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Business Lessons from Bonsai - What is a Size Premium?

Valuation Consulting and Appraisal > News > Decision Making > Business Lessons from Bonsai – What is a Size Premium?
  • Anthony Cardiel
  • Decision Making, Valuation
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Business Lessons from Bonsai – What is a Size Premium?

Sold in November 2012 for $1,200,000. Source: Million-dollar bonsai – Bonsai Tonight

In November 2012, one of the most expensive bonsai sales occurred. The tree pictured above sold for 1.2 million dollars! My first question when I saw this was what makes a pine tree worth more than a million dollars? Let’s compare it to a 25-year-old tree for sale at Brussel’s Bonsai for a “mere” $1,260.

Source: Brussel’s Bonsai

There are a lot of similarities – they are both the same specimen of tree, have the same growing requirements, and are both presumedly healthy.

Why is one tree worth 1,000 times more?

  • Rarity – there aren’t many 200+ year old bonsai trees. A 25-year-old tree can easily be obtained online, and a sapling might be found for free.
  • A sophisticated buyer – Bonsai trees are valued on a wide variety of aesthetics. The value of bonsai are influenced by the thickness of the tree’s trunk, the amount of exposed roots, and overall size. The million-dollar bonsai sold at a bonsai convention, which attracted many bonsai experts.

Thinking about your business:

  • If you want to attract a sophisticated buyer, how big does your business need to be?
  • Will you post your business for sale online, or would you prefer it to be placed on a pedestal, highlighted and admired?

If you need help developing deeper roots for your business, growing its trunk, or understanding its value, schedule a 30-minute phone call to see how I can help!

Author: Anthony Cardiel

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