As a Private Equity investor in restaurants, the goal is to maximize firm value to generate a significant return on investment. Yet many PE firms bring outdated revenue optimization strategies to the restaurant businesses they acquire, hindering value creation.
Why do we call pricing strategy the “iceberg” of business value? We are talking about the highly leveraged effect that top line pricing strategy has on the bottom line of a company.
Increasing the value of your private equity firm’s portfolio can be a complex endeavor. There are multiple levers to be pulled such as financing, product/service fit, human capital, etc. Yet one area of high EBITDA leverage that is consistently overlooked is pricing.
