Though happily married for 32 years, I have distant memories of my dating experiences. I’d occasionally have friends tell me, “I have somebody you should meet.” To which I’d always say, “Well, tell me about her.” If the response was “she has potential,” I’d politely decline the opportunity – run for the hills, actually.
Potential is a dangerous word to use when describing a potential date, and it’s a terrible word to use when describing why someone should buy your business. When I hear, “this business has potential,” I have the same reaction as when someone would tell me about a girl with potential. Potential is what you say when you don’t have something actually good to say.
Look, if you want to sell your business, never use the word “potential” when talking with a possible buyer. The best way to talk about your business’s future growth is within the context of what’s worked to grow your business in the past. The more specific, the better. I call it the “If This, Then That” rule. A business with a fact-based formula for growth will always sell for a premium. You want to be able to say: I did this, then that happened. Saying it this way lays a foundation for the business’s future by describing specifically what worked in the past. Instead of some vague notion of potential, you are saying to the prospective buyer, if you do this, then that will happen.
When I write a marketing package for a client company, I include a section called Growth Opportunities. I will only include specific ideas with specific plans: if this, then that. This approach gives the prospective buyer a tangible perspective on how the business can grow. This beats the heck out of saying, “she has potential.”
JIM CUMBEE is President of Tennessee Valley Group, Inc. a retainer-based business brokerage and transition mediation firm in Franklin, TN. Cumbee is an attorney and has an MBA from Harvard Business School. He has a wide range of corporate and entrepreneurial experiences that make him one of the most sought-after business transition advisors in the state of Tennessee. The names and fact patterns above have been changed to preserve the parties’ identities.
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