How to avoid losing customers when buying a business

Posted by James Price | JPAbusiness on 14-Jul-2021 02:00:00

There are a number of risks when buying a business and one of them relates to key customers taking flight in the early stage of the transfer.

In doing your due diligence it’s wise to look at customer concentration risk. Where you have a significant concentration of one or two customers, in particular, you should try and protect against that risk.

Here’s an example of how purchasers can use a ‘hard’ provision to protect against this risk in the final contract:

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Topics: Customers and Clients, Buying a business, Customers, selling a business, risk management, business sale

How to attract valuable customers [infographic]

Posted by James Price | JPAbusiness on 08-May-2019 02:00:00

 

Business value comes in two different ways:

  • during the course of operations, and
  • at the end, when you sell or pass on your business.

Many people run successful and efficient businesses, but don’t take the time to sit back and ask ‘what is actually driving the value in my business?’

Understanding those value drivers and focusing energy on them is the difference between having a business that runs efficiently today, and one that builds value over time.

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Topics: Customers and Clients, Customers, infographic, strategic planning

Are your customers adding value? [infographic]

Posted by James Price | JPAbusiness on 24-Oct-2018 02:00:00

Many people run successful and efficient businesses, but don’t take the time to sit back and ask: ‘What is actually driving the value in my business?’

Understanding those value drivers and focusing energy on them is the difference between having a business that runs efficiently today, and one that builds value over time.

Customers are key drivers of business value, but – as we know – not all customers are created equal. The following infographic contains 4 questions designed to assist you in assessing the make-up and value of your customer base.

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Topics: Business Value, Customers and Clients, Customers, infographic, business management

How to manage customer and supplier risk when buying a business

Posted by James Price | JPAbusiness on 16-May-2018 02:00:00

Last month I wrote a blog about how to avoid losing key staff when buying a business.

In this blog I'm sharing advice on how to manage another critical risk when buying a business: customers and suppliers.

This risk relates to key customers and/or suppliers taking flight from the business you’ve purchased in the early stage of the transfer.

In doing your due diligence it’s very wise to look at both supplier and customer concentration risk.

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Topics: Buying a business, Customers, Due diligence, Suppliers, risk management

How to improve cash flow with customers [video]

Posted by James Price | JPAbusiness on 28-Mar-2018 02:00:00

We often come across cash flow issues when working with new business advisory clients or conducting business valuations.

The issues are generally related to two main areas of the business: customers and suppliers.

In this video I'm sharing some advice on how to better manage those cash flow issues that relate to customers.

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Topics: Business Value, Customers and Clients, Customers, Cash flow, Working capital, Video, cash flow management

How to build a valuable customer base [cheat sheet]

Posted by James Price | JPAbusiness on 31-Jan-2018 02:00:00

When running a business, we all know it's important to have happy customers, but it's equally important to ensure we have 'valuable' customers.

Our new cheat sheet provides 4 steps to identifying and building a valuable customer base.

Step one is to determine the quality of your current customer base.

If you find quality is lacking in some areas – for example client diversity or payment times – follow the next steps to help you create a deliberate strategy for attracting valuable customers.

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Topics: Business Value, Customers, Running your business, cheat sheet, business development

Business transfer issues: Customers, Suppliers and Stock [blog]

Posted by James Price | JPAbusiness on 21-Oct-2016 03:03:00

From the JPAbusiness Strategic Business Insights blog archives

In this blog we examine the next three categories in the JPAbusiness Business Transfer ChecklistCustomers, Suppliers and Stock.

Customers

In our previous blog we talked about the financial issues related to customers, but there is a separate issue regarding customers and that is ‘relationships’.

A business may have 50 regular and loyal customers and yet 15 of those may represent 60% of the sales on a regular basis.

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Topics: Buying a business, Customers, Business transfer, Inventory, Suppliers, Checklist, selling a business

How to manage the 3 risks of a business purchase [blog]

Posted by James Price | JPAbusiness on 04-Aug-2016 04:30:00

 

There is no reward without risk...

Risk and return are two sides of the same coin and most people looking to purchase a business, if it’s not simply to replace full-time employment, should be targeting a return of between 20% and 50% on their investment over time, depending on the business and other factors.In our experience, the risks associated with business purchases fall into three categories:

  1. People
  2. Customers, Suppliers and Market Dynamics
  3. The Value Exchange
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Topics: Business Value, Buying a business, Customers, Staff, BME, Starting a business, Suppliers

 
Disclaimer: The information contained in this blog is general in nature and should not be taken as personal, professional advice. Readers should make their own inquiries and obtain independent, professional advice before making any decisions, taking any action or relying on any information in this blog. 
 
 

 

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