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How do certifications, awards & recognitions affect the value of my business?

What do certifications, awards & recognitions say about my company?

The Value of Certifications, Awards & Recognitions

Posted by Jeff Muir on 26 January 2016 | Comments

Value, both tangible and intangible, can be created and enhanced by differentiating a business from its competitors and within its industry.  Certifications, awards and recognitions are among the ways a business can standout to a buyer.  Be sure to note the importance of the business being recognized, not the owner or an individual employee.  Buyers are interested in the legacy of the company, more than the accomplishments of individuals.

Certifications like ISO 9000 demonstrate a company’s ability to meet an accepted industry standard.  The certification provides the buyer with a third party seal of approval for meeting or exceeding an expected standard, which increases a buyer’s comfort with the company.  Similar to a unique product, achieving a certification not widely shared by competitors is another way a company differentiates itself.

Awards and recognitions, especially from key suppliers and well known customers, are another objective way to provide buyers with comfort that the business is well thought of in the marketplace and thus has intangible value beyond the P&L and balance sheet.

For example, A&A Manufacturing is a highly profitable company with a well- managed balance sheet.  The owners are properly proud of the quality of their product and their relationship with long term customers like General Electric.  Buyers interpret the financials and hear the stories from management but there is always fear that customer relationships are tenuous.  Providing a substantive example of A&A’s relationship with GE, like the 2012 Supplier of the Year Award, eases that fear.  The award also suggests that the relationship is not all about price; job quality, order accuracy and on-time delivery are being recognized as well.

Demonstrating accomplishments from objective sources where the whole organization did their part can enhance the perception of the company in the eyes of a buyer and result in greater transaction value.

 

If you are interested in learning other ways to increase the value of your business, The Art Of Business Value Enhancement is a Must-Read!  Click here for more information.