How to increase the value of a service business

Increase Your Business Value

Today we are going to talk about increasing the value of your company, which comes in handy if you’re seeking business loans or want to sell your company one day.

What can you start doing now to make your company more valuable?

The answer is to Build Assets!

When you sell your company, the prospective buyers won’t be interested in buying your corporation, LLC, or sole proprietorship. They’ll be most likely only interested in purchasing the assets and goodwill of the company.

They’ll be examining the assets, which is what you own that has value, and your liabilities, which is what you owe.

The more you build things that you own and have value, the more your business is worth.

Today we’re going to talk about 5 assets that you can build to increase not only the value to your company but also its sales and efficiencies.

#1 – Service Agreements

Creating recurring monthly revenue should be a top priority for your company.

Using service agreements, maintenance contracts, or VIP clubs will help you retain existing customers.

Provide a reliable monthly revenue source over time.

Provide a reliable revenue during any slow seasonal changes in your service business, and decrease your need for advertising.

We go into more details on using service agreements & VIP clubs to create recurring monthly revenue in podcast episode #7 – go check out that episode.

#2 – Standard operating procedures (SOPs)

Can your business run without you? If the answer is no, you may have difficulty selling your company for a good value, it at all.

The way to create a business that can run without you is to do what every regional or national chain does, create an organizational chart of who does what, and then standardized procedures for each of those positions.

It’s the most important thing you can do for your business, whether you’re going to sell it or not. It will increase efficiencies, decrease costs, and provide a repeatable customer experience.

If you plan to have the next generation in your family take over the helm one day, this will be crucial in setting them up for success.

Remember the quote I shared in episode #1 from Ken Goodrich – the owner & President of Goettl AC, who said, “A business is an organization of systems that delivers customer satisfaction and more transactions.”

We’ve all been in a business, maybe a restaurant, hotel, or any small business that just seemed to operate so incredibly smoothly and efficiently. So much so that it stood out to you.

That’s the result of a great staff that believes in what they do and who they serve and are highly proficient in the standardized procedures for every function of their job to produce repeatable results.

Your staff should play a major role in developing these procedures and feel more like part of a team than just an employee if you do it right.

In the end, you’ll have a well-oiled machine running at peak efficiency whether you’re there or not.

And if someone wants to buy your company, it has to run without you being a part of it.

If you are the business, if you must be there tomato everything run, that might be okay for you, but it doesn’t haven’t much value for others.

It’s so important, and it’s a major topic in our very first podcast episode. Get it right, and your company’s growth and value can skyrocket. Ignore it, and you may be working twice as hard for half the money and have much less value if you want to sell your company.

And if you want to pass the company onto the next generation in your family, you’ll be setting them up for struggles or failure if you don’t have SOPs in place and everyone on the same page.

#3 – Reputation Management System

Estimated one-third of the companies’ value in the Fortune 500 is their reputation – their brand value. This is according to an article in The Economist.

So get started increasing the quantity and quality of your customer reviews and video testimonials.

Installing and utilizing an automated reputation management system is relatively simple to do and manage.

These systems can connect to your CRM, or you can upload a weekly new customer list and feed the system that way.

We use a Gather Up system, but many others are out there, such as Birdeye, Broadly, and others.

For video testimonials, we use a system called Magnfi. They make it easy to send a customer an email with a link to use their phone or desktop camera to record a quick 1-minute video testimonial.

Video testimonials can be a very powerful conversion tool on your website for visitors to watch and hear from your actual clients themselves about their experience with you. They are more trusted than written reviews.

We’ll put affiliate links to Magnfi and GatherUp in the blog post transcription of this podcast on our website.

#4 – An engaged mailing list

It’s a tremendously valuable asset to your business. Sending an email newsletter keeps you connected to past customers and can grow repeat business, referrals, and reviews.

You can attract and engage them by creating an email newsletter your customers will want to open and read.

So it’s not about just promoting your products and services; it’s about what’s in it for them.

Share the following options below:

• favorite places around town
• helpful tips
• product reviews for the home
• DIY series
• include contests for increased engagement
• etc.

Give them a reason to open your email and engage with it, don’t just promote your stuff.

Your unsubscribe rate will climb, and your open rate will fall off a cliff.

So an email marketing platform is another key automation tool you can use to create an active customer list, a valuable asset to your company.

We use the AWeber email marketing platform for ourselves and our clients.

We go into more depth on this topic in podcast episode #11, how to grow your business by staying connected.

#5 – A CRM – customer relationship management system

A customer database with integrated tools to manage your sales leads and pipeline integrates with your accounting to allow for easy billing and your reputation software to streamline customer reviews. It shows the service history of all your clients and much more.

This might have been listed last on this list. Still, along with creating your organizational chart and SOPs, your CRM is probably the next most important ingredient to running an efficient, repeatable, and profitable business.

It’s also the sole subject of our podcast episode #3, so go check out that episode for more on this.

Alright, I hope that helped some of you to start building more assets and increasing the value of your business.

Thanks for sharing your time and attention with us today.

Good luck out there, and create a great day!