In this article, Guy Addison (Transaction Advisor) and Bernard Jansen (Marketing Consultant) discuss how and why the branding of a business is so important and explain how a brand strategy differs when business owners decide to sell as opposed to building a business.
Positioning a business brand for sale
It is likely that marketing strategies often confuse the positioning of a brand in the consumers eye from market participants that may be interested in acquiring the business of the brand. Marketing a business for sale and marketing your product are very different!
As an entrepreneur you’ve built a superb brand. Your products and services are well recognised in your chosen market. So why is building a business brand for sale so different?
Here are our top reasons why…
Positioning to a different market.
Business Owners often believe that the people who buy their products and services are also the same people that will one day buy their business. The market for buying your business (or funding it) is often dramatically different from those interacting with it today. Occasionally, the best buyer of your business may be your suppliers (up-stream) or customers (down-stream). However, each market segment requires a different positioning strategy. Marketing the business differs from finding a larger market to sell to.
It’s much more than the product offering.
Traditional marketing strategies talk to product, price, packaging and promotion (the famous 4 p’s). These same building block exist in marketing your business, however there is a very different customer with different needs to be satisfied. Often the things most overlooked in marketing become the most important when selling the business. Things like compliance, risk mitigation, good record keeping, and strong internal processes are all aspects of a business marketing campaign. What this means is that as a business owner wishing to sell, you have a lot more things to worry about when selling your business!
It’s not personal.
Despite company founders being proud of the organisation that they have created, Acquirors may not care as much about the brand name if it doesn’t make sense to their broader strategy. A seasoned acquiror will often look at targets with much less emotion. Hence, being committed to your product / service is necessary but not enough to ensure that you can successfully sell your business. Understanding this process and remaining objective are crucial factors for any Business Owner to understand.
Building a business sale strategy requires careful planning and coordination
Building a marketing strategy requires careful planning and execution. A thorough review of your business brand should form part of the long-term journey of preparing your business for sale. Paying attention to your business brand adds an additional dimension to the typical product-sales focus of most entrepreneurs. It gives your business added credibility as a going concern and helps to solidify its place in the competitive market.
Using professionals
The skills required to successful market a business for sale often don’t co-exist in traditional marketing service providers such as advertising and PR agencies. In addition, whist Business Owners enjoy interacting with potential acquirors, this invariably turns into a distraction from their day to day brand building activities. What’s worse, they can’t successfully steer a transaction to conclusion. This is often the time when outside professionals are approached. In our experience it pays to bring such professionals alongside your business earlier on in the process. This time allows for sufficient strategy and planning and ensuring a better change that objectives and outcomes are aligned with your expectations. It will also reduce the friction so often experienced in transactions of this nature.
In conclusion
If you own a business and want to sell, recognise that selling the brand is vastly different from selling the services attached to that brand. Upskill yourself on how to build a business for sale and team up with the right people who know what is required to build a business for sale. Finally, be patient, successful business sales rarely happen in a rush and most are the result of a lengthy strategy.
About the authors
Guy Addison is a Chartered Accountant focused on serving the needs of business owners in the domains of finance, management and transaction matters. He has over two decades of corporate and private company transaction experience.
Bernard Jansen is an MBA graduate and founder of Firejuice Strategic Marketing consultancy.