I’m going to make a huge generalization and say that the people who buy businesses are guys (and girls). More than The value creation system we coach owners on how to prepare their business for sale and we explain that buyers care about objective attributes. They understand the balance sheets and know how to manage around a pivot table. People who buy businesses on behalf of businesses have often gone to business school and are trained to be objective and impartial mercenaries, which is why they may downplay or reject the value of the name, logo and brand. the reputation of your business.
As short-sighted as you think their views are, you might not get very far in trying to convince a financial buyer to pay for something as intangible as your business name. Instead of fighting their natural tendencies, consider leveraging their position by licensing the use of your name for participation in future transactions it makes possible.
How Carl Gould Got Paid For His Company Name
In the early 2000s, Carl Gould gained notoriety in New Jersey for building high-end modular and log homes under the Outdoor Imaging banner. Gould has invested heavily to increase his reputation in the New Jersey market. He was a regular exhibitor at industry shows and had advertised in the phone book for years. Gould had printed and distributed brochures with his company name and phone number that were on refrigerators and in drawers in homes all over the state.
When Gould went to sell his business, the buyer wanted his durable goods and Gould to sign the development contracts he was committed to, but the buyer did not want to take Gould’s business name.
Instead of pleading with the buyer to value the brand he had built, Gould saw an opportunity. He made a deal with the acquirer that paid him about 10% of all offers from people calling the old phone number he had been advertising for years.
The acquirers agreed, believing that once Gould stopped advertising, leads from the old phone number would cease.
Despite stopping all of his advertising spending, Gould continued to receive regular calls to his old number. He had a brief call with each prospect and referred them to his new business owner. A few months later, a commission check would appear in his mailbox. This lasted for over five years, to the point that the total value of the commission checks Gould received exceeded the amount he sold his business for in the first place.
If an acquirer is unwilling to pay for intangibles like your business name, logo, or phone number, it may be worth offering a licensing program that allows you to financially benefit from loyalty and the goodwill you have built along the way. In Ep. 93 from Built to sell radio, I asked Carl about his experience of getting paid for his business name.