There are two ways a good, up to date database of contacts (certainly customers and prospects but also vendors, employees, and other key people) adds value to your business:

1. It helps you do business more efficiently in the here and now.
2. It makes your business more desirable, sellable and valuable when it comes time to cash out.

It helps you do business more efficiently in the hear and now.
How? It allows you and your team to find information on contacts, like phone numbers, email addresses and web site addresses. It allows you to record conversations, quotes and transactions. And, it allows you to review all these after the fact.

It makes your business more desirable, sellable and valuable when it comes time to cash out.
This one is a no-brainer. If you are buying a business, do you want it to come with a Rolodex or even worse - a pile of musty, crumbled, jumbled and un-filed business cards? Or, would you rather have it come with a current, accurate and thorough (and regularly backed up) electronic database of key contacts?

Every time you get a new contact, ask:

• Could this be a potential customer?
• Could this be a potential source of referrals?
• Could this be a potential supplier?
• Could this be a potential key contact of any kind?

If the answer to any of these questions is "yes", by all means capture the contact into your database - including an email address.

Put someone in charge of maintaining and backing up your database, and make sure everyone knows how to access it and use it properly.

Treat your database like the valuable asset it is. You'll be glad you did.

Bill Collier is a St. Louis-based business coach, consultant and speaker. He is the author of the book “How to Succeed as a Small Business Owner … and Still Have a Life.” His website is www.collierbiz.com, and his email is bill@collierbiz.com