**Summary:**

In this episode, SalenaKnight discusses four things that can triple the value of a business. She emphasizes the importance of getting finances in order, ensuring the business can run without the owner, owning intellectual property, and owning customer data. These steps can significantly increase the value of a business and make it more attractive to potential buyers.

**Key Takeaways:**

– Get your finances in order to increase the value of your business.

– Make sure your business can run without you to attract potential buyers.

– Own your intellectual property to add value to your business.

– Own customer data to make your business more valuable.

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Hey there and welcome to the bringing business to retail podcast. If you’re looking to get more sales, more customers, master your marketing and ultimately take control of your retail or e-commerce business.

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Then you’re in.

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The right place.

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I’m Celina Knight, a retail growth strategist and multi award-winning store owner whose superpower is uncovering exactly what your business requires to move to the next level. I’ll provide you with the strategies, the tools and the insight you need to scale your store.

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So you.

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To do is take action ready to get started.

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Hey there and welcome to the beam business to retail podcast. Today, I want to talk to you about four things that you can do to triple.

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The value of your.

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Business and the reason I want to talk to you about this is because there are a bunch of people inside of our supercharge program and inside of our 5X program.

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They have kind of come.

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To their realization that this is not for them forever being a being a retailer, e-commerce business owner forever.

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Kind of has lost its gloss, and let’s feel this very rarely these days. Do we do the same thing for ever? So as a business owner, I think it’s really important to think about the value of your business. Now. You are anything like me when I sold.

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My first car, I spent a half a day.

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Really polishing it, detailing it. I got out every squirter, every spray. Did the glass did all the plastic.

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Cause let’s be honest.

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It wasn’t leather. Did all the plastic I I even remember getting this special stuff that.

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Made the silver even shinier. I guess it was kind of like brasso or something, but I remember going through and using that on on the inside of the door handles like anything that was silver, I shined the bejesus out of.

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But when I.

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Think back. It was kind of a fools errand because I bought that car for $2000.

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I think I had it for.

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Like 3 or 4 years.

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And I sold that car for $2000.

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So I mean.

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At the end of the day.

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The car was worth what? The car.

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Was worth and.

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As much as I put lipstick on a pig wasn’t going to be worth too much more now these days, I generally fork out. What is it? Three $500.00 and I.

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Have my car detailed.

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Not to say that I go.

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Through cars like like Jelly beans.

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I like. I like cars but.

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I could never think.

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Of the next car that I want, so I.

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Have had the mini for.

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I’m going to say five years now and.

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Before that, I had Utes.

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Or, as the Americans call them, pickup trucks.

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So I had.

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Truck after truck after truck because that was the industry that I was in. I was a horticulturist. I was an arborist. I was a contracts manager and we hauled stuff and so it kind of made sense to have.

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You or a pickup truck.

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But I remember moving to a a proper car and I went from this big truck to a little mini and even all these years later I still get out of the mini and it’ll be like 3 feet to the wall where I could have kept reversing. But I have, yeah, 30 years.

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30 years I’m going to say.

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Yes, 30 years of driving ingrained in me.

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And I reckon.

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25 of those years I drove a Ute, and so my head is still always in that same big space.

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Tiny little mini.

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I always have loads of loads of room but.

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The time these days, when it comes to just spending the money to get the car.

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Detailed that is a.

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Very good ROI for me.

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Because I don’t have a whole day to detail my car and more importantly, I don’t enjoy washing my car. I know a lot of people do, but that is not something that I enjoy doing.

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So why do we spend the money or spend the time?

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To detail our car when we’re going to sell it well, because we want to make that the thing that we’re selling, in this case the car as.

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Presentable as wantable, is that even a word as desirable as we possibly can to the buyer? We want them to see the value that we have put on the item.

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So you put.

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Your car out for $20,000 you want.

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The the person.

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Who’s buying it to feel like it is $20,000?

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So Fast forward I am not selling my car mainly because I have no idea what I would change it out for.

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But I am thinking about selling our house.

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Now this. This is where I’m standing right now in my office was supposed to be our five year house.

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We have a lot of stairs. There’s a.

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Lot of adverse.

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Things around about our house, so.

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Example we’re on the.

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Side of the hill. So the positive of.

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That is, we have amazing.

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News. The downside of that.

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Is you have to walk up 57.

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Stairs to get to.

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The front door.

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When you have a dog with a broken leg, that is a lot of carrying of dogs. Everything has to be carried up so all the groceries.

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Every time we buy a piece of furniture.

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All that stuff has.

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To be hauled up.

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And I’m kind of overt, as I said, this was going to be our five year house. We’re going to move in, renovate it, sell it.

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Go back to.

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The beach so a.

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Little bit of back story.

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Here when I first met Ed, I lived.

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In a beachside suburb, which?

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Is only 10 minutes from here.

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We were really, really.

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Lucky we were renting a house while I was.

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Renting a house, it was dirt cheap for where it was.

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It was it.

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Was pretty shabby house, but the location was everything.

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We didn’t have.

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A view of the beach, but we were.

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One St. back from the beach.

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However, this seems to be the story of my.

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Life there was.

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A very steep set of stairs from our house down to the beach. Regardless, at the end of the day, if we wanted to get to the beach.

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It was maybe 5 minutes away, so we.

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Used to go to the beach a lot. Now I know. Looking at me, you’re thinking. Ohh my gosh. You can clearly tell.

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From that very white team that she has, that sale spends a lot of time at the beach. Clearly I do not, but I do.

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Love the beach.

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And so I’m the kind of person who.

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Likes to go to the beach.

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Jump in the water. Get out.

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Go back home again.

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Or alternatively, if the water is too cold.

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I’m more than happy to sit on the beach.

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And read a book.

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But I’m not the kind of person who spends.

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A whole day at the beach like.

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One I can’t.

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Sit still for that.

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Long and two, I would get burnt.

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To a crisp.

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I’ve decided it is time for us to.

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Move down to the back to the beach.

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But all of this came from a conversation with our neighbour, who is looking to move and you know how you do that thing when someone says they’re going to move house or they’re going to buy a new car, you start doing what I call the fun look. And so you pull up all the real estate sites, all the car sites, and you start looking at all the potential places or things that you that person.

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And as I’m doing a fun look over dinner Sunday dinner, we’re sitting around the table and I’m looking at the real estate pages, and realistically, we only have like 2 real estate, unlike America, where they’re not aggregated here, you kind of just put them on one or two websites, realestate.com and domain. And that’s where everything goes.

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So we’re looking.

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And I start to see, oh, that place looks quite nice. Oh, my gosh. It has a view. I could tell you a little bit of a back story here, which is if you’re a little bit woo and.

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You do the manifestation thing.

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One of the things I have done is changing my screensaver to this property that I wanted to buy the view from the deck over the ocean of this property. I would love to buy.

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Yeah, in a little bit of.

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A weird sort of set of circumstances.

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I’m looking at these houses for my neighbour.

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And I’m seeing this similar kind of view now, not the exact same view, because they’re in different places, but this similar reoccurring view and it is a beautiful view of the ocean. Now, not all of these have.

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You know 300 and that wouldn’t be right, but 180 degrees views of the ocean. But there are really nice views of the ocean and I’ve always wanted a property that had a view of the ocean.

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Where we live now, we.

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Have an amazing view.

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Which they call it like a nature view. So we because we’re so high up, we see lots of trees, we can see all the way to the city. We have got gorgeous views.

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But they’re not the ocean, I I.

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Worry that that is something that I have always wanted.

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So as I’m doing the fun book, I start to realize that.

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There’s the opportunity for us to.

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Move back to the beach.

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Now I won’t go down that rabbit hole because kind of have some stuff going on in the.

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Back of my mind, and.

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I would love to share with you.

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How all of that happened if?

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The beach thing ends up going ahead, but let’s just backtrack. So I’m having this conversation with Ed about the fact that I would like to move back to the beach. In the meantime, we’ve actually put a deposit on another house, but that’s not gonna be ready for.

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A couple of years so.

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Many stories in today’s episode that.

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I won’t go down.

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The rabbit hole.

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But we have agreed that whether we move to the new place in two years time, when it’s ready or we move to the beach, in the meantime, the simple fact is we’re probably going to move in the next 12 to 18 months. And here’s the thing.

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You start to realise.

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Just like that car that you detailed as you’re detailing the car.

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You realise that? Ohh the light bulbs gone out? Yes, actually in my car the fog light in the rear light bulb notification keeps coming up. But you start to see Ohh. The original wipers need to be replaced or the bulbs need to be replaced or the seat covers need replaced all these things that need to be done.

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When it is your house.

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That is a whole extra level.

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Now remember this was.

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Going to be our five year house.

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And so we’re.

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Going to move in and do all.

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The renovations and.

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Get rid of it.

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But what happens like if you have lived anywhere for a long time, you realize that very, very quickly, like ridiculously quickly.

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You start to overlook all the things that you wanted.

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To do so.

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Our front entryway is tiled. They’re horrible, ridiculously ugly. Hideous sandy yellow coloured tiles.

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They’re actually falling off the floor.

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And that’s one of the first things.

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I wanted to do.

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17 years later, still on the floor, still falling off up there, literally holes like where the tiles used to be. Because I’m not putting the back on, they’re not putting back on.

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Because I want to.

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Get a new flock so all.

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These things that.

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You’ve overlooked over the years.

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Start to come to the fore.

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Because you start looking at.

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Your house or your.

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Car through the eyes of a buyer so all.

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Those things that you’ve turned a blind eye to.

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Disappear until you make a decision to sell, and then all of a sudden you will see.

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Every crack.

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Every bit of peeling paint with the dripping paint and the dripping tap and the clutter. Freaking hell.

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So much quarter, 17 years of stuff in our house.

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And every single weekend we pick a cupboard.

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And we start to go through it in fact.

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On the other side of my office, there is another room. It is literally.

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Full of stuff that needs to go to the.

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Tip or needs to?

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Be recycled? I’m slowly, like, putting them on to all the marketplaces to try and give them.

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A new home but.

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There’s, you know, boxes and Styrofoam and.

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All that kind of stuff.

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And you start to realize that there is no.

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Oh, I’m going to.

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Put my house on the market next week.

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Because if you really.

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Want to get that top dollar?

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You know that you have to.

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Declutter, you know. Have you have to fix?

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Up all the stuff.

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That is being duct taped. Yeah, yeah, we have that things that have been duct taped together and you have to make sure everything works perfectly.

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Because you want that value to be conveyed, you want someone to come in and pay you as much money as possible, and they are not going to do that if the trap the taps are dripping. If there is peeling paint, if you’ve got a horrible, ugly what do they call curb appeal and the, you know, the furniture.

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It’s all being smashed up here. Trust me, I’ve seen some horrible places in my time and you know.

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That those are the.

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Places that you can beat down.

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The price of but as a.

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Seller, you want the best price possible, so you will put the effort in.

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To get top dollar so.

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That the buyer can see the same value that you.

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Can see.

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Alright. Can you see the parallel to business yet?

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Because that’s what we’re gonna talk about.

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Today’s episode is how you can increase the value.

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Of your business.

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The best piece of advice that I was given when I started my business was to always think about your business.

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As if there is a buyer waiting to purchase. So if someone came in and said I really love what you’re what you’re.

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Selling how much do you work for?

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It of course.

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You would have to be able to justify that.

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Amount so if.

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You’re always in this mindset of having your business ready for sale.

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All of a sudden, just like the house.

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All of those things that you’ve kind of.

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Put off and duct taped together and you know.

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The dripping taps of.

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Your business, maybe it is a dripping tap in the bathroom.

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All of those things get fixed and.

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If you are thinking well, yes, one day I would like to sell my business. Maybe it’s not tomorrow. Let’s be honest. It’s not gonna be tomorrow, cause it takes time to get your business ready for sale. Some somebody who has been there, it didn’t even take me a couple of weeks. It actually took me months to get my business.

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What they call due diligence ready. So when somebody comes in, they do their due diligence, diligence on your business.

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You have to have a set of things in order, so it took months for me to fix up the cracks.

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And get all of those things in order. But here’s the thing. When you do this.

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You will get.

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More money for your business and I’ll explain as we go through what those things are, how that works. So if you want to significantly increase the value of your business.

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Here are four things that you can do that will take time. They’re actually really simple, but the reality is they’re not quick fixes. They’re not simple things that you can just do over the weekend. They will take time.

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But they don’t generally take an.

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Awful lot of effort.

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Right. So the first one is to get your finances in order.

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So just like when you go to sell your house, they will run a total search on your property, just like when you go to sell a car, a good buyer should run a total search on the fact that you own the car.

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And you are going to submit need to submit.

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If you’re buying another place.

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All of your documents to.

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The mortgage broker.

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I can honestly say that too many businesses, too many business sales fail due diligence.

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So that means that when the buyer is interested in the business, the information that they get.

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Is not good enough for them to either pay the price or to even go ahead with the sale. So when you go to sell, a buyer is going to come through your books. Honestly, they are going to see where anywhere that they feel that they can make a profit because.

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They want to know that the reason that they’re buying your business is to make money generally, but they want to know, are you overpaying for your free in, or are your profit margins too small, or are you holding too much inventory?

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Remember, your business is worth more to an investor actively seeing how they’re going to recoup their investment. And of course make more money. It is more valuable to them because they see the business for what it is, which is a money making vehicle than it is to the person who is just.

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You can.

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Buying themselves a job.

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Someone who is just looking to replace a modest salary isn’t going to pay you the same kind of money as someone who can see that your business can make them money and possibly make them significant amounts.

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Of money value is in the eye of the buyer.

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So you can have an idea and and your accountant might even tell you what they feel the price is, but at the end of the day, it is up to the buyer to decide the value to them, and if you’re lucky, the value is going to be much higher than the price that you want. But if you’re unlucky and you don’t have your finances in order and buy that, I mean, making sure that.

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These are categorised correctly in your accounting system, so.

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When you buy free.

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Are you putting the landed cost of the product in? Are you separating out the cost of the product to the cost of the freight to the?

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Cost of the.

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Insurance. Now all of those things are important because when you think about it from an investor’s point of view, maybe they have a great relationship or maybe they import a lot of stuff from the same country that you do.

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So they realize that actually the freight that you’re paying, if they aggregate it, if they aggregate it with what they’re already buying in.

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They can wipe out that freight cost and so automatically they can see a value and they can see a place that they can make money that you can’t necessarily see because you don’t have the same infrastructure you don’t have.

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The same connections.

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And so all of a sudden the business becomes more valuable to them because they can see how they can make money, but somebody.

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Who is just?

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Coming in to buy themselves a job.

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It’s probably going to.

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Be happy if they pay themselves anywhere between.

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50 and $100,000.

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They don’t need the business to make more than that, so they don’t.

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See any value?

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In buying in paying more than that, right. So that’s the first thing that you need to do and buy finances.

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If you are at 7 figures be working with a Virtual CFO so they can.

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Map this stuff out for.

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You talk closely with your accountant, like make sure that.

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You understand your numbers because if you don’t understand them and someone is looking and a buyer is looking at your finances, then what’s going to happen is.

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If they can.

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See that you don’t know.

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What you’re doing?

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They’re going to beat.

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You down on?

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Price because they can, they’re going to use your ignorance and I don’t say that in a.

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Mean way they’re.

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Going to use your ignorance against you.

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So having that knowledge and being really confident in where the values can lie and even saying something to a buyer like hey, do you really import in China? Because this is a great place that you could make money if you aggregated our shipments with your shipments, you could wipe out those freight costs and.

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All the sudden the profit margins increase.

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Got it. All right.

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Number one easy way to.

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Triple the value of your business.

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Is just get your finances in order the next.

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You need to be able to have the business run without you. It’s time for some real talk here. I know that you all say that you want to work less. In fact, that is literally the whole concept of what we do is helping you to work less. The concept of working less and spending.

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More time with your family or traveling or doing things that you love literally ranks #1 on your go.

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List I can tell you that because whenever we talk to a client and we talk to well, we talk to retailers, every we have dozens of calls with retailers every single day and every single time that comes up in some way, shape or form as.

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What it is you’re looking for?

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But the reality is.

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I’m going to be honest here, most of you.

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Are control freaks.

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Just can’t let.

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It go there I.

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Said it. Now I don’t know about you, but.

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One of the.

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Hardest parts stepping up in your business and I talked about this just a couple.

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Of weeks ago.

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One of the hardest.

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Parts of that stepping up was that that I found.

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Curbing that feeling of losing control. Now I know that for me I had too many things on my To Do List. I had too many ideas.

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Too many projects.

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But I didn’t have a.

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Goal other than to try and get everything done and when.

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I find myself in that space because.

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Let’s be honest, it happens, you know.

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It it happens it you know it.

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You can be as aware as possible, but you can find yourself in those situations over.

00:21:46 Speaker 1

And what happens for me is I lose.

00:21:48 Speaker 1

My focus, and so I slip.

00:21:51 Speaker 1

Back into this habit.

00:21:52 Speaker 1

Of creating more work for myself so that I can feel like I have regained some sense of control. Now I understand the behavioral science behind it.

00:22:05 Speaker 1

I get it. And so now I try and be a lot more Cognizant.

00:22:10 Speaker 1

Of when that happens?

00:22:12 Speaker 1

But it is human nature to want to control the situation around you and to want to control your environment. And so that’s what we do. If we slip back into this way of working so that we can just cross things off our.

00:22:26 Speaker 1

To Do List.

00:22:27 Speaker 1

And for me and.

00:22:29 Speaker 1

I know you guys say this too.

00:22:31 Speaker 1

I can quite often feel that if I don’t.

00:22:33 Speaker 1

Do it myself.

00:22:34 Speaker 1

Then it probably won’t get.

00:22:35 Speaker 1

Done or.

00:22:37 Speaker 1

I can do it.

00:22:38 Speaker 1

Faster or quicker or easier if I just?

00:22:40 Speaker 1

Do it myself.

00:22:42 Speaker 1

But what ends up happening when you adapt that mindset? Sure, it might.

00:22:46 Speaker 1

Be true in the beginning.

00:22:48 Speaker 1

But the reality is, if you’re if you’ve hired the right people and you work with the right people.

00:22:54 Speaker 1

That there is someone out there who is.

00:22:55 Speaker 1

Gonna do it quicker, cheaper, faster.

00:22:58 Speaker 1

And way better than you ever can. And so.

00:23:03 Speaker 1

When I find myself in that situation of lacking control, I realized that the freedom that.

00:23:11 Speaker 1

I you know.

00:23:12 Speaker 1

We all want freedom. For me, it’s just.

00:23:13 Speaker 1

Being able to choose when I work and.

00:23:15 Speaker 1

You know, fit things in between fit.

00:23:17 Speaker 1

Life in around.

00:23:18 Speaker 1

Work. But when I find that I slip out of that.

00:23:23 Speaker 1

Being the CEO and into the foe EO.

00:23:28 Speaker 1

My business runs me rather than me running my business and I get really frustrated with my team. I get frustrated with my family and it’s because I’m frustrated with myself, right?

00:23:40 Speaker 1

And I I kind of slip into this.

00:23:42 Speaker 1

Well, nobody does what I want.

00:23:43 Speaker 1

Them to do and nobody does it.

00:23:45 Speaker 1

The way I.

00:23:46 Speaker 1

Want them to do?

00:23:47 Speaker 1

And I I can go. I start.

00:23:49 Speaker 1

Nitpicking and double checking everything.

00:23:51 Speaker 1

But that that’s not being a great leader so.

00:23:54 Speaker 1

If you find yourself feeling frustrated with the world in general and you’re putting more and more.

00:24:00 Speaker 1

Of it, in trying new things, hiring so-called experts and.

00:24:07 Speaker 1

Find that it doesn’t get any traction. Well, the truth is, the reason for all of that is because of you. And in my case.

00:24:15 Speaker 1

It’s me, I am the bottleneck this.

00:24:18 Speaker 1

That constant need to be busy and to be everywhere, like let’s call it for what it is, a constant need for validation.

00:24:28 Speaker 1

But I like to think that I have worked with enough people to be a bit of a pop psychologist, and I know internally that when I am trying to cross things off the list when I’m trying to micromanage and it’s, you know, it’s a horrible thing to be doing, what I’m really doing is looking for validation. Yes, I cross things off my list. Yes.

00:24:47 Speaker 1

Somebody did what I did.

00:24:48 Speaker 1

What? I asked them.

00:24:49 Speaker 1

To do, but the reality is that.

00:24:53 Speaker 1

Devalues your business.

00:24:56 Speaker 1

And it doesn’t just devalue it a little.

00:24:58 Speaker 1

Bit it devalues it a lot.

00:25:03 Speaker 1

Most retail and e-commerce store owners.

00:25:05 Speaker 1

Look at their business like a job rather than the CEO. And a CEO is.

00:25:12 Speaker 1

The person who is making the decision, you can swap out the CEO of a business and it still runs.

00:25:20 Speaker 1

So a CEO looks at the business.

00:25:23 Speaker 1

As a vehicle.

00:25:25 Speaker 1

To serve customers.

00:25:26 Speaker 1

And make money.

00:25:28 Speaker 1

Remember the value of your business.

00:25:30 Speaker 1

Is in the eye of the buyer.

00:25:33 Speaker 1

And if the money that they can make from your business is capped because all of the things are in your head or you are doing all of the things.

00:25:45 Speaker 1

The reality is it is worth less.

00:25:47

To them.

00:25:48 Speaker 1

So think of it from their point of view. Think of it. If you were trying to go and buy a business, if you had to get everything out of the business owner’s head somehow and put it into systems and processes, that is going to take you time, that is going to take you money. And it is also going to have an opportunity cost.

00:26:09 Speaker 1

Which means the time that it takes to do that means the business isn’t doing something else next, they would have to pay somebody to replace you. So they’re either gonna have to pay for a store manager or an e-commerce manager, or a marketing manager.

00:26:24 Speaker 1

Well, there’s 100 grand in profit gone straight away. Yeah, realistically, a good, you know, a good manager of a decent sized business is probably in the 80 to $100,000. So they’re whatever you had in your profit for the buyer’s gone $100,000 wiped off straight away.

00:26:44 Speaker 1

The flip side of that is if the business runs without you.

00:26:49 Speaker 1

If the business runs better without you, then the value increases exponentially because there are less.

00:26:57 Speaker 1

Obstacles in the way for the new owner to just slide right in.

00:27:01 Speaker 1

And to continue to.

00:27:02 Speaker 1

Have the business run and most importantly.

00:27:05 Speaker 1

And not going to lose money.

00:27:08 Speaker 1

OK, so get your finances in order. Find a way.

00:27:12 Speaker 1

Or start working towards the business. Being able to run without you there. And when I say that, I mean make it run and still make money. You don’t. If you lose money when you’re not there, then that is not the business running without you. Alrighty. On the topic of money, you know I love to talk about money. People are always asking how to value a business.

00:27:34 Speaker 1

And I know.

00:27:35 Speaker 1

That you think that the brand that you’ve created?

00:27:37 Speaker 1

Your logo, your website is all worth something.

00:27:41 Speaker 1

But unless you like Coca-Cola.

00:27:44 Speaker 1

The truth is, it’s.

00:27:45 Speaker 1

Pretty likely that that number is low or potentially even irrelevant. It means nothing to the new buyer. The main reasons that an investor will buy your business is because they can see a way to leverage it.

00:27:59 Speaker 1

To make them money.

00:28:00 Speaker 1

And they’re going to do it in two main ways. They’re going to either.

00:28:06 Speaker 1

Cut your cost in some way, like that example of the shipping.

00:28:11 Speaker 1

Or they’re going to leverage your audience being your customer database.

00:28:16 Speaker 1

And use that to sell their existing products. So they’re either going to use it to complement something that they already have, or they can see a way for it to for them to be able.

00:28:27 Speaker 1

To cut costs.

00:28:28 Speaker 1

And make themselves more money. So those two things.

00:28:32 Speaker 1

And sometimes those.

00:28:32 Speaker 1

Are two things that combined. If they can decrease your costs and increase your buyer pool, kaching kaching kaching now it is worth more.

00:28:42 Speaker 1

And you can.

00:28:42 Speaker 1

See why?

00:28:44 Speaker 1

Let’s take the example of Facebook buying WhatsApp. But it was a main rival for their messenger. So not only did they take a rival out of the business, but then they have a whole new platform of people to be able to sell their products to, and they can add those things together. They can aggregate those things together and they can leverage off the technologies from one and the other and they can implement into the other businesses.

00:29:07 Speaker 1

But they find ways to make money.

00:29:11 Speaker 1

Now with.

00:29:13 Speaker 1

Speaking of making money.

00:29:16 Speaker 1

If we haven’t already worked this out already, you have to increase.

00:29:20 Speaker 1

Your profit in your business.

00:29:22 Speaker 1

Now in that.

00:29:23 Speaker 1

Conversation about people always asking me how.

00:29:26 Speaker 1

To value their businesses.

00:29:28 Speaker 1

The account is going to come up with something.

00:29:30 Speaker 1

But there are there.

00:29:31 Speaker 1

Are some simple ways that.

00:29:32 Speaker 1

You can look at your business from an investor’s point of.

00:29:35 Speaker 1

View because you aren’t, you aren’t multinationals.

00:29:37

We have.

00:29:37 Speaker 1

You haven’t gone public so.

00:29:40 Speaker 1

As an investor.

00:29:41 Speaker 1

If someone is looking to buy themselves a job back to that old chestnut and the business doesn’t work without you, there are no systems and processes in place.

00:29:51 Speaker 1

They don’t have anything to aggregate.

00:29:53 Speaker 1

Or ways to cut costs or things to combine.

00:29:57 Speaker 1

They’re just going to pay you one time your profit.

00:30:00 Speaker 1

Yes, you might get the cost of, you know, devalue cost of inventory stock at value SA V.

00:30:06 Speaker 1

But realistically, they’re going to.

00:30:08 Speaker 1

Be looking at one times your profit.

00:30:10 Speaker 1

One times your EBITDA.

00:30:11 Speaker 1

Which is your earnings before interest, tax amortisation and dividends, or quite simply seller discretionary earnings, which let’s just call it.

00:30:20 Speaker 1

For what it is, profit.

00:30:22 Speaker 1

So if that’s where your business is at now, then we’re.

00:30:25 Speaker 1

Going to pay you like 1.

00:30:26 Speaker 1

X profit. You might get a little bit more.

00:30:28 Speaker 1

You might get a little bit less.

00:30:30 Speaker 1

I don’t know about you.

00:30:32 Speaker 1

But most of the businesses that we work.

00:30:33 Speaker 1

At work with.

00:30:35 Speaker 1

That profit if you get 1X.

00:30:37 Speaker 1

It’s like, why the heck did I spend all these years building the business? It has nothing to do with revenue. It has nothing to do with turnover. At the end of the day, it’s how much money is in the bank.

00:30:48 Speaker 1

But you can do some creative accounting to make.

00:30:50 Speaker 1

That number look like more, but let’s call.

00:30:52 Speaker 1

It for what it is.

00:30:55 Speaker 1

If you can increase the profit in the business by doing the things that we have talked about.

00:31:01 Speaker 1

All of the podcasts, then your business becomes more valuable.

00:31:06 Speaker 1

So if your finances are in order and someone can see where they can make more money, leverage your business to help whatever it is they want to do, and the business has a way of running without you that number.

00:31:21 Speaker 1

Pretty much goes to two.

00:31:23 Speaker 1

And 1/2 or three times.

00:31:26 Speaker 1

The buyer isn’t going to have to outlay money.

00:31:29 Speaker 1

Just to keep.

00:31:30 Speaker 1

The business running.

00:31:33 Speaker 1

So by doing the things we have talked.

00:31:34 Speaker 1

About you can triple the value of what a buyer will.

00:31:40 Speaker 1

Pay for your business.

00:31:42 Speaker 1

And to me, that means it’s worth, you know, that is way worth the money. And I and I don’t know why. Yeah, they kind of seem like simple business things. But when you realize.

00:31:52 Speaker 1

That you can.

00:31:53 Speaker 1

Triple the value of your business.

00:31:54 Speaker 1

Just kind of by.

00:31:56 Speaker 1

Call it what it is. Getting your **** together.

00:31:59 Speaker 1

Then it makes it worth the while. It’s like the house, it’s.

00:32:02 Speaker 1

Like you’re putting up the cracks.

00:32:04 Speaker 1

The time painting getting the plumber in to fix the tap, all those things.

00:32:09 Speaker 1

Become more valuable when someone says I can triple.

00:32:12 Speaker 1

The value of your.

00:32:13 Speaker 1

House. If you just fix this stuff up.

00:32:15 Speaker 1

It’s like, well, why wouldn’t you?

00:32:17 Speaker 1

Now before we finish up, there is one.

00:32:20 Speaker 1

More reason that people forget.

00:32:24 Speaker 1

That someone might want to buy their business, and this is probably my favorite thing because it’s.

00:32:30 Speaker 1

It’s kind of the reason it’s kind of.

00:32:32 Speaker 1

A way to sell more stuff for.

00:32:35 Speaker 1

A very small amount of money.

00:32:37 Speaker 1

Now I did. I’m going.

00:32:39 Speaker 1

To go back on something that.

00:32:40 Speaker 1

I said I said earlier.

00:32:41 Speaker 1

That you know your.

00:32:42 Speaker 1

Logo and your brand probably are irrelevant in terms of pricing.

00:32:48 Speaker 1

It it’s kind of true.

00:32:50 Speaker 1

But that does not.

00:32:52 Speaker 1

Mean your IP is not worth money.

00:32:55 Speaker 1

So from a buyer’s point.

00:32:57 Speaker 1

Of view.

00:32:58 Speaker 1

And if you’ve ever watch Shark Tank, they always say do you have the trademark? Do you?

00:33:02 Speaker 1

Have the patent.

00:33:03 Speaker 1

One’s own your business. Name 2 have the trademark of your business name.

00:33:09 Speaker 1

Now I have literally seen businesses be bought for the trademark for the business name.

00:33:16 Speaker 1

Like it’s a big business.

00:33:17 Speaker 1

And then that they that you want in the class of trademark that you’ve got.

00:33:21 Speaker 1

They will pay.

00:33:22 Speaker 1

You money for it? You might not feel like that’s much.

00:33:25 Speaker 1

Much you’re worth.

00:33:26 Speaker 1

Much, but for them it is. But then they may not.

00:33:28 Speaker 1

Be worth anything and.

00:33:30 Speaker 1

It’s not worth anything unless someone wants to buy it, but you should always own your IP, and that does mean.

00:33:36 Speaker 1

Spending the money registered brand name, registered Trademark Register. Any patents that you might need for any products that you have.

00:33:44 Speaker 1

But there’s another one that so.

00:33:47 Speaker 1

Many people forget about.

00:33:49 Speaker 1

Which is.

00:33:50 Speaker 1

Making sure that you own your customers.

00:33:53 Speaker 1

And by this I mean you have.

00:33:56 Speaker 1

Your customers data.

00:33:57 Speaker 1

You might have.

00:33:58 Speaker 1

1000 followers on Instagram it does.

00:34:01 Speaker 1

Not mean, Jack.

00:34:04 Speaker 1

The person who’s buying your business wants that and Instagram shut you down tomorrow. You need those people.

00:34:11 Speaker 1

In your own database.

00:34:14 Speaker 1

Put them on your e-mail list, put them inside of your database in some way, shape or form, because if you have 1000 followers, sorry 100,000 followers and only 5000 people on your e-mail database, then that my friends is going to devalue your business.

00:34:30 Speaker 1

Because, like we all know.

00:34:32 Speaker 1

That your Instagram your Facebook.

00:34:34 Speaker 1

Your tick tock could disappear tomorrow.

00:34:36 Speaker 1

And then the reason that your person was buying your business?

00:34:41 Speaker 1

It your your business, the sorry.

00:34:44 Speaker 1

The value that they.

00:34:45 Speaker 1

Put on your business just goes up in smoke. You still have your business, but the reason that they might want it.

00:34:51 Speaker 1

The reason that they might be spending the money, the reason they saw the value can just disappear. So if you don’t own your data and if you don’t own your IP then that could be the difference between someone paying good money and someone paying no.

00:35:08 Speaker 1

Now I feel like this conversation has kind of led me into.

00:35:14 Speaker 1

That you can get customers that.

00:35:17 Speaker 1

The ways that you can get your.

00:35:18 Speaker 1

Marketing and your brand out there that you probably haven’t.

00:35:23 Speaker 1

Thought of so.

00:35:24 Speaker 1

I’m just going to.

00:35:25 Speaker 1

Tuck that one.

00:35:25 Speaker 1

In my back pocket.

00:35:26 Speaker 1

And create a new episode on some really simple and probably some really cheap ways that you can look at getting your brand out there on somebody else’s real estate. But.

00:35:37 Speaker 1

For now, let’s just recap the things that you need to.

00:35:40 Speaker 1

Do that can.

00:35:41 Speaker 1

Triple the value of your business.

00:35:43 Speaker 1

First up was.

00:35:45 Speaker 1

Finances get your finances in order. You have to be able to make it through the due diligence process, but realistically you should have your finances in order anyway because that is the thing that’s gonna help you grow your business. Yeah, at the end of the day that your business is gonna be valued generally on.

00:35:59 Speaker 1

A multiplier of profit.

00:36:03 Speaker 1

Your profit. The server was. Make sure that your.

00:36:09 Speaker 1

Business can run without you.

00:36:11 Speaker 1

I feel like they’re all key, but that.

00:36:13 Speaker 1

One is going to that’s kind.

00:36:15 Speaker 1

Of have a triple the value of.

00:36:17 Speaker 1

Like as I said, the multiplier is on profit, but the multiplier goes up when you put these other things in place and that big one of the business being able to run without you is going to.

00:36:28 Speaker 1

Be like the.

00:36:30 Speaker 1

Killer the kicker? That’s going to be the.

00:36:32 Speaker 1

Thing that goes.

00:36:34 Speaker 1

And if you’re watching the video, you.

00:36:36 Speaker 1

Should have seen.

00:36:36 Speaker 1

That and then the last.

00:36:38 Speaker 1

One was making sure that you own your IP.

00:36:42 Speaker 1

Customers now with that said, one of the great ways for you to increase your profit is to make sure that your inventory is managed and you have as much profit in your business as possible. And if you need help with that, just a reminder that my Black Friday ultimate sales.

00:37:02 Speaker 1

Bundle is still up and it’s still gonna give you time to get your business.

00:37:10 Speaker 1

So that’s a wrap. I’d love to hear what insight you’ve gotten from this episode and how you’re going to put it into action if you’re a social kind of person. Follow me at the Selena night and make sure to leave a comment.

00:37:24 Speaker 1

And let me know.

00:37:26 Speaker 1

And if this episode made you think a little bit differently or gave you some inspiration, or perhaps gave you the kick that you needed to take action, then please take a couple of minutes to leave me a review on your platform of choice, because the more reviews the show gets, the more independent retail and ecommerce stores.

00:37:46 Speaker 1

Just like you.

00:37:47 Speaker 1

That we can help to scale and when that happens, it’s a win for you. A win for your community and a win for your customers. I’ll see you in.

00:37:58 Speaker 1

The next episode.