If Starbucks raised the price of a cappuccino, sales most likely would not be affected. If your attorney raised his or her hourly rate, would you switch law firms?  If a company or service firm does not have pricing power, then its value is less than it should be. Here are a few ways to develop or increase pricing power:

Valuation of private companies is much more subjective than public companies because there is no free trading marketplace for the private companies’ stock.  Take a look at the following check list – see if the target company rates near perfect (on a scale of 1 to 10 – 10 being best):

Providing a business valuation is more than just analyzing financial statements and records.  Although the process is complex, the first step is to gather the necessary information.

Too many company owners use some rule of thumb based on sales.  There are so many variables of how sales (and subsequently earnings) are generated that no two companies are ever alike.

Considering selling your business? Just want to increase the value of your business? Here are some areas to look at that can fairly quickly increase profits, which are, after all, a main building block in creating value.