Getting piggy ready for market
We’ve all heard the phrase “fattening up piggy for market”.
Pig farmers have a strategic choice to make about the market they are selling into (the bacon market, the processing market or the fresh pork market). These markets fluctuate over time with the farmer needing a return on investment analysis to help him make a choice. This choice, once made, will determine when to sell the pig, what to feed it and how to house it. In other words, the farmer adjusts his tactics to match his strategic choice and the pig is developed to be fit for purpose
So how does this relate to your business? The pig farmer understands the importance of strategically positioning his product so that he achieves a premium price. In our experience, most business owners look at and market the value of their businesses in a very linear way, i.e., EBIT (Earnings Before Interest and Tax) times a certain multiple (say 2-4 times) which is very limiting strategy.
We often find that business owners will focus on maximising current net earnings (call that a higher EBIT), rather than investing in other areas that will command a premium from buyers. We take a different approach; by focussing on the factors that affect the multiple, we enable you to create a more valuable business. Oink, oink!