Build Your Business Value First
At some point most of us have thought about retirement. Quitting our businesses and moving to Hawaii...
Let's look at an aspect of that we might not have considered.
I recently listened to a talk about the difference between working our business and working on our business. In other words the difference between doing our "jobs" as opposed to working on growing our business.
The difference is remarkable.
So we all have to do our jobs, working our business. AND That builds our skills, experience and even more importantly it builds our reputations. The combination of those three is what makes us money. You are probably amazingly talented and have the integrity needed to be a leader in your field. It is the mix of skill, experience and reputation that earns us our incomes. But it also gives our companies financial value. The companies we have built have a true financial value based on what we have built.
Building our Brand.
To put it another way, we have been building our brand. Typically when someone mentions "building your brand" they are referring to marketing. But in all "building" you start at the foundation. That foundation is skill, experience and reputation. Building your brand without that is meaningless and will collapse.
Let's look at Building our Brand in a different way. You probably already have the foundation needed. Experience, skill and reputation. Even if you don't have our own business building your personal brand is very valuable for your long term financial health, it is the key to success and financial success no matter what you end up doing.
For those of us with our own businesses, our "brand" = "our business".
For both groups that goes back to the difference between working our business and working on our business (or brand).
So getting back to the retirement idea...
When you have had enough, you want to close up your business, move to Hawaii and lay on the beach all day. Ideally what you would do is NOT close your business, but sell it.
When you think about selling your business there are several factors that come into play. The value of your company will ultimately be based on what you built it into. How you grew it, how much you worked ON your business, not AT it. Not just doing your job but working to grow your business. You can make a lot of money working at your business, but that doesn't necessarily build the financial value of your company.
A company that generates all it's new business from referrals, will have a certain value. But a company that has multiple ways to generate new business will have a much higher value.
That's because we are in service industries. If our company is based on our personal relationships, selling the business to someone with a different personality, or skill level could hurt the company quickly.
And stepping into the past business owner's shoes can be very difficult. But If your business also consistently generates new business outside of referrals the value, financial value of your company is greatly increased.
So for the ultimate retirement/life of leisure we should work ON our businesses to build the sales value of our company also. The easiest way to do that is to work on attracting new clients from outside our referrals.
Which is the final stage of "building your brand". The marketing part.
Value in Marketing
It is easy to visualize the value in marketing. Imagine if 50% of your new clients consistently all came from marketing. All those new clients would be just as valuable to a new owner as to you. The new owner, when he gets these new clients in, doesn't have to try to live up to the personal reputation you have created, or doesn't have to try to assume the same personality style you used with your existing clients. The importance of those new clients that come through marketing is even more valuable to the person that may buy your business. Because the new clients don't know you, and those new clients don't have expectations.
Objections to Marketing:
We all know we should be marketing but let's look at some of the objections:
- It's expensive.
- It's time consuming.
- It doesn't work.
There not all true all the time, but in many circumstances they are all true:
- It's expensive.
- It's time consuming.
- It doesn't work.
It's been so fascinating for me, especially lately as we are seeing so many changes for example on Google searches. The frustrating, and fun, part for me is trying to make marketing work for companies of our size.
All of us have much larger and more well-funded competitors. We always have, but the gap is growing substantially in the marketing arena. Google ads is one example. As traditional Google rankings effectiveness falls, (how you show up on google and getting business from google searches) more of our big competitors are buying ads, (because it is happening to everyone) bidding up the price of getting our ads to show. The ripple effect is that now even our smaller competitors are finding they too have to purchase ads, forcing the ad bid price up even higher. Causing a painful upwards spiral.
So in a lot of marketing areas, both online and offline, we are truly in a new and dynamic situation.
The other ripple effect of the increased marketing competition is now it's harder and more expensive to get noticed in a lot of venues.
So what do we do? If it's:
- It's expensive.
- It's time consuming.
- It doesn't work.
We have to scale and adapt.
First, marketing will work if it's done correctly. That's why the big companies spend so much money on it.
Second, we can scale our marketing budget with a long term goal.
Third, it is time consuming when you first start. But once you have your systems in place it becomes easier.
My company can help you with a balanced plan. That would be based on how much time you can devote to marketing, how much money you want to budget for it and the venues you should market in (online and offline). I'd be happy to help you develop a marketing plan that is well balanced for your specific targets.
It's interesting because:
We tend to think of marketing as a way to increase our revenue, and it does. But the long term effect is also building the financial value of our companies.
That is exciting, it could be the difference... the difference that gives you a life on the beach in Hawaii.