We are thrilled to welcome Arvind Sridharan to guest blog here at PIER Marketing.
When it comes to selling your business, business owners often face the same challenges. There is limited control over timing, the due diligence and negotiation process can be disruptive over a long period of time, the amount of businesses for sale is steadily increasing and businesses turn out to be not as valuable as business owners think. A targeted marketing strategy will help you to prepare for sale, increase the chance of successfully closing a transaction and maximise the value of your business.
Stand out from the crowd.
Due diligence processes when selling your business can take a long time and consume valuable resources that cannot be used elsewhere. In addition, they often do not produce the results you want!
Out of approximately 500,000 small and medium-sized businesses (SMEs) that are put on the market for sale in Australia every year, a significant portion never sell. And some of those that do sell, unfortunately are sold for less than the previous owners initially expected.
The growing number of unsold businesses puts noticeable pressure on business owners and prices. Therefore, if you are aiming to sell your business, but you do not have the right marketing and communication strategy in place, you could run the risk of not selling, or underselling, your business.
That’s why having a well-planned marketing strategy can help you increase the value of your business and when it comes time to sell, it will make sure you stand out from the crowd in more than one way:
Brand positioning – Clear understanding of your offering and market position.
- Focus on core value drivers of your business, growing pool of potential acquirers.
Product and service launch – Pushing existing and introducing new offerings.
- Grow your business and increase the value before you sell it.
Lead generation strategy – Expanding into new target markets and audiences.
- Demonstrate future growth opportunities into new markets.
Issues management – Proactively addressing identified or potential issues.
- Increase value by reducing business risks.
Getting professional support and ticking all these boxes is essential to make your business stand out.
Aligning short and long-term business goals.
No matter which industry your business operates in, how old your business is or if you want to sell or not, every business faces the challenge of aligning short-term and long-term business objectives.
Family owned businesses tend to prioritise long-term thinking, maybe even over generations, as opposed to businesses currently up for sale who are short-term focused. But what if things go another way? What if a business cannot be sold within an expected timeframe because did not pass the due diligence or potential acquirers are dropping out? Focusing on only short-term or long-term business objectives can be a threat to your business because you are losing flexibility. It’s like the trade-off giving a man a fish, which will feed him for the day, versus teaching him how to fish, which will feed him for life.
If you align short and long-term business objectives – e.g. by developing a strategic plan beyond the expected sale date and support it by targeted marketing initiatives, like brand positioning, product launches and lead generation activities – you’re feeding the man fish, while also teaching him how to fish.
Merge your business strategy with your exit strategy.
When buying businesses, an important question of course is ‘what do I get and how much does it cost?’ However, the even more important question any acquirer will raise is future-orientated, ‘what do I need to do to at least maintain the current success, and what can be done to lift the business to the next level?’ Ultimately, the answer to this question will determine the price an acquirer is willing to pay, as it sets the acquirer’s expected return on investment. So, the better you can explain your business plan and the required marketing actions to achieve major business goals, the better your position will be during the sale negotiation.
A comprehensive post-acquisition scenario will support you getting the best deal. Develop a business case to the acquirer, showing how his/her investment could be paid back over a short period of time and how the business could be taken to the next level by following a targeted marketing strategy.
Tomorrow you will wish you had started today.
Almost two-thirds of Australian business owners would seriously consider selling their business if approached. However, at the same time, over 50% say they are not ready for a sale. This means business owners would sell their business, despite knowing they are not ready for a sale and, consequently, sell at discounted rates (unrealised value). Or, perhaps even worse, they would not be in the position to sell if someone knocked on their door, no matter the price (unrealised opportunity).
Having a strategic plan for your marketing now and beyond the expected sale date, enables you to improve your business’ positioning to focus on core value drivers of the business and to implement targeted initiatives to achieve your goals. A strategic marketing plan, meaningful brand and tidy online presence will support you in getting the best deal.
If you would like to discuss your marketing activity and strategy for 2020 and beyond, the team at PIER would be delighted to meet with you and offer a complimentary review of your marketing plan. Give the PIER team a shout - (03) 5975 3742 / email@example.com.
If you would like to find out if your business is ready for sale and if you’re set-up to get the best deal, you can contact Arvind via email firstname.lastname@example.org or phone 0419 015 873 for a free check and consultation.
By Arvind Sridharan.