Low Hanging Fruit for New Owners

Low Hanging Fruit for New OwnersEven in the last decade we may have been astonished at the pace of change in technology just in our personal lives. Imagine what it’s been like for businesses, and even more so, for businesses more than ten years old. But in that change lies a lot of opportunity, and we often see a lot of prospective buyers’ eyes light up when they hear how “behind the times” a successful business is. That’s because being “behind” technologically signals a whole lot of opportunity. 

If a business is successful despite not having a website (or a good one), or the owner thinks SEO is some new band the kids like these days, or the 1970s is calling, asking for their branding back, that means customers like or need the products and services enough that they don’t care. 

But that also means that every effort into these areas will gain new customers and enhance links with the ones you already have. Bottom line? These changes offer a lot of upside with not a whole lot of investment. Here are some areas that buyers should be scrutinizing during diligence, to add to their “get this improved ASAP” list.

Bad Branding

Sometimes companies are long overdue for a brand refresh or even a rebranding. The logos and taglines were done ages ago when the company first started out and haven’t been touched since. This may have been because the company has been doing well and it hasn’t been top of mind. But that doesn’t mean that an improved brand won’t gain more business.

This is especially true if that improved branding is seen on window displays or vehicle wraps or other advertising venues.


Websites have come a long way from the equivalent of hanging an online shingle. Today’s websites have to perform many key functions. Just a few of them include:

  • Brand representation — does your company look professional through a clean and easy to navigate website?
  • Consumer education — customers now come to websites to learn about the products and services you offer. Do you have content for them, in audio, visual, and written form, that they can consume in their preferred format?
  • Email capture — is there a way for website visitors to get on your mailing list so they’re getting your news, information and offers?
  • Call to action — now that they’ve found you and educated themselves, do you give them an opportunity to act, whether that means giving you their contact information or actually making a purchase?


One of the keys for any business is getting found in search, whether that’s through traditional searching by keywords, or newer forms of search like voice through tools like Siri or Alexa. You can earn your search ranking through solid and persistent content or you can pay for your ranking. Either way, potential customers can find you, but if you’re not doing any SEO, you’re not even there to be found.

No Backoffice Tech

There are so many pieces of software out there that make life easier for business owners and allow them to collect data on their prospects and clients. But many businesses are still functioning with paper and pencil…and fax machines (seriously!) Again, there’s nothing wrong with that. These businesses have been successful for a reason. But without that tech assist, there’s a ceiling as to what they can do.

With communication tools like Slack or marketing tools like Hubspot or SEO research software like Ahrefs, the sky’s the limit as to how you can communicate with your team or keep customers in your sphere of influence or what you can know about the customer journey.

Final Thoughts

None of these changes will cost new owners a lot of money. In fact, they are all classic examples of low investment, high return. And remember, the reason these changes were never made is likely because the owner wasn’t aware of them, because they were too busy running a successful business. That’s a good problem to have, right? And it’s even better to, in a way, gift these easy wins to the new owners. 

If you’re looking for businesses that offer these early easy wins, we’ve always got new ones listing each week. But call us soon, as they tend to go fast.

The Magical Myth of the Absentee Owner

The Magical Myth of the Absentee OwnerSo, we’re a married couple that would like to keep our jobs, and we’re looking for an absentee business that can add another $50,000 a year to our income.” We’d love to say this is some fictional scenario but almost every broker in the office gets one of those calls at least once a month. For some reason, there’s a segment of the population that sees a business like a washing machine that you can program and leave and just periodically show up at for a check. Even better than that, in fact, because you still have to dry and fold your own laundry.

Yes, such absentee businesses exist, and yes, it’s possible for a business owner, in time, to create an absentee business, but having it seamlessly function that way from day one is an expectation that potential business owners should flush from their minds.

What Do You Want?

After we get the query we alluded to above and take a bit of time to hear out the potential client, we are generally going to follow up with, “What are you looking to get out of this?”

“Some extra income.”

Such an answer indicates a perspective that considers $50,000 a year of income as chump change compared to high-powered corporate jobs, so simply keeping that business going will be pretty easy, right?

But this is the perspective of an employee, not a business owner.

An employee thinks that he/she can show up somewhere for a certain number of hours and get a paycheck regardless of what happens to the business.

Business owners know that sometimes they can work 80 hours a week and still not get paid at the end of the month.

A business that can generate a respectable $50,000 of income a year requires a commitment of time and money and should not be thought of as a “part-time job.” We’ve seen relationships fall apart and marriages get tested because people bought businesses thinking they were simply part-time projects that could be done outside of working hours. 

That’s simply not reality.

One Shortcut: Industry Knowledge

While we still maintain that you can’t seamlessly take over an existing absentee business, one way that this would be even remotely possible is if you have deep industry knowledge.

For example if you want to buy a printing business and have previously owned a print shop or have worked in the printing industry for many years, you’re probably not going to have to spend a lot of time learning the lingo of the business, or finding out how the machines run, or considering who the best and most reliable suppliers are.

But, you’re still going to face the same challenge that all new owners face: meeting the employees, making them comfortable, and retaining them long term.

That’s not something you can do on the nights and weekends, not something you can do “absentee.”

It will take time, and only after that time has passed, at least 6-12 months, you might be able to transition the business into an absentee one.

Final Thoughts

There’s nothing wrong with aspiring to own an absentee business. We’ve bought and sold many in our time. But it’s wrong to think you can run a business as an absentee from day one as a new owner.

What makes more sense is sharing with the seller that this is a goal you are shooting for so that you can find out what steps and what timeline would be necessary to make that happen…from someone who would know.

If you’re looking for an absentee business so you can be an absentee right away, we can’t help you. But if you’re interested in putting in the work to make a business an absentee one in the future, give us a call.

4 Pillars of Employee Benefits

Employee BenefitsEmployee benefits in the United States are costs that are underestimated by employees and employers.  Employees don’t often appreciate what an additional financial cost these benefits are above and beyond a salary.  Employers often miss just how much employees value (and brag about) these benefits.  Businesses that are built to last (and sell) have four key pillars of employee benefits in place and in this article we will speak briefly about each of them and share why those pillars provide a firm foundation for business owners.

Health Insurance

This is a well-known benefit that has had its ups and downs in the last decade due to changes in federal legislation.  But it’s routinely one of the most important benefits potential employees ask about.

Employers should realize that health insurance is just as much peace of mind as it is doctor’s visits and prescription drug coverage: employees know that in the near and medium term, one aspect of their life is “handled.”

Health insurance should not be underestimated as a key recruiting tool and differentiator.  Deeper and more comprehensive coverage that the basic level is not inexpensive, by any means, but employers should consider that it’s a benefit that can pay for itself, in many different senses of the word.

Small Business Health Care Tax Credit

Some small businesses can qualify for tax credits.  Broadly, all of the following conditions must apply:

  • Fewer than 25 full time employees (FTE)
  • The average employee salary is less than $56,000/year
  • The business pays 50% of the premium
  • The coverage is offered to all FTE  

The general rule is the smaller the business, the larger the credit on offer.  Learn more (and use an estimator) here.


Post March-2020, more and more employees are thinking actively about their futures.  Offering some options that include company matching is a way for employees to check off another box on their life planning list, this time in the “long term planning” category.

A major mistake that employers make is giving employees many investment choices.  This is difficult enough in the cereal aisle, but it’s paralyzing to many given the life implications of retirement planning.  Do the hard work of coming up with two, maybe three choices for your employees, covering various situations and risk profiles.  This will simplify the process for them and make it more likely that they will participate.  Companies have to pay a charge for administering the program regardless of how many participate in it, so employers might as well get the mileage out of it that employees are hoping to get as well.

Depending on your company makeup and situation, profit sharing might be worth incorporating/offering as well.

Paid Time Off

American work culture tends towards overwork.  While there isn’t yet an English word for “death by overwork” (karoshi in Japanese) many Americans leave vacation time untaken (or would rather sell that time back), leading to an unhealthy imbalance between work and real life.

The extreme reaction to this imbalance from some Silicon Valley companies has been to offer “unlimited” vacation, though how this works practically is still very much a work in progress.

A more interesting solution is the Swedish one: employees get paid more during their vacation days, giving a financial incentive for people to actually take time off for themselves.  Like many of the Swedish work experiments, it’s been successful.

Encourage people to take off for themselves and lead by example.  You don’t need to go anywhere exotic, you just need to signal that you value people’s personal lives, which is one of the big reasons they show up for you in the first place.

Remote Work

Before March 2020 remote work may have been considered a luxury enjoyed by the few but as companies consider what to do with their office space long term they should consider the fact that a growing segment of Zoomer workers put a remote work option in the same hallowed category as health care or even above retirement benefits (what’s that?).

The last two years have given observant employers plenty of time to consider how their businesses operate remotely vs in person and those who insist on in-person employment will need to have considerable offsetting benefits to compensate for that perceived loss.

If you need help implementing one of these employee benefit pillars, we know some consultants who can help.  Give us a call.

Audit Your Expenses to Boost Profitability

audit your expensesOne of the easiest ways to boost profitability is to cut unnecessary expenses or to save on the necessary ones.  The former might seem fairly obvious, but did you know that there are consultants out there to help you with the latter, and that they often don’t ask for pay unless they’ve returned results?  Let’s talk about how they do it.

Enter Cost Analysts

There are companies whose entire business consists of finding cost savings.  They don’t often don’t charge an upfront fee, but rather, take a percentage of the savings for a set amount of time in exchange for their work.

Generally what they are going to need are your invoices and any contracts or agreements you may have signed with various service providers.  They will then audit these invoices to make sure you’re getting charged appropriately and, if necessary, renegotiate for better rates.  Errors and overcharges happen all the time; most business owners simply don’t have time to put forensic-level attention on monthly bills.

Where Can I Find Savings?

There are lots of places to save, starting with a place you might not expect: your bank.  We’re the first to tell you about the importance of developing a banking relationship but sometimes a cost analyst can give you context you wouldn’t otherwise have.

In one case study we examined, a client had absolutely no desire to change banks but was told they were overpaying fees to the tune of $32,000.  When the client went to the bank with the report from the cost analyst, the bank offered to reduce the fees by $9,000.  The cost analyst then gave the client the report that showed the bank was not charging market rates given the existing relationship.  They changed their tune and came close to a $30,000 total reduction in fees.

Another well-known place to find savings is with shipping.  Freight auditors have long studied freight and shipping bills to make sure packages and shipments arrive on time and if those shipments did not arrive on time, to demand the refunds that are part of the shipping agreement.

The possibilities are endless: office supplies, cell phone bills, waste management, cleaning services, merchant fees, utilities, even your real estate leases.

Why Use Professionals?

Well, just like anything in life, you can opt to do something yourself, but do you really have the time or expertise to audit all your bills?  As we mentioned above, most of these types of businesses don’t charge an upfront fee and only take a percentage of savings as compensation for their work.  Once that’s repaid, you’re left with the savings and the experience to make sure that you continue to keep an eye out on all your commitments and contracts.

There are plenty of good firms out there but two that we’ve heard good things about are P3 Cost Analysts and Expense to Profit.  Both boast glowing customer testimonials and millions of dollars saved.

These are the decisions you can make now to make your business that much more profitable in the short to medium term, and that much more valuable when you decide it’s time to exit.

Looking for some help to get started identifying places where you can save?  We’d love to look over your financial statements with you.  Give us a call today.

This Year, Focus on the Essential

PrioritiesOne of the drums we often beat in these articles is the importance of delegation but as a new year begins, it might be helpful to look at the question of delegation through the frame of what it costs a business owner not to delegate.

Where Do You Shine?

When starting a new business entrepreneurs wear dozens of hats, “chief janitor” almost always among them.  It’s an exciting time, and bootstrapping and being careful with spending in those early days pays off not just in cash flow but in knowing inside out the roles you hope to delegate.  But that delegation has to happen as soon as (or sometimes, even a little bit before) cash flow allows for it.  Because the key question is, “What’s your time worth?”

Whatever number you come up with, start going through the tasks you currently have on your plate and ask yourself if this task fits with the unique skill sets you bring to the table.  If not, the company is in all likelihood overpaying you.

The easy example is the “chief janitor” role.  Clearly there would be someone else who could handle such duties who doesn’t add the same value that the business owner does.

A more subtle example would be an email newsletter or a blog that a business owner refuses to delegate because he/she thinks no one else can do it.  But even if such business owners only value their time at $150/hour, and a writer charges $75/hour, the company is paying roughly double the market rate for these services.  Is it likely that the business owner writes twice as well as people who only write for a living?  No.  

Business owners have to be ruthless: every single task that takes up their time needs to be audited and held up to this scrutiny.  Don’t let the company overpay you for your services.  Stop with the chief janitor stuff, already.

Another Frame

One of the books we really love here at Apex is Marty Neumeier’s Zag. One of the points of a brand audit he proposes is to answer your company’s  “only _____ that _____.”  For example, “the only plumber that can be at your home in 90 minutes or less” or “the only sales coaching with a money back guarantee.”  You can apply that same frame to your task list.

Am I the best person at the company for _____ task?

Am I the only person at the company for _____ task?

If the answer to the first question is “Yes,” hopefully the task fits with your skill set, because it probably means that’s where your own company is getting its best value with you.

If the answer to the second question is also “Yes,” then this probably belongs on your list, unless that task is not an area in which you shine, in which case maybe it’s time to bring in someone who is better than you at that task.

When you start to realize that failing to delegate not just costs you time, but costs your company, and hence you, money, you might arrest the desire to put out every fire, fix every problem, and insist that only you can handle a task.  Business owners who don’t delegate don’t make their businesses attractive propositions for buyers, whose eyes can glaze over when these sellers list all of their daily and weekly tasks.  No thanks.  

Almost all entrepreneurs who have successfully exited their businesses have learned the lesson of delegation, and the sooner they learned it, the bigger their exit was.

Are you having problems delegating or identifying where you add the most value as a business owner?  We’d love to talk with you and help you figure that out!

Why Your Business Should Consider an Email Newsletter

Email NewsletterEmail newsletters have been around a long time.  There’s a simple reason for that: they work.  99% of email users check their inboxes every day (some up to 20X a day!).  58% of consumers check their emails first thing in the morning.  So why should your business consider a regular email newsletter?  We’ll tell you!

Expertise and Thought Leadership

You know a lot about different aspects of your business and industry.  You can talk about issues that are timely or on frequently asked questions that you’d like to elaborate more on.  A newsletter allows you to be seen as an authority on a certain subject or set of subjects and this can open up opportunities both locally and elsewhere.  It also builds up customer goodwill as people love to learn about things they care about.

Remember too that not everyone buys on first, second, or even third glance.  Think about email newsletters as one more part of a drip campaign of consumer education.


As much as you might know about your business and industry, there are plenty of subjects where you might need an assist.  That’s where you might feature a vendor, a business, a local resource, etc.  An email newsletter isn’t just for your business: it’s a chance for you to share your business’ social capital strategically.  On the other side of things, a large and engaged email list is something that is attractive to potential collaborators.


We know businesses who say every time they send an email newsletter they get at least one sale.  This often happens when nothing in the email newsletter said anything about the particular service or product that the customer ended up buying.  What happened was the email served as a reminder.  The email hits the inbox and the customer remembers, “Oh yeah, I need to call them about X.”  


While the obvious marketing might be to the customers you already have, the hidden power of an email newsletter is in the “forward” button.  Your customers likely know other customers like themselves who don’t yet know you.  When those potential customers hear about you via a forward from a trusted friend, they will give it more attention than they would a cold email.  

Furthermore, email marketing, unlike many other types of marketing, can be closely tracked by open rate, click-throughs, etc.  Given the costs of most email newsletter programs, it’s likely to be among the least expensive types of marketing you do in any sector.

This is to say nothing of what an engaged email list can mean to your business valuation when it comes time to sell.  It’s one of those intangible assets that you can’t suddenly build up during a due diligence period.  It’s something you have to build over years.  

So start now.

Convinced that you need a newsletter but aren’t sure where to start?  We know some people who can help you put one together and a plan to send one regularly.  Give us a call and we can connect you!

Should Your Business Consider a Four Day Workweek?

Should Your Business Consider a Four Day Workweek?One of the benefits of the global upheaval caused by the pandemic has been the willingness of many businesses to try out working arrangements – like remote work – that they would never have previously considered.  An idea that has started to get some attention (they even have a dedicated website spawned from a book) is a four day workweek.  This idea isn’t right for every business, but every business should at least examine the idea.

Historical Workweeks

In 1890, the US government estimated that a full-time worker in manufacturing worked an average of 100 hours a week.  By 1926 this started to change, but not due to great empathy for the working class, but because Henry Ford had instituted a 40-hour workweek at his factories, guessing (correctly) that this would give more leisure time to his workers who might then opt to buy cars that they could use in that off time.  Other companies and sectors followed suit, and thus we had a 40 hour workweek that some consider a “given” but is not even 100 years old.

So too whenever companies consider raising prices on a product, they examine how many customers they might lose at the new price point.  If that is financially counterbalanced by the number of customers who will stay on at the higher price point, then there’s at least some merit to make the change, just on a financial level.

So too, when considering a four day work week, the thinking cannot be to simply put 40 hours into four days, instead.  The thought has to be to reduce the expected number of working hours.  This obviously means an implied raise for both hourly and salaried workers.  What can employers expect to get for that investment?

Counterintuitive Improvements

One thing they can rightfully expect is a massive jump in productivity.  An oft-cited study is one done at Microsoft Japan, in 2019 (before the pandemic) in which productivity jumped 40% and employees took 25% fewer days off during the same time period.  It doesn’t take complicated mathematical modeling to prove that if you reduce your work week by 20% (going to a four day week) but get a 40% jump in productivity, you’ve realized a massive gain.  Even if your company were to only achieve half of Microsoft’s results, you’d still be at the same level of productivity across fewer days.

This correlates with the fact that of the ten most productive countries in the world (the US recently fell out of the top ten in several versions of that index) only two of them have average workweeks of more than 30 hours (Ireland and Switzerland).  While it is an accepted truth in the US that the greater the number of hours worked, the greater the productivity, the statistics simply don’t back that up.

The Microsoft Japan study is also particularly interesting given that it was conducted in a country that has an actual word – karoshi – for death by overwork.  It doesn’t take peer-reviewed studies to show what common sense would point to: a shorter work week means:

  • More help for parents who want to spend time with their children (which leads to a more balanced and diverse workforce)
  • A recruiting edge among new hires
  • A cost savings on utilities and energy for almost 10% of the year for companies that operate in-office (the same Microsoft study showed an electricity savings of 23% and showed printing down by almost 60%)

How to Evaluate If This is Right For Your Business

As we noted above, this isn’t right for every business, but every business should examine whether it might make sense for them.  Key questions to ask:

  • Do employees want it? (just because employees don’t ask for it doesn’t mean they wouldn’t be open to it)
  • What day of the week would it be? (Mondays and Fridays may be key days for your company, so those might not necessarily be the best days)
  • How would we test/implement it? (a trial period, as Microsoft Japan did, allows everyone to “try before they buy”)

Tips for Success

The companies that have successfully moved to a four day week consistently do the following:

  1. They limit the length and frequency of meetings (something even five day workweek companies would benefit from)
  2. They allow undisturbed “deep work” blocks for their team members
  3. They are smart about technology use (people aren’t expected to respond to emails sent at 9pm on Saturday night)

A reminder that this is a non-starter if you’re simply trying to compress 40 hours into four days instead of five.  Not only will this fail to produce the same effects of the studies cited above, but you’re likely to have a detrimental effect on your team.  You have to think the way that Henry Ford did: fewer hours at work means more hours of personal life, and those workers with more personal time tend to be more productive during the fewer hours of work time.  Even better, you can test this theory before committing to it as a permanent change for your company.

One of the most important assets in a business sale is your team.  If you’re wondering how to make sure they stay on during a transition, we’ve got some tips and ideas to help you with that.  Give us a call!

Rebrand or Brand Refresh?

Rebrand or Brand Refresh?One of the most important intangible assets that cannot be altered when you take your business to market is your brand.  Making sure that your brand has the right voice/look/feel is a process that takes months, then years.  That’s why those business owners who know they want to sell in the near future should examine whether their brand needs a refresh or a rebrand in order to add value when it comes time to finally list their business for sale.

Know the Differences


A refresh is often thought of as a makeover or a new paint job.  This new look can include one or more of the following:

  • A different color palette
  • A new font
  • A new logo
  • A slogan update

All of these will lead to new marketing materials.  A brand refresh is generally not considered risky and will only involve moderate costs.


If a refresh is a new paint job, think of a rebrand as a complete tear-down and rebuild from the ground up.  All of the elements of a brand refresh are at play, but in all likelihood a logo is the minimum change that will happen.  The brand name itself doesn’t have to change, but in many cases it does.

While the ideal is to rebrand on your own terms, sometimes companies have to rebrand reactively, as in the cases of bad publicity or copyright/trademark infringement.

Why Make a Change?

The reasons for rebranding and refreshing often overlap.  They include:

  • A feeling of being outdated
  • A change in business strategy/growth in a new direction
  • A change in business audience
  • Growth in competition
  • Current marketing is stagnant
  • A lack of consistency with current branding

With mergers and acquisitions, often a rebrand is required so as not to confuse the pre-existing customers of the formerly independent companies.

Which to Choose?

The cost of time and money for a rebrand is significantly more than for a brand refresh.  Unlike with a refresh, with a rebrand you will need to go back and rebuild from scratch your:

  • Brand voice
  • Brand manifesto
  • Brand story

Whether you choose a rebrand or a refresh you will need to deliberate with your team and do your research.  What do other companies in your industry look like/have for slogans?  How will you stand apart?

More often than not, the arguments your team will make for “why change” will guide you as to whether you should do a brand refresh instead of a rebrand (and vice versa).

Brand Refresh Examples

Brand refresh examples happen with great velocity at tech companies and are most frequently recognized by users who see that a favorite app suddenly has a different appearance after a software update.  Examples include Paypal (new logo), Instagram (new color palette), and Uber (new font).   

Many app users are typically unfazed when they see a logo refresh, as they are trying to use a service, not contemplate the appropriateness of the design.  But as with a new hairstyle, with few exceptions, they often quickly get used to it as “normal.”

Rebranding Examples

Successful rebranding examples abound.  Years ago Old Spice, using a series of funny ads featuring Terry Crews, moved from being the staid brand that your father or grandfather used to being the choice of a new generation.  More recently Dunkin’ Donuts capitalized on the runaway success of its coffee to become simply Dunkin’.

A local Kansas City rebranding example that was both proactive but also dealt with trademark issues was Oklahoma Joe’s becoming Joe’s Kansas City.  The restaurant did a good job of explaining why the change occurred and nothing really changed business-wise (though people did keep calling it Oklahoma Joe’s for a while).

Another, more traumatic rebrand occurred some years ago when the then-Kansas City Wizards became Sporting Kansas City.  The new name reflected the aspirations of the owners to enter the global stage of soccer.  While the name caused plenty of resentment among the small hard core of Wizards fans, the rebranding brought in so many new fans that the protesting majority was drowned out, and before long, many didn’t even remember that the team was ever named anything else.

An example of a rebrand that was so traumatic that it only lasted 6 days after being shelved happened in 2010 when Gap spent $100M on a rebrand that was so poor that it was entirely rejected.  But a year later an even more disastrous rebrand was axed before it was even launched: Netflix’s launch of “Qwixster.”  The story was memorable enough to be turned into a case study at Yale.

Are you contemplating a brand refresh or entire rebrand?  We know great creatives who can help you.  Give us a call and we can connect you.

5 Basic Value Drivers for Your Business

5 Basic Value Drivers for Your BusinessWhen we talk to potential clients about listing their businesses with us, we speak about value drivers early in the process.  Often these value drivers are aspects of the business that have been developing over many years so they aren’t things that can be scrubbed or tweaked over a period of weeks or months to add some “curb appeal.”  The more time that you spend developing these five basic value drivers for your business now, the more you will be able to ask for that business in the future.

1. Market Position

How much of the market share does your business own?  The relevance of this number will, in part, depend on whether you are a local, regional, national, or international business.  But it will also indicate the potential for growth.  

You don’t have to be number one to be valuable.  For years Avis took advantage of being #2 in the rental car industry to drive an advertising campaign: “We Try Harder.”  

While business buyers like to see some potential to grow a market position, even if you are in the #1 spot, you’ll leave money on the table come sale time if you don’t develop some of those potential markets yourself.

2. Brand Name

As with market position, the quality of your brand name is related to the relationship of your brand to your market.  A classic example in our home market of Kansas City was the iconic “Oklahoma Joe’s” restaurants.  One of the locations was in a gas station and Anthony Bourdain famously listed it as one of the “places to eat before you die.”

Because of a business buyout between the original partners of Oklahoma Joe’s, a decision was made to change the names of the Kansas City locations to Joe’s Kansas City Bar-B-Que.  Because the brand had built a following based on the quality of their ingredients and because the new name wasn’t that different, the business continued on just as well under the new name, and for some years after people still called it “Oklahoma Joe’s” the way that people called the Willis Tower the Sears Tower.

Business buyers like to see strong, recognizable brand names with proper legal protections when necessary.  Make sure that your brand does the quality of your products and services justice.

3. Customer Lists

When it comes to customer data, there’s no such thing as “too much information.”  You should have a CRM (customer relationship manager) that collects as much information as you can about your customers.  You should also be communicating with them in a regular manner so that they are used to receiving information from you (and forwarding it to potential customers).

Business buyers are always more interested in customer lists that are current and customers that are kept in contact with regularly.  Take the time to communicate with your customers on a regular basis.

4. Barrier to Entry

Some businesses require extensive accreditation and others have high capital requirements.  But many businesses just have the regular barrier to entry: a willingness to work hard.  

If your business doesn’t have a high barrier to entry, you can deliver your service so desirable that you create a preference in the marketplace and erect a de facto barrier.  Jimmy John’s did this years ago with their “freaky fast” delivery promise.  Most people did not realize that Jimmy John’s had done this by carefully mapping their delivery areas, accounting for roads and traffic patterns, in order to be able to deliver this service.  They then raised the bar in a cutthroat industry as satisfied customers began to turn to them more often than to the competition who did not offer “freaky fast” service.

What barrier to entry can you create by excelling in an aspect of your product/service delivery?

5. Proprietary Anything

Related to barriers to entry are proprietary methods.  We are familiar with KFC’s special blend of herbs and spices and Coke’s “secret formula” but some businesses today use proprietary software or processes to catapult them into strong positions.

In addition to being popular with customers (when executed well), proprietary aspects of your business give employees a point of pride: it’s always great to work at a business that has that something extra.

Do you do something that none of your other competitors do?  If you haven’t leaned into that and communicated that to your team and customers, you’re missing a chance to drive the value of your business.

Are you unhappy with your business’s position in any one of these categories and want to improve?  We can offer advice and resources to help you do just that.  Give us a call!

Should You Have Business Interruption Insurance?

Should You Have Business Interruption Insurance?After the early days of Covid, those businesses with physical locations which did not have business interruption insurance may have benefited from government programs which helped with payroll, for example.  Now, as some court rulings have come down and insurance policies have been modified to account for previously unheard-of events like “stay at home” orders that lasted months, it might be a good time to explore this coverage for your business.

What is Business Interruption Insurance?

In brief, business interruption insurance is income and expense replacement for a business until it can re-open.  It is perfect for retail businesses that are physically customer-facing, like restaurants, salons, and movie theaters.  It’s most often used by businesses with 100 or fewer employees and with $5M or less in annual revenue.  

Those businesses that work remotely or can easily work remotely might still consider Contingent Business Interruption insurance, which envisions your vendors being affected by interruptions, even if you are not.  This form of insurance will cover the product and service suppliers that deliver to you and sometimes even covers second-tier suppliers.  

What Triggers Payout?

Most policies envision events that render your business unable to open to the public, like:

  • Fire damage
  • Damage from wind or falling objects
  • Lightning 
  • Theft
  • Riots and vandalism

The last item, riots and vandalism, can sometimes be specifically excluded.  Additionally, riders can sometimes be added to cover losses due to suspension of utilities, flooding, earthquakes, and mudslides.  There is also coverage if the civil authority prevents people from entering your premises.

If your insurer agrees to pay, it will be during what is called the “restoration period,” which starts when the damage was incurred and ends when the property is repaired and once again accessible to the public.  Some insurers impose a 48-72 hour waiting period before the restoration period even begins.

That said, even if your policy is set to expire during a restoration period, the payouts will not be affected.

What Costs Are Covered?

There are two items insurers will consider when paying out your policy:

Net Income (what would your business have made if it had been open during the restoration period?)

Operating Expenses, including:

    1. Rent
    2. Payroll
    3. Taxes
    4. Loan payments
    5. Some general operating expenses
    6. Move to a temporary location and any equipment needed to set up there

What Does It Cost?

The three key elements of determining the price of your policy, apart from special riders, are:

  • Your Industry
  • The number of employees you have
  • Amount of coverage you want

What Happened With Covid?

Well there isn’t a single answer here.  In some cases the courts have sided with the insurers and in other cases with businesses.  For a frame of reference, one can look to 9/11.  When President Bush spoke of an “act of war” some days after the attacks, he used a word that is often specifically excluded in policies: war.  This led to a lot of wrangling in courts.

A closer analogue to the shutdowns many experienced in 2020 was the case that United Airlines filed against its insurer after 9/11: the airline wanted compensation for the fact that Reagan National Airport was closed and hence United could not operate their flights.  United lost the case in part because the building was not closed for reasons of physical damage.  

On the other side of the coin, business owners in Michigan won a case regarding Covid related to imposed curfews from the governor.  The courts agreed that this triggered the reference to “civil authority” we spoke about above.  People were prohibited from entering these businesses due to a curfew and hence insurers in this case were obliged to pay.

On top of these court cases, at least ten states have introduced legislation to retroactively include coverage for Covid in business interruption policies in their states.  If those laws pass there will certainly be court challenges from the insurers, and it may be years before it gets sorted out.

In the meantime, you might use this time period to revisit whether business interruption insurance makes sense for your business.  If there’s one enduring lesson all businesses have taken from the pandemic, it’s to prepare for the unexpected.

Need some references to companies that offer good business interruption policies?  We are happy to share some.  Give us a call!