Your business is the product. Not the thing that your business sells. The business itself, the business that you are building, is the product. And once you see it that way, you can't unsee it.
So I sat down with a friend of mine who's been in private equity for 20 years and, you know, we're talking dozens of acquisitions, mergers, and I'm having this conversation because I'm right now evaluating some investment options for Repeatable Revenue Ventures.
And he said, you know, something that I want to document here, partly for myself and then partly for anyone thinking about selling their business or scaling it up so that it can be sold. And what he said was, you need to start thinking of your business as a product. Like a product that gets sold to a customer who buys that particular product.
And his customer, he's a PE guy. Like, the product he buys is businesses. That business might make widgets, it might deliver IT services, it might make other products, it might deliver other services, whatever. But the thing he's buying as a customer from private equity is the business. So the business is the product.
And here's why that matters. When we're building businesses, we tend to think, "Hey, just let me build the biggest, best business that I can. By doing that, I'm going to automatically maximize the value that I can sell it for." But what if you spend years developing and perfecting certain parts of the business, pouring resources and time and money into that particular thing, only to find out later that the future buyer of that business doesn't value those things?
And if they don't value it, they're not going to pay for it. And if your goal in doing that thing was to get maximum value, then you've wasted your effort. But when you flip it and you think, "The business is the product," you can play the tape forward. You can ask, "Well, what kind of product does my customer want to buy?" And then you can actually go find out.
So say you've got an MSP, like an IT company, that you want to sell in five years. What you can do, and what I'm doing right now, is reach out to people who will actually buy MSPs and IT companies and ask them. Like, find out: What makes a business really valuable for you? What do you want to pay for? What do you see in it? How do you value that particular business?
And when you get that intel, it changes everything about your decision-making right now. Because where you focus, what you build, where you invest your time, where you invest your money—all of it becomes way more strategic, far more intentional and deliberate, because you're building towards what creates value for the buyer, not just what feels like progress to you right now.
And that's what we're building into the Repeatable Revenue Ventures process right now. Like, we take a small number of companies, invest capital and time, and take them to the next level and sell to a future buyer. Well, part of that process now is just going to be fast-forwarding and having those conversations with the people that are likely to buy—future customers—understanding what they actually want, and then focusing relentlessly on those things, like almost exclusively, to create the most impact when it's time to sell.
Look, if your goal isn't to sell, this isn't relevant. But if your goal is to sell, it's a really important insight because the difference between a 6-multiple and an 8-multiple, or an 8-multiple and a 10-multiple, is a lot of fucking money. And I'm sharing this as much for myself as for you, solidify it in my brain, and I hope you find it as valuable as I did.
Adios.
