Investors attribute an average of 40% of their investment decisions to non-financial measures when looking to buy a company.Brand strength is fourth in this list, and considered more important than customer satisfaction, staff retention and market share. Here, ORB's Lauren Bansal, explains how your brand can help you build exit value...
We work with a variety of mid-growth businesses here at ORB, and most of the owners we speak to have aspirations to eventually exit the business and move onto the next entrepreneurial challenge (or just retire young and sail around the Bahamas on a diet of wine, lobster and sunshine).
However, if you are looking to eventually sell your business and get the best ROI, you have to signal confidence to potential investors and demonstrate future growth and potential. Here’s how your brand can help:
- Your brand gives you the story to sell to investors
A strong brand doesn’t just give your sales and marketing teams an unfair competitive advantage. It gives you the story to attract investors and helps them to understand the history of your business. Having a consistent brand story signals confidence and provides a rich insight into the business strategy and management’s view of the business future.
- It signals future sustainable growth
Brand strength continues to be viewed as a leading indicator of future financial performance. While there is no doubt that investors will look at numbers, non-financial measures are important too. 59% of investors consider brand strength and market position in the top five most important non-financial considerations. Further to this, intangible assets account for 80% of Fortune 500 companies overall market valuation and brand is seen as the key driver behind this intangible value.
- Brand-led companies have higher employee engagement and staff retention rates are higher.
The strongest brands reflect the culture of the company. An engaged and unified workforce is typically 21% more productive and 22% more profitable, which clearly indicates consistent future growth. Further to this, if employees truly believe in the brand they are much more likely to not leave and continue to support and grow the business once it’s been bought.
With all this in mind, defining your brand and market positioning before you exit is absolutely essential to getting maximum return.
To chat further about how you can increase the strength of your company brand with a view to exit or attract investment, feel free to give us a call on +44333 240 9090 or message us and we’ll get right back to you.