Last week I did a talk where the emcee introduced me by saying every service business needs to productize to scale up whereas every product company needs to ad service to avoid commoditization. Having run service businesses, I have given a lot of thought to “productizing” a service business but not as much to “servicizing” a product company.

But it makes sense. One of the reasons we’re willing to pay more for an Apple lap top (compared with something comparable from Dell) is the warm and fuzzy experience of shopping at an Apple store.

In terms of “productizing” a service, Jason Fried, the founder of 37signals and the author of “Rework”, had an amazing journey which he describes in the third — and my favorite —  of the four new articles on selling a business below.

How to sell a firm that depends on you

~published October 18, 2010 Globe and Mail

I thought you might be interested in the exchange I had with a reader recently.

Question: “I started a research company 13 years ago after working as an account planner and research director at advertising agencies for more than 15 years. (It was a) one-woman show . . . (and) later my husband joined me. We have worked together for the past decade or so, but kept it a small mom ’n’ pop outfit with the use of fieldwork agencies for support.

“Now my husband has been offered a job overseas, which he is planning to accept. I don’t have the energy to continue… »more

The secret formula used by buyers

~ published October 20, 2010 Globe and Mail

A funny thing happened when I was first approached by someone who wanted to buy my marketing agency: I forgot everything I know about sales.

Instead of listening to the customer and understanding his or her needs, I went into negotiations with potential buyers focused on my needs. I decided I wanted to get a certain multiple for my business but failed to put myself in the shoes of a buyer to figure out what he or she would be willing to pay.

It was a rookie mistake. Any first-year salesperson knows the first step when selling is to… »more

Jason Fried: the service-to-product switch

~ published October 20, 2010 Globe and Mail

37signals started out in Chicago as a three-person web design shop. Co-founder Jason Fried made a decent living but hated the feeling of being beholden to clients: “I found project-based consulting frustrating because we would work on a site for months and hand it over to the client, who would inevitably make changes and drag us through their politics. It was rare that what we actually built saw the light of day.”

Fried and co-founder, David Heinemeier Hansson, continued to serve their clients, but as their projects grew larger and more complex, they found themselves looking for a piece of software that could help them better… »more

Your Business, Your Rules

~ published October 21, 2010 BNET

I had dinner the other night with a business owner who was having trouble getting paid for his work. His company provides a service to other businesses and issues hundreds of small invoices of less than $200 each a month. The problem: At the end of each month, he looks down his list of receivables and typically sees 20 or more deadbeat customers that are more than 90 days late in paying. He then has to dispatch his bookkeeper to chase down his money.

I suggested he start processing customers’ payments on a credit card instead, reasoning that the 2 percent merchant fee would be worth it given the time and energy… »more