GUIDE

I have a strong brand – how do you take that into account in my valuation?

In most cases, and especially so for consumer facing business, the company is sold together with its brand as it is an innate part of the company’s ability to generate cash flows.

Even though you could theoretically establish a separate value for the brand, it is not practically possible to extract that value without fundamentally devaluing the company that relies on the brand for its ongoing business. 

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We go to great lengths to explain to investors the strength of your brand, thus maximising the value of the business as a whole.

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So even though we typically do not value the brand separately, we are experts at, and go to great lengths to explain to investors the strength of your brand, thus maximizing the value of the business as a whole.

Get in touch with one of our advisers to discuss both how to position your company and brand to improve your operations and how to maximize your value if you are contemplating a transaction.

However, a strong brand can certainly improve the valuation of business.

For a consumer business, brand strength positively influences customer facing activities such as the company’s ability to attract customers, which lowers the customer acquisition cost (CAC), and its pricing power in the market. Brand strength therefore has a positive impact on the future earnings potential of the business, which is something investors are willing to pay a premium for.

To extract that investor premium, we as advisors help our clients produce and attractively present key data points that investors look at when evaluating brand strength. These datapoints include items such as Net Promoter Score (NPS), social media engagement rates, and customer reviews.

For business owners, it is a good idea to track metrics related to brand strength as part of its ongoing business.  

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Knowledge

We don't hide behind jargon and complexity. Instead, we aim to open up the black box of M&A, illuminating the path with clear insight, simplifying the process, and delivering valuable information.