Our Corporate Finance Partner, Steve Plaskitt, shares his advice on marketing and brand awareness in a disposal strategy…
I attended Tait Walker’s Directors’ Breakfast last week. I was pleased to enjoy a bacon butty and Danish pastries, and to hear Gill Gilthorpe and Jean-Pierre van Zyl from Square One Law present. They talked about the need for a clear marketing message for the external brand and getting all employees and new recruits to support your vision. The main idea I took from it, and I also heard a few pennies drop around the room, was that close alignment of marketing and team culture will naturally help drive a successful business.
The idea resonated with me for when we seek to sell a business. When we have 2-3 years to plan a sale with a business owner, we need the marketing strategy to drive value in the business and also drive awareness of the business with potential buyers.
Firstly, a disposal strategy must meet the needs of the business owners personal goals and responsibilities as a director and shareholder. It must also consider the perspectives of the company, its corporate structure and tax perspectives. You should also review a number of exit options. For example, you would explore different scenarios around selling the whole company or the sum of its parts to separate buyers, or to sell to a management buy out (MBO) team. Internal engagement is key.
However, driving value comes internally as well as externally.
Driving value internally
Internally, a financial and commercial review will identify key strengths within the business that can be developed as value drivers and issues to address in the exit process. Building a strong and rounded management team is essential. Time is often required to allow them to develop and enhance the likely value on exit.
Management will be strengthened by making the right decisions and by using the right data in their decision making. An operational business plan and forecasts with a deep level of analysis of results, KPIs, customers and forecasts provide great management information. This can then be used to evidence both systems and management when a buyer is assessing the business.
All of the above drive value internally.
Driving value externally
How do you drive value by improving external perceptions?
Raising brand awareness and positive press surrounding the business as it heads into a transaction is a great way to improve value externally. Usually, such press and social media content is aimed at customers, suppliers and potential employers, but it can also be aimed at potential buyers and makes them aware of you before they seek to buy the company.
For example, one of the first things a potential acquirer will do is Google the company name. It is therefore useful to have current stories of growth, recruitment, success or other stories of interest in search engine results as well as on the website and in social media.
The importance of an early and coordinated marketing and brand awareness strategy in the pre-deal planning stage to drive value on an eventual exit should not be understated – a bit like the qualities of a substantial breakfast.
If you would like to discuss this in more detail, please contact Steve Plaskitt.