As you approach the well-deserved horizon of retirement or a shift in your professional journey, selling your business might be at the forefront of your plans. You’re not alone.
The next 5 to 10 years will see a flood of baby-boomer-owned businesses up for sale. Not all of them will find a buyer. How do you make sure yours does?
If you're going to be part of this flood, understanding the role of branding in this process is crucial. This article delves into how a well-crafted brand identity brings two big benefits.
- It potentially boosts the sale price of your business
- It helps your business stand out in a crowded marketplace
- It allows you to imprint your story and legacy on the business
The impact of brand identity on business valuation
Brand identity is more than just a logo or a clever tagline; it's the outward expression of your business's personality and values. In the context of a sale, it’s the beacon that draws attention to your business's unique story.
Enhancing perceived value
A strong brand identity can significantly enhance the perceived value of your business. Like a well-maintained home in the real estate market, it naturally attracts higher offers. Buyers are often willing to pay a premium for a business that shows up with a clear, compelling brand identity. Rationally, it suggests a loyal customer base and a stable market position. Emotionally, it feels safer.
Signaling continuity and legacy
So much of a founder’s identity can be wrapped up in a business. It becomes part of them. A reimagined brand is an opportunity to weave in the story of the business and the legacy of the founder. This aspect lends depth and continuity to a business, which is attractive to buyers looking for meaningful value, strong narrative, and established trajectory.
Consistency and trust
Consistency in your brand messaging builds trust. When potential buyers see a business whose branding has consistently communicated its core values and delivered on its promises, they see a business that has its act together. And because people sense that how we do anything is how we do everything, this perceived reliability can translate into a higher valuation.
Attracting potential buyers
Your brand identity does more than just add zeros to the offer; it also plays an important role in attracting the right buyers.
Creating emotional connections
Like your customers, your potential buyers are both rational and emotional beings. Only part of a buying decision is based on rational consideration. And that only happens if the initial, emotional reaction (this feels right, this feels safe) opens the door for that careful consideration. The same way a brand must connect emotionally with customers through its story, message, values, and visuals, it must also connect with buyers.
Differentiation in the market
In the coming sea of businesses for sale, a distinct brand identity helps your business stand out. It’s not just about being different; it’s about being distinctive—different and memorable for all the right reasons. Given two equivalent businesses to choose from, the better brand will almost always win.
The right time to refine your brand identity
When planning to sell, there is a right time and a wrong time to make brand identity adjustments.
The ideal window
The best time to start refining your brand identity is usually going to be 3 to 5 years* before you plan to sell. This window allows enough time for the new brand identity to roll out fully, for the market to recognize and respond to it, and for it to impact your business metrics.
And in the meantime, those 3 to 5 years with better branding will make it stronger and more profitable while it’s still yours.
*Your business broker or investment banker will be able to provide guidance specific to your scenario.
Avoid last-minute changes
Abrupt changes to your brand identity just before a sale can be risky. It might raise questions about the authenticity and stability of the business. A buyer may wonder, “Did they do this right, or did they do this quickly to paint over a problem?” Consistency is comfortable, abrupt changes are not. And any changes that must be made late in the process should feel like a natural evolution.
Wrap it up
As you edge closer to selling your business, remember that your brand identity is more than just an aesthetic choice. It’s a strategic asset that can significantly influence your business's sale price and its appeal to potential buyers. A well-timed, carefully considered approach to refining your brand identity can make all the difference, setting your business apart as a valuable, distinctive entity in the marketplace.
Like we said at the beginning, there is a coming flood of businesses for sale in our near. Not all of them will find a buyer. Make sure to give yours the best chance for success.
A few ways we work with clients
Brand assessment
This diagnostic is our lightest engagement and easiest entry point for those who aren’t sure about what’s working or not, and where to start.
Logo & brand design
Our core creative service, brand design is for those who have strong business strategy in place, and a clear, documented understanding of their audience and competitors.
Strategy and design
With big changes to the business—new leadership, markets, and direction—a big change to the brand will follow. We develop brand strategy and positioning, and then move into design.