Can Proper Market Positioning Increase Your Company’s Value?

We’ve been talking about two things simultaneously for the last few days: the value of a company and exit strategies or selling a business. They tend to go hand in hand as any value built into a company translates directly into its valuation. Even intangible things like employee morale, or perceived value play into the value of your company. What about an intangible like market positioning?

 

Market Positioning and Company Value

How you position your company has long term and lasting effects. Believe it or not, it affects your business immediately and in the future. Position your company incorrectly or in the wrong market and you may not have a business for long. Set up your company in a market that is viable with lots of room for growth and change and you may be able to change your position without ever losing your market. A vast market and the correct positioning can make all the difference between frustratedly running up against the same barriers over and over again and being able to transition your company into more viable markets or streams.

 

Ideally, you can set your company up to either specialize or generalize in a market and that can carry you and your business for the duration of your company’s life. Specializing and generalizing carry with them their own risks and rewards that translate through a market and your positioning.

 

Specializing

It might feel like pigeon-holing your company, but choosing to specialize means that your company will be the go to when other companies need that specialized work. Plus, you can charge a lot more for your time because there is no where else to go. If you are in a larger city or metro area, specializing can be extremely lucrative.

 

It can mean being the go-to company for everyone who requires your specific service and an seemingly unlimited, and that can be a massive market to position yourself in. It can mean long term contracts and retainers with successful businesses not only in your immediate area, but across the globe if you are specialized appropriately.

 

You can think of specializing in medical terms: a doctor who specializes in a certain type of disease, may not always be in high demand, but when they are in demand, people are willing to pay lots of money for their expertise.

 

One pitfall is that if you specialize in one area and a technology you use, take the printing press for instance, becomes out-dated without you being on the next wave of technology, your company can fold quickly.

 

Generalizing

Generalizing can help you stay relevant through many shifts in the market and changes in technology, but it does mean that you can’t necessarily charge as much for your services. Unfortunately, you cannot be an expert in everything, it simply doesn’t work that way. However, generalizing does mean that you can consult many different customers and other businesses in a variety of markets and you can position yourself in many markets.

 

It can be safer to be broad, it can be easier to pivot and change and adapt to different climates, but it also means that if folks are looking for experts and specialists, you might not be able to offer them what they need.

 

One of the best ways to generalize is to generalize in specifics. What this means is that you hire specialists in different fields so that your company, on the whole, is generally based, but you have the means to fulfill special needs. This works exceptionally well in smaller markets where companies more or less have to be everything to everyone – where a handyman is better positioned than a house painter or a plumber specifically.