Selling your company? Good branding can increase your valuation.

For many entrepreneurs, their business is their baby. It gives them lifelong purpose, meaning and emotional sustenance (as well as more than a few sleepless nights).

Others, though, dream of building a successful enterprise, then cashing out to an eager buyer.

If you fit into the latter camp, it’s time to look at the return on investment in your brand.

In our agency experience, most startups put their branding on the back burner, and understandably so. Owners are busy dealing with sales, hiring, contracts, partnerships, distribution, administration—basically, running the business.

But what’s often overlooked is Forbes’s research showing that your brand can add 10–20% to your corporate value (B2B businesses are usually at the lower end, whereas consumer brands are more often at the higher end).

So, if your company’s value is $1M, then a good brand would account for $100,000–200,000 of this value.

Branding becomes even more relevant when your revenue isn’t based on tangible assets—putting a value on intangibles such as services, processes and intellectual property involves much more of a risk-benefit analysis for the buyer. Scale up the value that you can show, and the payback from investing in your brand starts to add up nicely.

How do you brand to sell?

First and foremost, remember that a private equity buyer is looking at hundreds, if not thousands, of potential sales each year. If you’re getting acquired by another company, they’re still likely looking at multiple options.

You need to stand out against your competitors, because buyers will review your peers (even if they aren’t for sale) to see where you fit in your industry. If you show a clear advantage, your value will increase. Having a great product or service is just the first part. Read on to see how a good brand can do the rest.

Deliver a great first impression

Do you look credible, sophisticated, personable, fun, premium, affordable or in any other way more interesting than your competitors? Are you telling a great story that jives with your numbers?

Do you say plainly, clearly and consistently what you offer and to whom? Are your customers loyal and happy? Are referrals and reviews strong? What makes you different—truly different—from your competitors?

Never forget that, while a buyer for your company will of course review the books first, there is also an intangible, emotional component to every sale. You’ll need to grab the buyer’s attention quickly (and positively). This is especially true if a buyer is weighing several options that are similar. Don’t rely on a logo that was drawn on a napkin five years ago and was “good enough” when you started the business. Your brand needs a unified, strategic approach to its look and feel, communications and audience experience.

Think of it like selling a house: a property that shows pride of ownership will always fetch a higher price than a fixer-upper that’s the same size in the same neighbourhood. If you sell as a fixer-upper, and the cost of rebranding is less than 10% of the value of your business (and it nearly always will be), you’re leaving money on the table.

Actively measure the value of your brand

Do you avoid chasing trends, instead marketing your company efficiently and consistently, with clear metrics showing the return on your spend? Do you have a handle on other metrics, like sales performance (in-person and online)? Is your SEO strong? Is your employee turnover low for your industry? Are your vendors happy? Do they offer you better terms than they offer your competitors?

The more measurements you show, the more compelling your company will become, especially if yours is being compared to a company that doesn’t track its performance as thoroughly. You’ll show that you’re thinking ahead, and that you’ve invested time and effort into understanding your business, your customers and your marketplace.

Want to make it even more formal? The International Organization for Standardization offers a methodology for evaluating brands (known as ISO 20671) to assess your brand’s monetary value via a global standard framework.

Ensure your employees bring your brand values to life

Do you know whether your business would thrive if you left it tomorrow? Do your employees know what the brand is about and their role in it? Do they see your workplace as a team that engages and challenges them, or merely as a job? Have you codified your processes so a new hire can fit in seamlessly?

A buyer will look at the owner’s or owners’ influence on the success of the business. A strong brand that isn’t synonymous with the owner will ensure that the business will succeed after it changes hands, no matter who’s running the show.

If your company has that magic combination of strong sales, loyal customers and employees, and clear, sophisticated, measurable and scalable brand equity, you have a winning formula that will get you the best price in any negotiation.

And everyone wants to buy a winner.

Ready to create a winning brand?

The best place to start is to find a great branding agency. And make sure they follow a clear, strategic process, like the one outlined in this article from our agency’s creative director.