So, you’ve made the hard decision that it’s the right time to sell your business. Where do you start? There are a plethora of things to think about and, after raising the business from the ground up, one of your main concerns will be to find a buyer/investor who appreciates it and who will continue to look after it as you have for the past however many years.
With a to-do list as long as your arm, prioritising the various tasks that need completing can be a challenge. For a successful exit, one thing that shouldn’t be overlooked is the marketing function. If you have a healthy marketing function, chances are you have a healthy sales pipeline, which is going to be a big area of focus for potential buyers and investors.
They will want to know that your business will continue to thrive even after you have sold up and exited. If you can demonstrate that your cashflow is continuously increasing with a marketing function that’s driving sales with new and existing clients, you’ve already overcome one of the hurdles.
Potential buyers will also be reluctant if they see a concentrated client base and generally won’t go near a business if a single client accounts for more than 10% of total sales. Marketing can help to diversify your client base by identifying new products or services that could be offered to new and existing clients, protecting you from a huge loss of revenues if that one big client walks away.
Economists talk at length about innovation and differentiation, and rightly so. When your business is being valued, it will often be benchmarked against others in the same industry to determine the multiple. This is where you want to make sure you’re the Lindt in the market – not the Cadburys.
Potential buyers and investors will look at your market share and influence, your profitability and your brand positioning. If they’re all in order and you have a competitive edge that shows you’re different from the other players out there, it’s likely your business will be valued with a higher multiple, meaning a bigger consideration further down the line.
As the saying goes, first impressions last. The first things many of us do when looking at a business is visit its website and have a nosey at the social media platforms. From there we make up our minds. Potential buyers and investors are no different. Make sure your shop window is in order: have relevant, up-to-date content on your website and social media platforms, make sure branding is consistent and eye-catching – if you and your marketing team like the look of it, others will too.
Another thing that can increase your chances of attracting the right buyer or investor will be your PR. As well as looking at your figurative shop window, interested parties will want to know what’s been going on in your business and why it’s different from your competitors: if you’ve won an award, make sure you do a press release. If you’ve made a raft of promotions, make sure you do a press release. If you’ve recently introduced a new product or service…make sure you do a press release!
This enables you to showcase your competitive edge and raises your profile, which will have a positive knock-on effect on how your business is perceived in the market place. We recognise this which is why we have recently introduced the HURST Marketing Services. Working with trusted partners, we can help shape a marketing strategy tailored to your business which will generate results and add value to your business, whether this be in a general context or prior to exit.
All in all, selling your business is likely to be one of the most important journeys of your life, so you need to be prepared. As overused as this saying is, it’s true: It’s never too early to start planning your exit strategy.
To find out how we can help you refine your marketing strategy to add value prior to sale, feel free to contact us by clicking here or by calling 0161 429 2520