Principio Marketing

BOOK A CONSULTATION

 

SUBSCRIBE TO
OUR NEWSLETTER

(514) 849-2887


MY ARTICLES

HOW TO MAXIMIZE THE VALUE OF YOUR SOLE PROPRIETORSHIP BUSINESS - MARKETING CONSIDERATIONS

I recently had a meeting with a potential client who is planning to retire in the next few years and wants to maximize his return on the possible sale of his sole proprietorship business. It made ​​me think about a common concern among business owners: what steps can be taken to maximize the value of their business? 
  
Some would say that the sale of a sole proprietorship business may not yield the desired rate of return due to the fact that the company's contracts - which are closely linked to the skills and capabilities of the owner - may not be easily transferable. 
  
That said, several steps can be taken to maximize the value of the company and increase the chances of interesting a potential buyer. 
  
First and foremost, one of the most important items after sales and profits in your balance sheet is certainly goodwill. For a sole proprietorship, what does goodwill represent? Essentially, we are talking about client lists and visits to website, blog and social media platforms. Indeed, the more your communication channels with your customers are well developed, the more you will be able to claim compensation for this aspect of your business. For example, Facebook, Instagram and Twitter, which were launched in whole or in parton the stock market or sold to other companies, were able to get huge amounts of money for companies that didn’t  generate profits. Why? Because they have client lists and a great way to communicate with them. 
  
To maximize the value of your company's goodwill, here are the things it must have: 
- A website; 
- Updated content on the website; 
- A blog or news section; 
- Current and market-focused articles; 
- A clear and precise description of the products and services your company offers; 
- Successful integration of your business model in website usability to ensure consistency; 
- A computerized, up-to-date customer list, and well-proven email marketing strategy that has passed the test of time; 
- A relatively large amount of quality names on the list (that have made a recent purchase); 
- A neutral corporate identity (a corporate identity that can be transferred). 
  
Let’s go deeper into the last point. In the introductory period of a sole proprietorship, the identity of the company is almost always the same as that of the owner; for your clients, there is almost no difference. In fact, the only difference occurs at the legal level (you are incorporated or registered or work under your own name). 
  
However, as your business grows, it is wise to take advantage of the owner's reputation to foster a corporate identity that could be transferred to a third party without any impact to your customers. For example, at the beginning of your business, your company can certainly be called: Stéphane Elmaleh Riel Marketing Consultation. However, when your customer base has expanded and you have achieved a good position in your industry, it is wise to name your company something more neutral, for example: Group Principio. Stéphane Elmaleh Riel Marketing Consultation might be more difficult to transfer than Groupe Principio inc. It is a good idea to build your corporate identity soon enough that it becomes a strong asset when it is time to sell your business. 
  
Remember, a good transition strategy is another great way to put your customers at ease with the new face of your company. 
  
Finally, there are other actions to be taken which may also increase the chances of getting a good price for the sale of your business, but here we are concentrating on the marketing aspect, because it’s our specialty. 
  
If you have any questions or comments on this article, please send them to me. In the meantime, I wish you a very pleasant day.

Stéphane Elmaleh-Riel, B.Ed.,MBA
Marketing consultant