When business owners think about building, growing, and selling – and particularly when it comes to maximizing their returns on selling – they often think about revenues, profits, and operations. But there is one key asset that is frequently ignored – their brand. A strong brand can play a major role in helping a business owner maximize their profits and revenues and even help them exit successfully at the right time.
A strong brand consists of much more than just the visual elements such as the logo and colors. It is the perception in the minds of the customers as well as the accumulated experience and level of trust they have with the product or service that you sell. This, in my experience, could be the most valuable intangible asset a business owner can possess for growth, building operations and ultimately exiting.
Your Brand Is More Than Your Logo
Every company has a brand, whether it was purposefully created or not.
Your brand is what your customers and employees think about your company. It is the perception of your business. Your brand is who you are as a company, what you stand for, and what you offer your customers.
Your brand includes:
- Your company name and logo
- The reputation you have built
- Reviews and word of mouth about your company
- The experience that a customer has when dealing with your company
- Your company culture and values
- The message you give your customers
All of these things together create either an asset or a liability for your company.
Why Is Brand Strength Important to Business Value?
A company with a strong brand is often worth more because buyers see less risk and more opportunity. A recognizable brand that is seen as trustworthy allows a company to generate profits even after the sale.
Whether your goal is to grow, attract investors, or prepare for a future sale, investing in your brand can produce long-term returns.
Below are some of the reasons why a strong brand supports higher valuations. A company with a strong brand:
1. Instills Credibility Prior to the First Conversation
Modern buyers conduct extensive research on companies prior to engaging in any communication. Having a website that reflects your brand, a strong social media presence and online reviews, as well as other credibility builders, enable the buyer to establish a degree of trust even before the first conversation.
Such a position lowers the bargaining power of the buyer and often facilitates value-based pricing.
2. Has Value Beyond the Founder
Most small businesses are built around the founder’s network and reputation.
Although that may be sufficient during the growth phase, such a positioning can significantly limit exit options and negatively affect the price realization upon sale. This occurs because most buyers seek stability and predictability, which is complicated by the prospect of a new owner.
A strong company brand reduces such risks and, therefore, facilitates the transition.
3. Facilitates Differentiation
At the most basic level, a strong brand answers the question of why a buyer should choose one option over another. When differentiation is obvious, it becomes much easier to drive consistent sales. In other words, the company can realize more value by securing loyal customers who will continue to purchase company products or services over time.
This is in comparison to a generic option that only appeals to price-sensitive customers.
4. Encourages Repeat Sales
Customers are more likely to return and buy more when they are familiar with and trust the brand. In turn, this provides a steady cash flow that is appealing to all buyers. Additionally, repeat sales typically indicate that a customer has become a brand advocate, meaning that they are also likely to refer others to the business.
5. Suggests Stability and Predictability
When building or buying a business, it is essential to think of long-term outcomes. A strong brand enables you to establish credibility and attract more customers. In turn, it becomes much easier to grow revenues and enhance profitability.
Furthermore, such an option is viewed more favorably by lenders, investors, partners, acquirers, and other stakeholders. In other words, a strong brand is almost always valuable in negotiations with any business partner.
6. Is a Transferable Asset
Unlike personal networks and other founder-specific assets, a strong brand is a portable asset. In other words, it can be leveraged to facilitate the transition of a business by building credibility with new stakeholders. Moreover, the brand building efforts typically contribute to higher valuations during an exit.
Is Your Brand Helping or Hurting Your Business?
Ask yourself these questions:
- Do people describe your business in the ways you’d like them to?
- Is your message the same across your website, social media, and marketing materials?
- Does it convey the kind of quality your company provides, and would it help attract new clients?
- Can someone look at your website or any other media and understand what you do right away?
If you answered no to most of these, your brand may actually be doing more harm than good.
How to Build a Stronger Brand
Building a stronger brand doesn’t mean you have to completely rebrand. Small changes can have massive effects if you know where to look.
Focus on:
- Making sure your company’s mission and value proposition is clear
- Maintaining consistent messaging across every platform
- Delivering exceptional customer experiences
- Asking satisfied customers to leave online reviews
- Sharing helpful educational content that demonstrates expertise
- Ensuring your visual identity reflects the professionalism of your business
A strong brand takes time and consistency, rather than any one marketing campaign or tactic.
Brand Strength and Exit Planning
When preparing for growth or an eventual transition, look beyond the numbers.
A valuable business is a business buyers believe will thrive long after they’ve bought it. A recognizable brand, loyal following, enhanced reputation and consistently delightful customer experience create confidence in the value of the company being sold, reducing risk for buyers.
Improving your brand today not only helps you generate more business now, but it can significantly increase the value of your company when it’s time to transition.
Your Brand Is a Business Asset
Your brand is one of the few business assets that touches every part of your company—from marketing and sales to customer retention and business valuation.
Whether you plan to sell your business in two years or twenty, strengthening your brand is an investment that pays dividends throughout the life of your business.
The stronger your brand, the stronger your business, and ultimately, the more valuable it becomes.
Debra Murphy is a marketing coach and consultant helping small businesses navigate the complex maze of online marketing. Experienced across all traditional marketing channels, Debra specializes in organic search and content marketing to help small businesses gain visibility and generate inbound leads. She is also a certified coach in the 90 Day Year® Peak Performance System. Debra regularly writes about small business marketing on her Masterful Marketing blog.
