuation and how it is deter­mined, saying
“Valuation is the sum of tangible and intangible assets, sans liabilities.
Tangible assets include cash, receivable accounts, inventory and real estate.
Intangible assets include brands, IPR, copyrights, trade­marks, patents,
licenses, franchises, customer lists and goodwill while liabilities includes
creditors, loans, taxes and other provisions.”

He further defined valuation as the multiplication of revenue or a seller's
discretionary earnings (SDE) into valuation multiple where SDE is defined as net
income before the primary owner's compensation, other discretionary,
non-operating or non-recurring income or expenses, depreciation, interest and
taxes. Valuation multiple include factors in industry, market share, intangible
assets, historic growth, etc.

Speaking further on improving valuations, Bhavnani described various stages
of a business including at the level of start-up, small business, medium
business and large business. Elaborating further on the elements required to
increase the valuations, he said, “Start-up businesses require seed capital to
back their sound and innovative ideas; while small businesses require vision,
clients, partners, experienced management, capital and a business strategy to
grow their business. Medium business require a sound story board and reputed
management team to attract private equity and plan IPO and large business
require advice on key areas of performance improvement and looking at inorganic
growth through merger and acquisition or overseas listing and fund-raise.”

Proceeding with his presentation, he shared his views with solution providers
on designing a business concept where one should understand the strengths and
market, build the story board, gather his management team, work out a winning
strategy, put milestones to the road map, allow for changes due to feedback and
keep the stakeholders involved.

Amrita Tejasvi

amritat@cybermedia.co.in