Getting a business up and running is a huge challenge. Between managing resources and investments, hiring staff, attending to creditors and developing new sales funnels, it’s a tremendous challenge to try and balance everything.
A common strategy to try and make things easier is to simply avoid certain aspects of the business. Maybe you can outsource some of the work to an outside firm, or perhaps you can just completely skip over doing something.
This becomes especially true when your plan is to sell your business. It’s become common practice these days for people to invest in businesses, work to grow them and then sell them for a profit. To make this work, you want to find the right combination of inputs that will maximize outputs. You don’t want to skimp on anything, but you’re keen to cut some corners if you can.
But you need to know that your marketing strategy is not one of these things you can forget about. Even if your plan is to sell the business, your marketing strategy is crucial. It will not only play a critical role in helping you boost profits, but it will also go a long way towards making sure your business is as valuable as it can be when the moment does finally arrive to sell.
Here are some ways your marketing strategy directly affects the sale of your business to show you how important it is to make sure this does not get left out of your long- and short-term planning.
One of the first things anyone will look at when evaluating your business is its revenues. The general rule of thumb is that your business is worth 2.5 times its yearly revenues. But this is merely a starting point. The value of your business will go up or down depending on a number of factors.
For example, potential investors will look at how likely it is for your company to continue producing these revenue numbers. And to do this, they will look at how you are generating new sales i.e. your lead generating strategy.
Producing new sales leads is one of the most important aspects of marketing. By sending different messages to people through different modes of communication that align with their position in the buying process, you are helping to expose your company to potential customers.
To do this right, you need to have a quality marketing strategy. Here are some examples of how marketing directly leads to new sales leads:
- You run a content marketing campaign to boost your search engine performance. This has allowed your website to rank #1 for keywords that drive 4,000-6,000 people to your site every month. Since your keyword is “best x for y,” you can say these are motivated buyers looking to make a purchase
- You use social media marketing to generate awareness about a certain issue that your company can help solve. With this strategy, you are not necessarily dealing with motivated buyers, but instead, are hoping to draw people in who are interested in the overall objective of your company.
- You offer workshops—both digital and in-person—to industry professionals to position yourself as a resource and encourage them to think of you the next time they decide to engage in professional development.
These are just a few generic examples, but as you can see, everything you do in marketing has one final objective: to bring in more sales. Even though the sole focus of every tactic will not be to sell something to someone, this goal is always present.
And how successful you are at doing this will have a dramatic effect on the value of your business. If you can demonstrate effective, consistent and sustainable lead generation, you’re more likely to receive a high valuation. But if investors are unsure where or how you generate leads, then offers are likely to come in below this 2.5x number used as a starting point.
With such fierce competition in today’s marketplace, companies are constantly looking for ways to stand out from the crowd. Having a strong brand is one of the ways you can do this. And to get to the point where you have a strong, recognizable brand to which people remain loyal, you need an effective marketing strategy.
Having a strong brand makes your business more valuable in two ways:
- It makes your business more profitable
- It is something extra upon which new owners can build
If someone is looking to take over a company, doesn’t it make sense they’d rather buy a company people know, trust and recognize over one they’ve never heard of? Sure, the anonymous one will be cheaper, but it will be much harder to grow the business once the sale is complete. A strong brand is much easier to leverage into better sales numbers, and it’s something investors are willing to pay a premium for when looking to buy a business.
Take some time to outline your brand guidelines, and develop a strategy for communicating it to your audiences. Doing this effectively will help your business now while you still own it, you’ll really see the impact of these efforts when you go to sell the business and receive truly competitive offers.
As we move more and more towards an information-based economy, your ability to deliver quality information people can trust and use is going to become increasingly important. The businesses that will succeed in cutting through all the noise of today’s crowded marketplace are those that are able to establish themselves as a necessary resource for people’s lives.
And this is not something that happens by accident. Instead, it’s the result of a focused, dedicated strategy that has the goal of establishing your company as an authority in its field. It’s important to remember that you don’t necessarily need to be the largest enterprise in your field to be considered an authority. What you need instead is to connect with influencers within the niche and to provide people with information that is genuinely useful to the improvement of their lives.
This is the responsibility of marketing, and it will only happen if you plan for it to happen. Your authority will be represented by how well you do in search engines, the number of links and shares you draw to your content, and you can also conduct research through surveys and focus groups to see how people react to the content you create.
Spending time on this aspect of your marketing strategy will give you yet another bargaining chip that can help you attract better offers when the time comes to sell your business.
Nowadays, the companies that really take off and transform from innovative startups to big league businesses are those that find a way to do something dramatically different, leading to fast growth and user adoption.
The vast majority of this is marketing.
You need to ask yourself: How do I get the word out to my audience as quickly and effectively as possible so that they get on board right away?
To be successful with this, you need to really understand your audience, identify with their pain points and know the best ways to communicate your message to them.
Again, this is all marketing. Your product may be groundbreaking, but unless you are clear about what makes you new and different, and about how you are going to get this message out, your great idea may just be left behind by someone who was willing to dedicate more time and energy to their marketing strategy.
A path forward
Lastly, a good marketing strategy plans for the long term. Campaigns typically take place over several quarters if not more, as it takes some time to see results. But more importantly, for a marketing strategy to be successful, it requires those designing it to put in some time to figure out where to take the company.
Creating and communicating a brand is not something that happens overnight or by accident. You need to think about where you want to be and how you are going to get there. Because of this, your marketing strategy is your way to light up the path for future investors.
Obviously, they will want to do some things on their own, but by thinking through a long-term marketing strategy, you’re helping to demonstrate the opportunities that exist by taking over your business. Using market research and good data will help clearly convey that your business is headed for more success and that it’s, therefore, a good idea to submit an offer over and above the asking price.
Clearly, your marketing strategy is important even if you are planning to sell your business. Actually, if your plan is to sell, then your marketing strategy becomes especially important. It helps you create a long-term plan for your business, and it’s how you build sustainable growth and customer retention into your company.
So, if you’re thinking of turning a blind eye to your marketing strategy because you plan to sell, think again. You’d be missing out on a great opportunity to increase the value of the offers you receive.