The Canadian Federation of Independent Business (CFIB), Canadian banks, accounting firms and think tanks have all pointed out that Canada’s privately held businesses are on the cusp of a great transition in ownership. As the baby boomers move into their 60s and 70s, they are shifting gears and finding new adventures. Many of these business owners are looking for exits from the companies they founded.
But behind the desire to transition their businesses to a next generation is a sad reality. Many of those business owners won’t succeed in selling their companies at all, let alone for the price they hope.
For most business owners, selling their company involves marketing it. They’ll hire a broker, talk with trusted advisors, and put out notice that they’re interested in offers.
But what most company owners—particularly industrial, technical and professional services companies (a component of the business-to-business category) don’t think about is how their company’s own marketing of its products and services, not just the marketing of the business as a whole, can enhance their chances of getting a deal done.
There are three ways that marketing increases the value of a business-to-business (B2B) company, the price that it can be sold for, and the overall chances of a sale:
1. Increase sales
For decades, marketing wasn’t relevant in B2B except for the largest companies. But now even the smallest B2B companies need to devise strategies to ensure they’re known in the marketplace. Twenty years ago, this happened through trade shows. Now, it happens online. B2B companies without effective online marketing lose out on countless opportunities to present their solutions to potential buyers. Those B2B companies who market their products and services effectively get more sales leads and revenues, which in turn results in a higher selling price for the company.
2. Build the brand
One of the big problems for small businesses is that the owner of the business is the business. If the company doesn’t have talented people and competencies beyond the owner, it won’t sell. Building the reputation of the company (not the owner) through B2B marketing tactics—such as thought leadership, public relations and online presence—will help build the company’s brand. The essence of shareholder value (the price you’ll get upon selling) for most small and mid-sized companies is in intangible assets—and the heart of intangible assets is brand.
3. Improve your curb appeal
Just like in residential real estate, company image plays a role in a purchase. There are so many great Canadian B2B companies who do world-class work, but their public appearance on their website, marketing materials and presence at industry events is often a poor representation of all they have to offer. Cleaning up a company’s image can help enhance that immediate appeal to a buyer, not to mention to potential customers.
Marketing a business for sale and improving a business’s marketing both take time—that’s the only drawback. If you’ve decided you want to sell your company, be aware that the process of selling your business can take years. By improving your marketing, you can shorten that time horizon, and secure the price you seek.
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