It’s an entrepreneurial dream to start a company, build it and then eventually sell it for a life-changing amount. So what exactly on the front-end of a business builds real, observable value into your business when you’re ready to sell it?
I’ve been fortunate to be privy to many business transactions and from a lot of different circumstances. Outside of the realm of profit and loss statements and balance sheets, you hear many common things when it comes to questioning the marketing and business development sections of the company under consideration.
When most buyers are looking at a company they want to acquire, they obviously don’t just care about the “numbers”, they want to see the management setup, production capabilities, growth (or lack of) and to the point of this article, what you’re doing advertising/marketing/business development-wise in order to achieve this growth.
So, out of those various marketing and business development forms you’re using, which ones will actually add value, or at least perceived value, to a potential buyer?
The short answer? Anything that’s considered you “own”.
What do we mean by “own”? We mean things that we will not lose control of by turning it on or off, or switching service companies.
With that as our premise, you could instantly filter out various marketing and business development things, right away.
That’s not to say that you don’t want to do anything you don’t own, you do.
I’d personally do every form of marketing that I could afford to get an ROI. Lead-generation is a great example. It’s valuable. I know a lot of people who don’t like it, for some it’s a necessary evil. You pay somebody $200-$300 for a lead and you get the job. It’s great. However, how do you think the conversation is going to go with the potential buyer of your business when you tell him that the front-end of your company relies on “buying leads” from an outside company? Probably not incredibly. See? You see the difference here? It’s simply the perception of what is owned or not.
That’s how I’d build the perceived (and real) value. As I said above, I’d do anything that gets me a job and I’d keep adding to it and adding to it until I have a multi-million dollar affair. But, when I’d want to build the value of my business, I’d be telling them the various programs that I own and don’t lose control of no matter who I used as an employee or vendor to manage it, such as:
– My website
– Company Branding
– Store locations (street traffic, visibility?)
– PPC (Pay-Per-Click) Campaigns
– SEO (Search Engine Optimization)
– Social Media Marketing Campaigns
There’s new trends out there where you “rent websites”, for this premise of this article is a terrible idea, no matter how cheap it is. If someone is managing your Social Media or water damage SEO, make sure that you own it and you don’t lose it if they sever your service contract.
You can play with the concept for here, and you’d be smart to do so. It’s sort of like the phrase from the gold-investing world. They say, “ If you don’t hold it, you don’t own it.”
You could say a similar thing with your marketing/business development, “If you don’t own it, it’s not valuable to your company’s price.”
Remember this concept well otherwise your company could be a scary proposition for your buyer.