As a business owner, you’ve likely spent countless hours pouring over business plans, meeting with stakeholders, refining your service offerings and troubleshooting challenges.
You’ve probably also spent time considering your exit strategy: many business owners dream of one day handing over the reins and watching as the business they’ve built continues to flourish.
If a sale is on the horizon for your business – whether that’s in one year, three years, ten more more – it’s critical to recognize the role that your company’s brand equity plays in this exit strategy.
The magic of brand equity (and why you might be the thorn in its side)
Your brand is not a mere ornamentation of your business. It’s an essential asset that adds significant value to your company and forms a crucial part of any business owner’s exit strategy.
But what exactly does brand equity mean?
Brand equity is the value premium that a company generates from a product with a recognizable name when compared to a generic equivalent.
In the realm of business valuation, strong brand equity translates into higher market share, increased customer loyalty and the ability to charge premium prices – all of which positively impact your company’s sale price.
Unfortunately, the task of selling a business can become more complicated when the owner is still the figurehead of the brand. Prospective buyers might be wary of a business whose brand value is too closely tied to a specific individual, as it could raise concerns about the brand’s sustainability post-sale.
The solution? Transition your brand from one led by your personal image to one driven by the company’s brand.
Cutting the umbilical cord between owner and organisation
it’s possible to separate the owner / founder’s brand from the company brand. Several brands, both international and Australian, have successfully transitioned from relying on the founder’s personal brand to a company brand:
Apple Inc
Although Steve Jobs was a major figurehead, the brand’s success has continued even after his passing. The brand is now associated with innovative technology and premium products, rather than just its founder.
Atlassian
This Australian software company was built around the personal brands of its founders, Scott Farquhar and Mike Cannon-Brookes. Today, through product development and consistent branding, Atlassian has become a recognized company brand globally.
Virgin
Virgin Group, despite the massive personal brand of its founder Richard Branson, has transitioned into a global brand. Virgin’s brand equity is now tied to its customer-centric approach and commitment to innovation rather than just its charismatic founder.
So where do you start?
For companies aiming to build brand equity without leaning too heavily on the owner’s personal brand, here’s a good place to start:
Share the load of Thought Leadership
Research underscores the importance of thought leadership to a company’s success. According to the 2020 Edelman-LinkedIn B2B Thought Leadership Impact Study, 89% of business decision-makers said that thought leadership can be effective in enhancing their perception of an organisation. Moreover, 49% of decision-makers reported that thought leadership had directly led them to award business to a company.
So we know that thought leadership is a powerful way to build brand credibility and visibility, especially for service brands. But as you turn your sights towards your exit strategy, it pays to ensure that thought leadership represents the company brand as well as the individual. This might involve publishing thought leadership content under the company’s name or using multiple company spokespeople.
Embedding thought leadership in the business can increase the company’s appeal to potential buyers by demonstrating that its success and reputation are not overly dependent on just one individual. It also builds the sustainability of the brand as it can continue to position itself as a thought leader even after a change in leadership.
Steps to ensure that thought leadership is tied to the business
1. Publish thought leadership content under the company’s name: While it’s not uncommon for individuals within the company to be credited as authors, ensure that the content is published under the company’s name. This can include blogs, whitepapers, research reports, and webinars that delve into industry trends, challenges, and solutions.
2. Use multiple spokespeople: Utilise the expertise of team members, not just the top executives. Having multiple spokespeople can showcase the breadth of your team’s knowledge and expertise, and demonstrate that the company’s thought leadership isn’t confined to one individual.
3. Host events: Hosting industry events, webinars, or roundtables can also bolster your company’s thought leadership at a corporate, rather than individual level. Invite industry experts to participate, ensuring that your brand is associated with leading voices in your field.
4. Participate in industry forums: Be present and active in industry forums and discussions. Make valuable contributions that highlight your company’s insights and viewpoints.
5. Leverage social media: Use your company’s social media channels to share your thought leadership content – and encourage your teams to share, too.
By taking deliberate steps to ensure that thought leadership is tied to the business, not just the owner, you can bolster your brand’s credibility and attractiveness, laying the groundwork for a successful transition and continued success under new leadership.
Weave the Founder’s Vision and Values into the company brand
According to a study by Motista (a company which helps brands understand the human motivations that drive customer behaviour) customers who have an emotional connection to a brand have a 306% higher lifetime value. And your vision and values are two of the most powerful connection-building tools in your brand armoury.
The company’s vision and values play a crucial role in shaping its culture, decision-making process, and overall direction. While these elements will naturally be reflective of the founder’s ideals, it’s essential that they are framed in a way that resonates with the wider company. This can create a sense of unity, shared purpose, and ownership that extends beyond the founder.
Steps to articulate your company’s vision and values effectively
1. Define your vision: The company’s vision statement will clearly and concisely express the company’s long-term goals and purpose. As a founder, think about what your ultimate aim for the company is. What change do you want to bring about through your company? What will success look like five or ten years down the line?
2. Establish your core values: Your core values are the guiding principles that dictate how the company operates and makes decisions. They reflect your beliefs and what you consider important. For example, if you value innovation, make this one of your core values.
3. Communicate regularly: Regularly communicate your vision and values to your team. This can be done through team meetings, internal communications, and by overtly referring to them in company actions and decisions.
4. Embed them into your people and culture operations: Your vision and values need to be woven into the fabric of your company’s operations. This includes recruitment (hiring people who align with your values), professional development (encouraging behaviours that reflect your values), and recognition (recognizing and rewarding behaviour which reflect your values).
A clear, resonant vision and strong, shared values can unify your team (according to this fascinating research by Bain & Company, employees that connect with a company’s vision and values are 3.5 times as likely to solve problems themselves and invest personal time in innovation), guide your company’s actions and improve performance, making your business more attractive to potential buyers.
Articulating the founder’s vision and values is not just about expressing personal beliefs; it’s about creating a shared sense of purpose and guiding principles that can drive your company towards its goals and ensure its sustainability well into the future.
By effectively weaving your vision and values into the company’s fabric, you create a strong, vibrant culture that not only aligns your team but also makes your company more attractive to potential buyers. It demonstrates that the company’s success is driven by a shared purpose and core principles that will endure beyond the founder’s tenure.
Transitioning from a personal brand to a company brand is an essential part of every business owner’s exit strategy. It’s a process that requires thought, planning and time but it’s an investment that can significantly increase your company’s valuation and facilitate a smoother transition when it’s time to sell.
As you lead your business, remember that your ultimate goal is to create a brand that can thrive – even when you’re no longer at the helm.