1. Building the niche

All buyers of companies look for the seller who has carved out a powerful niche in which to do business. The focused niche player has strong margins, is more profitable, and has greater barriers to competitive entry.

A+ companies have overall profitability in the range of 18 percent plus, as a percentage of sales, and sometimes go as high as 25-30 percent. They are often dominant players selling their products in their particular focused market - and they usually offer some products no one else does. They typically have a defined business category which they understand well - and this gives them the ability to be first with the changing technologies and trends deemed desirable in their business segment.

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By: Deborah Douglas, Vistage Speaker and President of Douglas Group, a private investment banking firm