When buying a business, one of the qualities buyers look for is barriers to entry. The harder it is for someone to get started in your industry or take away your customers, the bigger the barrier. The ability to demonstrate a defensible competitive advantage can increase your business value.
Warren Buffet talks about defensibility as “widening your moat.” The idea of a moat refers to how well your company can keep competitors at bay. Buyers see long-term value in wide moats. The better the moat, the greater confidence the buyer has that your cash flows won’t fall to competition over time.
