Why do people buy you?

If you knew the answer to the question, “Why do people buy you?” you would bottle it into a spritzer and spray it all over you every other day to attract the masses to your doorstep.  

So why do they buy you?   What are the unique attributes that separate you from the rest of the pack?   In answering this question you will begin to unpack the IP in your head and maybe for the first time you will see it neatly set out before you.

So stop for a moment and think about your product.   Reflect on its unique ‘herb and spice’ and give consideration to its complicated elixir that makes it your Coke.

If you are the only reason people buy YOU, then ask yourself this question, ‘How do you scale YOU?’   Would your business continue without YOU?   An important consideration especially if you are planning to sell the business.

But what if you need an extended stint away from the business due to sickness or because of other circumstances that are often hard to predict and plan for – in those circumstances the YOU in your business is a big liability.   It is the very thing that keeps you lying awake at night.

Listening to a presentation by Marc Johnstone, the founding equity partner of NavitasIP and Shirlaws Coaching, I gained some great insight into the importance of making sure YOU are not the ‘absolute essence’ of your business.

Johnstone provided a neat summary of how best to create value in your business.   In simple terms, remembering that I am no economist or accountant for that matter, the formula for determining your business valuation looks like this:

Valuation = profit x multiplier

So the critical issue here is to look at ways to increase the multiplier so that you are placed in a position to give a real kick to your overall valuation.

Johnstone explained it nicely with his explanation on how income follows the asset base of a business.   The explanation for this concept is set out in the following table:



Client Base


+ Staff

x 2

+ Systems

x 3

+ Product

x 6

+ Distribution

x 10

+ Position / Brand

x 15

+ Scale

x 20

Take a moment to think where your business sits on the multiplier spectrum.   If it is just YOU and your client base, then there is some work to be done if you want to drive your valuation in the short to long term.

I know that many who see themselves as a sole trader will struggle with the above business valuation in so far as they see themselves as the ‘entire business’ with little room to move.   Well, that may be the case, however, give some consideration to the following story that inspired me into thinking that anything is possible in the world of business no matter whether you stand alone or with others in your quest for business value.

UK personal trainer, Jean-Pierre De Villiers worked hard on building his personal training business.   However, he realized that he was the whole brand.  Without his constant effort and energy, there was no business.

So Jean Pierre separated his business into various components that dealt with separate training routines that focused on cardio training, weight training, core training etc.   He engaged people to look after these various areas using his systems and his business has exploded beyond his wildest expectations.

Jean Pierre no longer looks for clients, the client finds him.   He now endorses various supplements, has written books and has his own training videos.   His business has gone viral.

So look at ways that you can “Jean Pierre” your business and let there be less YOU in the business on a day-to-day basis that will give you the freedom to work on and not in the business.   The results will surprise you with a great kicker to your valuation multiplier.

Take the first step . . . unpack your IP now, set it out before you and look at how you can re-package it to maximize your business value.