Rolodex: Your Last Asset or Your Best Asset?

• tamelarich
• February 10th, 2010

When I liquidated my industrial and environmental cleaning business I kept my customer list. While all my competitors claimed they wanted it, none wanted to pay me for it outright. I got lots of "earn out" proposals that promised to pay me a commission each time they did work for my clients, but I didn't want to put myself at risk that they'd lie about the commissions I was due.

While I wound down the business and licked my psychic and financial wounds customers continued to call me and I "brokered" their projects. I was wise to handle it this way instead of selling the list on a promise that I'd be paid for the work I sent -- of the three companies I sent customers to, two of them tried to cut me out of a commission and I ended up in court with one of the scoundrels.  If I'd simply trusted these guys to tell me when they did work for my customers I may not have seen a dime.

I wouldn't consider handing over a client list without a guaranteed upfront payment.

Let's talk about your Rolodex

Ultimately I decided to "follow my bliss" as a writer, but for awhile I considered becoming a manufacturer's rep selling to my former customers.  If I'd gone that route my client list would have given me a big boost.

If you're unable to stay in your current business, ask yourself these questions:

• If you're a service provider, as I was, can you turn your client list into a new business by selling them a product or other kind of service?
• Can you start a trade organization for former customers and competitors?
• Could you provide consulting services or start a subscription newsletter for former customers or competitors?
• Think about the potential product and technology opportunities you didn't have time to research as a small business owner.  Could you do that now and provide a research report to former customers/competitors for a fee?
• What about new technologies that your customers/competitors might be considering -- could you get in front of those sales/marketing departments and provide market intelligence to them for a fee?  Perhaps it could work the other way around, with your customers/competitors paying you to run interference with a rep on their behalf?
• If a competitor asks to buy your customer list, how can you properly value it? If you decide to sell the list, be sure to carve out the right to use it to sell those customers something your competitor does not CURRENTLY offer. You never know when an opportunity will come along.

If you're sure about shuttering the business but not sure what to do next, call clients personally to inform them of your decision to close.  It's the least you can do for the business they gave you.  Plus, you never know if one of them might have a need for your expertise -- as a consultant or employee.

Tamela's here for small business owners who are watching their dreams and livelihoods go up in flames. With the credibility of someone who's been there, too, she writes about dealing with creditors, the IRS, family members and your own inner demons. She now earns her keep as a business ghostwriter. http://TamelaRich.com

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