It is vital to define who your Most Important Customer is, and then structuring your business to focus all of your actions on attracting them.
So… who is Your Most Important Customer?
The person or company who will one day BUY YOUR BUSINESS from you!
Why is Your Most Important Customer so important?
Regardless of the age or size of your business or the quality or growth prospects of your business, one day you will receive an offer from someone to buy it. That offer may be actively solicited by you or it may come as a big surprise, and it may be from a customer, a supplier, a competitor, an employee or a person or company completely unknown to you.
When you sell, you need to obtain maximum value for your business. The best strategy to achieve maximum value is to focus your sights on that faraway (or very near) horizon of selling your business. By focus, I mean laser light precision, everything you do or don’t do in your business must be 100% directed at obtaining maximum value when you sell your business.
Every customer who buys your products or services is also vitally important to you, as those sales build the value of your business (and one of them may just be Your Most Important Customer). But you will always obtain the maximum amount of cash from Your Most Important Customer.
What’s Your Maximum Value?
Your maximum value is the Minimum Price that you’re willing to sell your business for. Start by defining how much you will expect someone to pay for your business if you sell it next month, in 1 year, in 3 years and in 5 years. Do a bit of star gazing in setting your goals!
Then determine what your business is actually worth today – to do this you can call Martin Dabb ph; 0458 290 100 (Perth) or Email Me and I’ll provide you with a formal market appraisal of the value of your business. This service is FREE.
Your Current Business Value Matches Your Minimum Price –> What Now?
Great – you’ve received your formal Market Appraisal and the value matches or exceeds your minimum price. You’re now ready to decide whether to exit now and achieve maximum value from Your Most Important Customer. If you decide YES, than I can discuss with you detailed strategies and tactics to identify and capture Your Most Important Customer.
You may, of course, decide to increase your Minimum Price, and in that case I can assist you in further maximising the value of your business.
Your Current Business Value Is Much Lower That Your Minimum Price –What Now?
1 – SELL NOW AT THE BEST PRICE POSSIBLE
If you still need or want to sell, we will need to work with you to extract as high a price as possible from a buyer. This is an interesting process and does not simply mean you should list your business for sale today. We will first explore various options with you, such as selling to employees, suppliers, key customers or competitors – they are the groups of prospects who may perceive higher value in your business than the general public would.
We’ll also explore with you different strategies such as franchising and licensing your intellectual property.
It will also be important to seriously consider offering some Vendor Finance. This is becoming far more common and definitely helps extract maximum value from Your Most Important Customer. It is also far safer than your neighbour or friends will tell you, as the appropriate legal agreement and financial security documents will be put in place.
Such agreements often also provide you with a share of future profits – so even if there is a shortfall today between Minimum Price and the business value, you could easily bridge that gap with the best structured earn-out agreement.
2 – WAIT AND START WORKING NOW ON MAXIMISING YOUR BUSINESS VALUE
Great, you know the minimum price you’re prepared to accept. That means we can determine the profit that your business needs to be achieving, and we can then prepare for you a comprehensive action plan to help you reach that profit level.
Read more on our Detailed Business Growth Services page.
Call Martin Dabb ph; 0458 290 100 (Perth) or Email Me to discuss any issues or questions related to selling your business or reaching your maximum business value.