Why might a customer be interested in buying your business? The obvious reason is that it already buys your products or services, and therefore has an existing requirement for them (or at the very least an interest). The level of interest will be significantly affected by the type of business you operate. If you are in a sector where vertical integration makes sense, it may have occurred to you that your customers are just 16 How to value and sell your business one step ahead of you in the supply chain, and may well see benefits in integrating backwards. It has been known for pub chains to buy small local brewing companies. Why? They may get exclusive rights to the product and the potential for increased profits.
For the purposes of this book I consider that any business that sells directly to the public and where the transaction is made on the business’s premises is a retailer. This definition obviously includes shops, hotels, pubs, garages and many other service- or product-based businesses. You may think the definition is so broad as to be effectively arbitrary, but there is some logic in the approach. Aside from selling directly to the general public, all of these businesses share common characteristics. For example, location will be important, as will the need to make regular repeat sales. Most will have very many customers who make relatively small purchases. The majority of customers will obviously have no interest in buying your business. But some might – you only need one person who has both the motivation and assets, so don’t ignore your customer base.
One of the ways of adding serious value to your business is to know who your customers are, what they buy and where they live. Have you ever wondered why large retailers go to the trouble of introducing loyalty cards? It’s certainly not just loyalty. When you use the card they get a record of what you bought, when and how much you spent. They can also determine whether you own a pet or suffer with dandruff. They can see what you buy and this tells them a lot about who you are. Even though you may operate on a much smaller scale, the more you know about customers the better, and the value of doing so will be explored in details. For now, just remember the nauseating television advertisement from the 1980s where the man was so impressed with the shaver he bought the company. Perhaps Magners Irish Cider will be so impressed with your apples that it buys the orchard. Then you really will have ‘time dedicated to you
Tags: customer