The Importance of Great Branding When Selling a Business
Whether you’re planning retirement or pursuing a different opportunity, preparing to sell your business requires detailed planning.
Up to one-third of mid-size businesses fail to sell. One key factor in successful sales is developing a strong brand. Research shows that 90% of consumers consider brand loyalty before making a purchase. A strong brand makes your business less risky, more attractive, and more valuable to potential buyers.
How Branding Impacts Business Valuation
You may have created your brand when you first opened your business. When it’s time to sell, it’s important to evaluate how your brand has developed over the years. Similar to your business plan, a clear, well-positioned brand adds value to your business from the first day it’s on the market.
Your brand reflects how customers connect with your business. For example, if you’re selling a pet store, your brand may be friendly, playful, and community centric. Your customers are animal lovers who enjoy the experience you provide. Everything from marketing materials to customer service portrays your brand.
Buyers evaluate dozens of business opportunities each year. A business for sale with a strong brand stands out!
Branding goes beyond logos or a tagline. A strong brand drives value. According to the Marketing Accountability Standards Board (MASB), strong branding can account for 20–50% of a company’s total value.
A well-established brand and solid reputation reduce perceived risk for buyers. In mergers and acquisitions, lower risk often translates into a higher valuation. Business value is typically calculated as:
Value = Cash Flow × Multiple
The multiple depends on industry, financial stability, and the perceived risk of owning the business. Strong branding can increase the multiple, giving sellers a tangible financial advantage.
Buyers and brokers often start by reviewing financial performance and online presence. A professional website and consistent messaging show buyers that your business is established, credible, and less risky to acquire.
Presenting a clear, compelling brand makes it easier for buyers to understand your business and feel confident in the purchase. Strong branding not only enhances perception but also directly affects business valuation factors. This combination helps sellers achieve a higher selling price and a smoother transaction.
Measuring the Power of Your Brand
How do you know if your brand is strong? Buyers assess your brand through two lenses: financial valuation and non-financial evaluation.
Financial valuation focuses on cash flow. Buyers typically ask:
Is your business generating revenue?
Is revenue enough to cover overhead?
Is the business reliably profitable?
To answer these questions, sellers should prepare detailed financial records and consider a formal business valuation. Demonstrating a history of strong performance increases buyer confidence and interest in your business for sale.
Non-financial evaluation is the narrative of your business. Buyers want quick answers about your business:
What do you sell?
Who are your customers?
What makes you different?
How does your business make money?
When your brand clearly communicates your mission and values, your business appears strong. Providing this information upfront encourages buyers to move to the next stage of the process. Narrative and numbers that align reinforce confidence. Discrepancies may lead buyers to pass.
Selling a business may involve a Confidential Information Memorandum (CIM). This professional document gives serious buyers an in-depth overview and helps business brokers generate a strong first impression. This document is only shared with qualified buyers under a non-disclosure agreement (NDA).
Branding as a Strategic Tool to Sell
A strong brand knows who you are, who your customers are, and why your business continues to succeed. Investing in branding shows buyers that your business is more stable in the market. Weak branding could signal misalignment with the market, unclear customer value, or difficulty attracting traffic.
Selling your business takes just as much planning as starting your business did. Research estimates that it takes six months to one year to sell your business. Strategic preparation improves your chances of a smooth sale.
If your brand is weak, finances aren’t in order, or operations are inconsistent, buyers may see your business as a poor investment. Going to market unprepared can reduce interest and hurt future sales opportunities.
Preparing Your Brand Before You Sell
Before listing a business for sale, invest time in refining your brand:
Update your website and marketing materials.
Clarify your messaging and customer value proposition.
Ensure your brand works independently from you as the owner.
Many business owners underestimate how much their presence contributes to success. If your brand relies heavily on your name or image, consider rebranding to ensure the business can maintain value under new ownership.
Business Brokers of Arizona: Helping You Position Your Sale
At Business Brokers of Arizona, we know how branding affects sale outcomes. Our team helps sellers strengthen their positioning before going to market in Scottsdale, Phoenix, Tempe, or Chandler.
Don’t take chances when it comes to selling your business. Contact Business Brokers of Arizona. We’ll guide you every step of the way and secure the best offer possible.
