Creating a Valuable Business: Lessons Learned
If you’re considering starting a business, or considering selling one, knowing how to create a valuable business is key. No one wants to run or buy a business that is worthless. The question is, what is the best way to make your business valuable? According to Warren Buffet you need to find your moat. What’s your competitive advantage? Your niche? What sets you apart? This is what you need to find and need to focus on.
In this podcast episode on Built to Sell radio, we meet Mitch Durfee. Durfee started a moving and junk removal business called Grunts Move Junk. As a veteran, his goal was to create a business that could help other veterans get back into the workforce. The business was successful. Junk removal was a great niche to find and soon the company began getting requests from its clients: do you do landscaping? painting? cleaning? Durfee said, “yes!”
As the owner of a young business, it seems smart to say yes to everything that could bring in more revenue, right? After all, at the end of the year in which Mitch said “yes” to everything his company was raking in 1.4 million in annual revenue. BUT they had also taken on a lot of debt from big projects that weren’t properly handled. If you listen to the podcast you’ll see that Durfee had to make some tough choices and scale back.
Scale back? With 1.4 million in revenue? Yes. Scale back. For the sake of his company and his employees, Durfee went back to that niche. Back to junk removal and moving services only. He and his team were more productive because they created systems; they knew what to do each day when they came in. There was a plan in place. Because of this, workflow was smooth.
The company also began creating relationships with other businesses who specialized in things like painting, cleaning, landscaping…and they referred their clients to THOSE businesses. In turn they often got kickbacks from those projects. So even though they scaled back on the services they offered, they still were profiting from those same services. At the end of that year? They made 1.2 million.
After some tough learning experiences, Durfee was able to create a valuable company, and expand it to several other locations by:
Finding and (eventually) sticking with his competitive moat. He found his niche.
Creating systems that helped his employees be more productive each day.
As Mitch Durfee says in this interview, “Your business is your identity.” We want your business to be as successful as possible. Following some simple steps like this can help you to create a valuable business of your own.