For many entrepreneurs, the goal of building a business is to sell it. This isn’t true of everyone, but it’s usually on the radar for the majority of company founders. Those nearing retirement age and don’t have kids who want to take over their business are especially interested in the ‘exit strategy’ that will enable them to pursue their hobbies full-time and financially care-free.
But business owners face a woeful reality – not all of them will be able to sell their businesses.
Many companies don’t have the management team in place, or haven’t made the technology investments to ensure they’re sustainable long into the future. And one of the most common reasons that small and mid-sized B2B companies can’t get sold for the price they seek is that they are too reliant on the founder for revenue generation.
That last point – revenue generation – is where marketing comes in for B2B companies and can double the value of a small or mid-sized business. As buyers continue to take control of the sales process, and marketing becomes a more important part of the revenue generation engine for B2B companies, it’s increasingly vital for small and mid-sized companies to get aggressive about marketing.
If you’re thinking of selling your B2B company, marketing could be a compelling part of your business value. A high-performing marketing function can double the value of a business based on gross sales, predictable pipeline and the value of the brand. Here’s how marketing makes B2B companies more valuable:
1. Build your brand
A good brand sells itself – this means that by shifting the focus of your marketing away from just your products and towards your brand, the business is building a platform from which to grow. A solid brand makes all products easier to sell, and is a good launching pad for new products. A high value brand makes a company easier to sell because it’s no longer only about the founder of the business – it’s about the company as a whole. Buyers are more willing to pay for a company that has established a solid brand. They don’t have to rebrand or spend more resources trying to get entrenched into buyers’ minds and hearts.
2. Increase Profits
Profits are the primary means by which most B2B companies are valued by prospective buyers. If your business is profitable - and more importantly - predictably profitable, ie you have a good handle on the pipeline, you’ll command a much higher price. A high-performing marketing function will help you build that predictable revenue pipeline, and it will also help you increase your prices so that every sale is more profitable.
3. Raise awareness of your business
A good marketing plan will help you enhance your company’s profile and generate good buzz. It will raise awareness of your company, which can attract the attention of appropriate acquirers. If you run a great business that absolutely no one knows about, your ability to attract multiple buyers (and create a bidding war or sense of urgency for acquiring your business) is limited. Marketing will help you put your comapny on the radar of multiple potential buyers, which is the best way to drive up its ultimate selling price.
Using marketing to increase the value of your B2B company
Using marketing to improve your business’ reputation, brand, and profits is not something that happens overnight. With the right amount of work and attention, you can accomplish it. in our experience, most businesses need 1 - 2 years to build a high-performing marketing function. If you’re thinking about selling in the next few years, now is the time to start putting marketing in place.
Need some help? We’ve helped dozens of B2B companies increase their value through effective marketing.