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Get Top Dollar for Your Business: Ignore Sales and Profitability

Posted On - 21/10/2016 07:48:44

Don't assume others will prize your business - it could only have value for youDon't assume others will prize your business. It could only have value for you. To make your business worth paying for it has to be attractive.

Last week we discussed how that's done through customer data. Being able to put your finger on who they are and what they buy is something others will pay for.

But that's just the start. This week we turn to something else that creates value – knowing how those customers spend and what that means for what they will.

Surely it's what, not how?

Sales and profitability matter – no question. Bigger numbers add to the price your business will get. But what customers have already spent is just that: it's previous, it's happened, it's gone and it's history. Sure, past performance may point to the future. But that's all it does. It can't guarantee it.

Of course, nothing absolutely can - nothing can set the future in stone. But it can be made more certain - a lot more in fact. That's if your customers have agreed to spend but just not yet. That's if you know how they're going to spend and not just what.

Reliably dependable

Buyers want to know your business will make them money when they own it. It's not they intend to put their feet up and watch the money roll in. This is about assurance what they're buying is sound and not ready to fall apart the moment you hand over the keys.

So how can you give that certainty? You do it by showing them they're getting sales they can rely on. By showing them they've already got customers who'll spend in the future. You have to be able to prove they're buying dependable income. It's a crucial part of making your business worth more.

Durability

Dependable revenues are reliable – that's certain. It's a characteristic buyers like of itself. But they also like how it protects against seasonality. Those dips in the IT trade every summer and around New Year. Not only that, they like how dependable income cushions when times are tougher. Should customer's purses get tight, it'll buoy business and help tide things over.

It's no wonder buyers like dependable income. Predictable sales that don't hinge on time of year nor customers feeling flush. Stuff that makes your business tougher and more resilient. Buyers will pay for that.

Hand-to-mouth

What is this dependable income thing – what does it look like? Well, what's the difference between ad-hoc sales and planned, reliable trade?

Look at it like this and you'll see the answer's staring us in the face. It's maintenance and support contracts. Set services provided for a set period of time at a set price. Predictable arrangements - commitments - generating certain income. They're often seen the preserve of B2B services. But they aren't.

Maintenance and support contracts can be set up with consumers – we know businesses that do it. If you sell B2C don't discount them. They're real and they work. And they have unexpected and surprising benefits too. Additional benefits that add even more value to your business. See "The Pied Piper of IT" for an example of a small IT business that does just this..

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