Virgin Galactic shares are worth over $43, giving the spaceflight firm a market value of $11 billion. However, according to the Guardian, these shares are a third below their record high of about $63 reported in February 2021. Branson’s successful space trip was a key milestone for Virgin Galactic’s goal to launch a commercial space service in 2022. But existing shareholders are not happy with the company’s proposed plan to issue $500 million in new shares as it would only dilute its current float. In fact, the announcement of the share issue led to a decline in Galactic share prices and overall market valuation.
According to Mario Ferro of Valueline, now that Virgin Galactic has proven it can launch a successful space trip, the speculative luster among investors has faded. Ferro adds that given the company sold stock worth more than $450 million in 2020, shareholders are concerned there will be more share offerings in the future. While selling shares to boost business sounds ideal, it isn’t. You should focus on making your startup irresistible to investors without opting for a dilutive capital raise. Below are tips on how you can boost growth and increase your business’s market valuation.
Understand market share
As a business owner, it’s crucial to understand that market share is different from market size. When people talk about market share, they refer to the company’s percentage in the overall market in a specific industry. For instance, let’s say your business makes annual sales worth $1 million in an industry where the total sales are $100 million. Your market share in the industry is 1%, based on the percentage of sales method. It’s worth noting that a higher market share gives you a competitive advantage in your industry. Typically, having a high market share increases your chances of receiving better prices from vendors. That’s because your large volume of orders boosts your buying power. However, to enjoy these benefits, consider calculating your current market share and plan accordingly on how to scale up and increase your market valuation.
Maintain relevance through innovation
Spotting new trends ahead of your competitors is an excellent way to increase your market valuation. So, be attentive when chatting with colleagues, watching the news, and listening to children discuss what they like. Doing so helps you figure out how to create innovative products and services to attract customers. Also, think of how technology can transform your industry and invest in technologies relevant to your day-to-day operations. For example, you may opt to invest in artificial intelligence to enable robotic automation in various business processes.
Alternatively, you may want to adopt technological innovations by other industries that are likely to bring change across all sectors. For example, you could boost your business’s profit margins by investing in Elon Musk’s new technology, S.A.V. According to the Near Future Report, S.A.V(shared autonomous vehicles) could be the future of mobility. Ideally, leveraging this tech could enhance your company’s transportation model, attracting more investors and customers and, in turn, boosting your market valuation.
Boost customer satisfaction
Customer satisfaction is probably the simplest way to increase your valuation. Therefore, focus on satisfying your customers, especially the existing ones. Remember your current customer base creates a more significant percentage of your market share. The best way to maintain your share is to think of your customers as investments and turn them into your brand ambassadors. Offer incentives and discounts, and implement effective ways to engage your customers. For instance, you can engage customers through social media and email to ensure they feel valued and appreciated.
Owning a business involves more than managing daily operations. As an entrepreneur, you should focus on growing your business and increasing your market valuation. When you aim to boost your market share, you’re likely to generate more income and improve your business longevity. To get a high market valuation, invest in innovation, enhance customer satisfaction, and acquire competitors.