Businesses for Sale Should Organize Customer Records First
Posted on Tue, Nov 03, 2009
Do you plan on selling a business in Tucson or Southern Arizona? Think for a moment about what someone who wants to buy a business in Tucson would love to see. Wouldn’t they be simply delighted to find all of your accounting and customer records completely accurate, computerized, and ready to be used without the need for any confusion or translation
If you’re already running Quickbooks or a similar small business accounting package, you can increase the value of your business by taking the next step and organizing your customer records using one of the many affordable small business Customer Relationship Management (CRM) systems that are available today. These systems will allow you track all manner of customer information, take notes, make appointments, broadcast email campaigns, etc. They build on the customer record in your accounting package, and let you do much more.
CRM systems are available as both “on-premise” solutions (meaning that you buy and install the software on your computers) or as Software As A Service (SaaS), or internet hosted solutions that you pay for monthly on an a per-user basis. The latter have the advantage of continual upgrades to the software itself, and do not require any expenditure on hardware.
By exporting your customer records from your accounting software into a CRM system, you will gain the ability to cost-effectively communicate with your customers and to track their activity in a more detailed fashion than the accounting software generally allows.
Why will this increase the value of your business? Well let this business broker tell you!
In terms of marketing expenditures, it is nearly always more cost effective and profitable to gain additional share of business from current customers than it is to prospect for new customers. Existing customers are also typically less price sensitive and therefore higher margin, whereas you will generally need to offer new customers some form of an incentive to switch to your product or service, which lowers your margin.
Using a CRM systems can also transform the way sales and marketing work within your organization when combined with analysis of past sales, and the visibility they offer for managing the pipeline of future sales. If you fully understand the products, services, channels or customers that make the largest contribution to your bottom line, a CRM system will allow you to redirect your marketing resources and sales efforts in a highly targeted fashion to focus on the areas of your business that matter most.
From the perspective of a prospective buyer of your business, imagine how much more confidence they would have in their investment if you could clearly demonstrate who your customers are, what their sales patterns have been, what orders or repeat business is in the pipeline, and by deduction, what the future value of those customers are.
A buyer will generally not pay for future value, preferring instead to base their evaluation of your business’ value on its historical financial performance. However, if you can show them this level of detail about your business, and give them the greatest possible level of confidence that they could hit the ground running after buying it and expect the same or better results, then they are likely to be willing to pay you a higher price.
Don’t wait until you want or need to sell your business in Tucson to take advantage of the power and insight that your customer records can provide when you use a CRM system to manage them.
If you'd like more information on this subject, please contact us at 520-327-4454 or visit us at www.allenandyoung.com