"I'm thinking of selling my business in the next five years" is something I hear regularly these days. Studies from the Canadian Federation of Independent Business (CFIB), the Canadian chartered banks, accounting firms and think tanks over the last decade have all pointed out that Canada's small business sector is on the cusp of a great transition in ownership. As the baby boomers move into their 60s they want to shift gears, and many hope that they'll be able to cash out of the businesses they've built over their lifetimes.
But behind that 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. Because there are so many businesses potentially on the auction block, buyers will be calling the shots, not the sellers. If you're a business owner who wants to sell, it's time to start thinking about how you are going to do it.
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 business owners—particularly B2B company owners—don't think about is how their company's 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 a B2B company's marketing can increase its value and chances of a sale:
- Increase revenues. For decades, marketing wasn't relevant except for the largest B2B 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's happening 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.
- 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.
- 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.
Lisa Shepherd is author of Market Smart: How to Gain Customers and Increase Profits with B2B Marketing and president of The Mezzanine Group, a business-to-business strategy and marketing company based in Toronto. She was the youngest female CEO of a PROFIT 200 company in 2007 and 2008 and is a frequent public speaker on B2B marketing strategy and execution.
More columns by Lisa Shepherd