When it comes time to finally sell your business, you’ve worked hard for it, you’ve worked hard in it and you would like to see the best possible price for it.
However, most business owners don’t do the work necessary in order to get the maximum possible sale price for their business.
The real value of a business is almost entirely in its list. I mean if you want to sell your business for more than the sum of its parts.
I have a very close friend who built up and sold a business that delivers meals designed to help you lose weight to your door for the week. He sold that up a few years ago and was paid out handsomely. He told me recently that it wasn’t until he delivered his customer data on a USB to the buyer and saw how excited they looked that he realised just how valuable customer data is.
They didn’t care about his ordering software… his high tech delivery routing program… anything to do with his location or how it was fitted out. All they wanted was the customer list.
This isn’t isolated. There was a magazine that was targeted to farmers, but they didn’t allow advertising. It was very popular and a lot of companies wanting to sell to farmers wanted to be advertising in that magazine. The song and dance went on until the one of the companies cracked and bought the magazine out for seven times its earnings.
There is nothing more valuable in your business than your customer database and your relationship with it – well actually it is the results of that relationship that is so valuable, the customer loyalty and the referrals. To create a relationship with your customers requires investment and a system.
The system is the key part. Systems are what are valuable in business. It means that whoever buys your business will be able to use the same system and get the same results.
“Creativity is over-rated. Most business success comes from doing boring, diligent work. From developing a system that produces consistent results and sticking to it”
Ray Kroc. (The man who built McDonalds into the most successful fast food operation in the world.)
It is this boring work that is the key to business success. Developing and continuing to implement systems to achieve the outcomes you want. In this case building and maintaining a strong relationship with your customer list so that they will continue to buy from you and refer new customers to you.
The systems you create mean that you can sell a future revenue stream. That means you are in effect selling money at a discount. You buy my business for X and you’ll be almost guaranteed to get your money back in 5 years – less if you do the work to grow it… Or something like that.
That is the power of creating systems to maintain and grow the value of your most important asset in business.