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How your private or family business can be worth more than you think.
It is not news that your Brand is one of the most valuable assets of your company. When your Brand is correctly built and promoted, it has immense financial value and commands higher prices while keeping customers loyal.
A Brand built early and implemented properly assures shareholders growth in company value that increases over time. This is significant - enough so that the Brand can be sold for the best price when the owner retires or passes the business on.
Do you want your business to create Cash or build Wealth?
Many owners and business leaders need to make this distinction first - a business for cash or wealth. Cash generating businesses don't necessarily need the sophistication of branding, like a corner convenience store. However a business that must build wealth, like a manufacturing company or boutique services firm needs Brand development. Ten years of working with hundreds of private and family business owners has resulted in five powerful questions worth considering if you want to build a business and Brand for wealth:
Do I want to be better equipped for retirement and business succession?
Do I want to be well compensated for the equity and goodwill I have invested in building this business?
How can I build wealth in my business that can be successfully cashed when I want or need it?
Do I want a strategy that enables me to proactively capitalize on creating my Brand for wealth?
Do I want all of my key stakeholders and staff to genuinely champion the Brand goals that will ultimately create wealth?
There are four key components to making Brands work: LEADERSHIP, MESSAGE, OPERATIONS, and BRANDING ARTIFACTS.
Starting with the basics - what is a Brand and what is Branding? What makes a Brand work?
What is a Brand?
Your Brand is not your company name, logo, website, or advertisements. A Brand is what your customers, suppliers, investors, employees, business members and the public think, say, believe and champion about your company. It is your 'corporate reputation'. And because it is reputation, there are things that you can and cannot control.
What is Branding?
Branding is the direct and indirect activities undertaken by a company to imprint and influence a 'desired reputation' upon its audience. These specific activities shape the hearts and minds of a company's targeted and non-targeted audience. A company's LEADERSHIP becomes responsible for the management of these activities to guide and grow the Brand and its value.
A direct Branding activity is one that a company intentionally designs. A company designs and controls its message and how it is delivered. Examples of direct Branding includes developing BRANDING ARTIFACTS such as company name, logo, business philosophy, ad campaigns, website, publicity, events, sponsorships and charity involvement.
An indirect Branding activity is one where a company has little to no control over its message and how it will be delivered, received or shared. It is how an audience experiences a company. Indirect activities range from the company's daily business to handling of crisis issues, and how these OPERATIONS are perceived and received by customers, staff and the marketplace. How it communicates, compensates, relates to employees and customer service and supplier relations all affect this perception. Everything a company does forms and alters the company's Brand. Thus, a Brand is constantly changing.
It is therefore critical to have a consistent, clear and concise MESSAGE. This is an efficient way for a Brand to remain consistent over time, expressed by all staff and implemented in all operations. This message is the Business Philosophy Statement. With a business philosophy, based on the leader's or family's legacy, a company's actions become congruent with its promotions, operations and values.
The wealth-building Brand
Our experience has shown that savvy shareholders need a direct way to build a Brand for wealth. This goes beyond the appeal of slick logos and websites. It goes beyond advertising and marketing campaigns. A wealth-building Brand includes shareholder interests and goals, a framework to value the Brand from an accounting perspective, allows for the succession of its leaders and occasionally, the business. A wealth-building Brand includes a strategy by which products, processes and people can follow and apply the Brand in daily and long-term initiatives.
Businesses that have carefully developed Brands control their destiny. Having an awareness of effective Branding helps business owners understand the value and methods to building a Brand for wealth, determining intangible assets and how to enhance and grow the company's value now and long-term. Ultimately, this is the most important reason for developing an effective Brand - to create lasting wealth for you and your company.
If you are not giving full consideration to some of the elements of Branding presented in this article it may be time to evaluate your current Brand and the assets related to it. Access the Brand Asset Checklist (PDF 550KB), kindly provided by Business by philosophy.
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