A year’s extra profit for nothing!
The value of customer data and why customer data is important to your business.
Many walk-in businesses cannot use bookings systems and do not track their customers. They rely on great service, convenience, and personality to keep customers coming back. This has been a perfectly workable business model for 100 years but it does affect the value of your biggest asset, your business.
When establishing a business, owners step above the rest and take a risk. They have found a location, signed a lease, after fitout and staffing costs, taxes and compliance costs – we sometimes wonder if the risk is worth the reward. The business is an asset, to be sold for retirement or passed onto the family or staff and it should be seen and treated as an investment. It is easy when looking at a business to “spend time IN the business, not ON the business”.
Most business are valued on a simple model eg 1 X Revenue or 3 X profit. The challenge for a purchaser is how many of those clients are regular? What % will I loose? How many are return clients? Can I improve on the business to get a better return on my investment? It all comes down to risk for the buyer. If you can lower the risk for them the value of your business increases exponentially! All you need to do is change the valuation multiple by 1 and you have a year’s extra income.
Treat it like an asset and invest in growth to get higher rewards at the end.
Customer data and systems demonstrate your business is well established. You can provide much of the client data for the prospective owner plus statistics to answer key questions on clients and trends. Do not spend years building your business to give away your hard earned money!
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