This was created to show you how to build lots of value in your business and to free you from being a slave to it. Wouldn’t that be great?
Why do you want to build value?
Because one day you may want to open more outlets, or float on the stock market, or even sell it for lots of money.
What is the main reason you have opened your own business?
To buy yourself a job, or to run a successful business which provides you with a great income and an asset?
The idea is to create a money making machine that works without you even being there, so you can take time out for other things.
– So you can spend time with your family and mates
– So you can go on holidays
– So you can duplicate it
– So you can sell it
– How do you add value?
There are five key actions you can take to generate value in your business, and we’re going to talk about each one in detail so that you can implement them into your own business.
The Five Ways to Build Value in Your Business are:
1 Build your customer List
2 Develop clockwork systems
3 Build your brand and market relationship
4 Own your business property
5 Develop and secure your Intellectual Property
1. Establish and Build your customer list
A customer list fis basically a list of contact details for your existing clients and prospects – that is people who are likely to buy whatever product or service you’re selling. The list includes:
People who have made a purchase from you in the past.
People who have not made a purchase but have shown interest in your product/service from a promotion you’ve run.
There is no value in a list that isn’t related to the business in some way. For example, you can open the yellow pages and find thousands of people on a list – but that list has little to no value to your business.
The “value” of the list is determined by two things:
The number of people on the list.
The relationship the business or business owner has with the list members.
A customer list of 30,000 people can be virtually useless if the people on that list have no interest or use for your business; or if the people become sick of hearing from you! You develop a relationship with your list by consistently offering them something that helps them- don’t make it about YOU or YOUR needs, as that is the quickest way to alienate them.
How do you attract new prospects to your list?
There are many ways to attract new prospects to your business. Media advertising, direct marketing, word of mouth, cold calling, emails, websites, online advertising, billboards, free publicity – the list grows bigger every day.
What’s important is that you choose low cost strategies which create lots of interest from the right target market and then ensure that you have a good conversion rate. You need to be able to track and measure everything you do so you know (to the last dollar) which activities brought you the most business for the least cost.
So you can put ads in the Yellow Pages and newspapers like all your competitors and attract a lot of price shoppers, or you can differentiate yourself using some really clever techniques and achieve greater profits.
How do you maintain your client list and increase your profits?
It’s extremely important to nurture your clients when you get them.
You’ve probably worked hard to land their business in the first place, so don’t lose them. If they like what you do for them, they’ll buy more and tell lots more people.
This is the one key area that most small businesses fail in. They spend a fortune on marketing campaigns to attract new customers and don’t see the enormous value of their existing customer list. There’s a lot you can do to increase average spend and lifetime value of your customers.
There’s also some fantastically simple things you can do to get your customers working for you – bringing you more and more business.
All it takes to have a highly valuable list of loyal, highly profitable customers is a few specific marketing and customer service techniques which are easy to implement and simple to maintain.
2. Build your Business with Systems and Processes That Will Run Without You & That Fulfill Your Client’s Needs
A systemized business is one that consistently produces the same results by performing the same actions. To build value in your business, you want two main systems:
System for the delivery of your product or service. Ideally the system would be automated and not require human beings to operate it, but it could also be a system of having employees who can follow the steps without you holding their hand, so that you can leave and come back to the business and find it running the same as if you were there.
System for getting new clients. The marketing systems used by your business must be measurable and produce predictable results. Results that could be obtained by repeating the steps, and do not rely on a specific personality.
One of the most well-known fully systemized businesses is McDonalds. The entire concept of the McDonalds business structure is based on systematizing every step of the process.
Step by step processes ensure that you get the same food no matter where in the world you order from McDonalds.
They have a system that is used in all of their restaurants, and while they are not known for having the best burgers in the world; people are comfortable and happy to buy from McDonald’\s because they know exactly what they’re going to get when they order.
Systems give predictability. You know if you do steps A-K the end result of the product or service should be the same.
Systems also build value for businesses when they are used to get new clients. How you get people to walk into your business (or phone you) and buy from you can be fully systemized.
The system that allows you to get a new client is one of the most valuable things in your business for two main reasons:
It allows you to continue getting new clients and your business remains profitable.
Your system of getting new clients is part of the value deal which will help other outlets or new owners to replicate.
For example, let’s say you know that if you follow the specific actions in your marketing manual you’ll get the following results:
– Between 50 to 75 responses
– 10 people who actually visit or call your business
– 3 people will buy
– The average sale will be $1,000.
– You’ve added value to your business because you have a system in place that has measurable results that have been tested.
3. Develop a Brand and Relationship with your Target Market
The value of a business’s brand is the perceived relationship the business has with the general public. Back to the McDonalds example- the McDonalds’ brand is known worldwide. The relationship is one that puts McDonalds in mind of anyone who becomes hungry- automatically, they know that McDonalds is an option to fulfill that hunger.
That brand has value
As a small business, it is much harder to develop a brand. Financially, developing a brand can be outside the reach of most small businesses, unless you do something that’s unusual and gains attention – like a publicity scoop of some kind.
Another issue with branding is that most people who develop a brand for their business do so by branding the personality of the business owner instead of the business. Coke & McDonalds are examples of businesses that are branded, but consider Donald Trump – he is the brand. So the issue is – if the personality leaves the business, the relationship and brand have been compromised.
Branding is also very vulnerable to public opinion, which means the brand and relationship you’ve spent 10 years creating can be erased in a moment with a single, disgruntled customer or event.
For most small businesses the better way to establish a brand is to build it within your specific niche. It’s not only easier to brand your business for a certain target market, but it is far less expensive and the end result is the same. The business has more value when it has a “brand”.
4. Buy Business Property
Another way to build value in your business is to consider buying the property your businesses uses rather than renting it.
If you buy the business property, all your business needs to do is pay the mortgage and keep head above water for 10 years and you’ll make money.
A) Jerry decides to rent a property. He might spend $1000 a week for the commercial property.
B) Alan business buys his property for around $2,000 a week.
In example A) Jerry might feel the rent is affordable, and can go out and buy nice things for himself – a house, a new car, etc.
If he doesn’t follow our 5 techniques for building value in his business, he will be left with a nice house and car, but no value in his property or business when he decides to sell or retire. Basically, Jerry is no better off than when he started the business (except for having nice “things” which he may not have been able to afford otherwise).
Alan, on the other hand buys the business property instead of renting (and assuming his business can stretch to make the payments) – is on the road to building value for in his business.
He may struggle a bit more to meet the mortgage, and may go without an amazing house or car for awhile – but 10 years down the line Alan’s property is probably going to be worth a lot more than he paid for it (it could be worth hundreds of thousands- if not millions).
So even if he ignores our other 4 techniques for building value in the business, he’s still sitting on a great asset which he can turn into cash. He has something of great value to sell.
In some areas you can buy a residential house and convert it to commercial property. The conversion of the property often offers instant value to the business as you could end up with additional offices or space you can rent out, and the asset value increases based on the rent prices.
5. Develop Intellectual Property
Intellectual Property is the way you do something that is unique from other people; a clever way of doing something which also adds value to a business. Someone may even want to buy your intellectual property at some point.
You can register a particular method or way of doing something or even a saying or action, so that other people can’t take it and use it without paying for the rights to it. This is how Intellectual Property generates value for a business.
Intellectual property is a bit like branding. It’s quite vulnerable and only as good as the “next best thing”. You can have the greatest widget in the world, but someone else can come up with something clever that makes your Intellectual Property obsolete overnight.
Intellectual property has risk-related value; but that doesn’t mean it shouldn’t be pursued. It’s just important to understand that intellectual property is riskier than other value-building techniques, and you probably don’t want to put “all of your eggs into one basket” when you are considering Intellectual Property.
Of the Five Ways to Build Value in your Business, the three that are worth working on first to give your business a surefire way of building value.
Building a prospect and customer list
Systematizing the way you deliver your product/service and how you obtain customers
Building property value
You can control each of these three things and they are less vulnerable to external forces. For example, developing a brand or intellectual property are strategies which are very much affected by outsiders and their opinions.
If you are starting a business or looking to build value within your existing business, you will obtain much better results by focusing on the aspects that you can do personally and that are not affected by the general public and other external forces.
As your work on building your customer list and systems, you may discover that your brand and Intellectual Property will develop out of these activities quite naturally.
So, set your goals and start working on your business now so you not only end up spending far less time in your business – but you build a money making machine with excellent value.
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