My guest today is Karim Marucchi, the CEO, and owner of Crowd Favorite. Today we discuss the misconceptions people have about web-based businesses, in particular, digital service businesses. Many people assume that because a digital business has no inventory there isn’t a way to sell it. Karim debunks that type of thinking. He explains how a service company, especially a digital company, can find the right buyer if they put the work in and build the best brand and service possible.

We explore what makes a service business valuable and how to scale it effectively. Karim offers some great insight on how to build the best team for your niche. He also emphasizes the role of partnerships in digital business and how to make a business connection your ace in the back pocket.

What you will learn about:

Karim’s background in business.

What are professional services?

How digital services are similar to the restaurant industry.

The 2 types of sales that digital founders do most often.

The real value of a business.

How to build a profitable reputation.

How to overcome the hurdles in the digital business model.

What successful business owners do in their business.

Finding your strengths and building your digital business with them.

How to build an effective communication system within the company.

The way business culture evolves organically.

How to find the right business partner.

How to avoid burn-out.

How to identify your musts in a sale process.

The reasons owners sell their companies.

The right reasons to sell a business.

How to negotiate a smart earn-out agreement.

Digital services is a tricky market. Since there’s very little that’s tangible about these businesses, valuing them can be difficult… but, as today’s guest notes, goodwill can be measured. Karim Marucchi talks about the similarities between digital services and restaurants in terms of goodwill, brand and staff and how to capitalize on those key elements.

Would You Like Fries With That?

Service, service, service. Restaurants might be a cheesy example to use (pardon the pun), but it’s a very visceral one which can provide concrete and familiar examples for us to better digest the intangible world of digital services. However, both require a high level of service where the customer is very rarely wrong. Why is that?

Digital services are just that: digital. You can’t touch them, but they add value to every business and most individuals around the globe. Knowing this, there is an industry for each service created and if you’re in this type of business, you need to be able to cater your company to meet those needs. We’ve discussed adding recurring revenue to your business before, so imagine what’s possible if you begin employing digital services?

If you know your niche, you can usually add a plus or upgrade (think: fries) to that client’s portfolio.

What’s for Dinner?

As Karim notes, no restaurant specializes in all kinds of foods. The same applies to digital services. While you may be able to do everything under the sun, your business should focus on the three or so things your business does the best. You go to Pierre’s for fine French cuisine, not Thai, though you could still get your fill