27 Jan Taking the Exit Turn
Increasing your company’s valuation through strategic marketing.
There is no denying it has been a tough number of years in Alberta. From the fall in the price of oil to the COVID-19 pandemic, Alberta has experienced one of the roughest stretches in its history. And while there are some market indicators that give us reason for cautious optimism heading further into 2021, business owners are taking a long, hard look at the future of their businesses.
For some, the time is now to achieve value from years of hard work. 2021 could be the year to look at positioning the business for its next phase of growth and building off the legacy started by its founder. As we look forward with cautious anticipation to a return to normal in a prosperous Alberta market, we are faced with a reality that it is likely to look different than what we are used to. So, for those considering an exit, how can marketing help to maximize the value of your company?
1. To put it simply, reputation is everything. When it comes to establishing a value for your business, your reputation, or your brand, is significant. A strong brand is more than just a logo; it is how your company fully presents itself to the market. From your identity, to your story, to your team culture, to your service delivery; all these are critical touchpoints, and functions of marketing. Companies like Husky Energy and MEC attracted a higher degree of appetite from buyers because they are well-known, desired, and trusted brands. Everyone wants a piece of a winner.
The same thing applies in the B2B space. Actively marketing your business to ensure your expertise is well-known helps to attract investors. Building a brand strategy that properly positions your business in the market speaks volumes about your understanding of the market, your value, and alignment of your organizational resources. It is an indicator that processes, and business practices are in place, which helps to maximize the value of a transaction and instill the confidence of investors.Ultimately, the winning scenario when looking to sell is one that involves multiple bidders. The same can be said about selling a home: the more bids you consider, the more value you obtain from your property. To maximize the value of your business, you need to consistently go to market with a strong value proposition, so people take notice. Employing a brand strategy that builds your reputation, increases your reach into the market, and drives up your brand equity, is essential to attracting those multiple bids.
This leads us to the second point …
2. Strategic marketing and business development plans are important assets as they provide essential insight into your company’s future business earnings projections. Having a battle-tested plan with a deep understanding of the tools and tactics that increase your corporate profile and profit margins can help potential buyers and investors gain confidence in your business and drive up the value of the transaction.
3. If you are a business where your founder is looking to exit, one of the greatest value-enhancers is to make them redundant. If you can minimize “key-person risk” by removing the top chair, and the business doesn’t suffer, buyers and investors will find greater comfort in its long-term viability. To build the right team for succession, this might include a strong HR and recruitment marketing strategy to ensure you are hiring the right people in those key roles for the short and long term.
4. High-performing staff and strong company culture can add value to the sale, albeit not directly. Like most companies, we usually believe we have the best staff and are an employer of choice, but there isn’t a simple means of evaluating those things. Investment in ongoing professional development and training is a time-tested way of creating an engaged and high-performing team. A key value-add is to plan and document ways to preserve and enhance your culture, therefore enabling a buyer to capture some of that value. Deliberate internal engagement and communications efforts play a key role in fostering that culture, especially during a time of transition.
When preparing for sale, take every opportunity to realize the full value of both your tangible and intangible assets. Your company and your staff will benefit, and your pocketbook will thank you.