The inclusion of websites as a business asset rather than an expense , and the purchase of more hardware and software products, has seen many companies develop a substantial, technology heavy, balance sheet.
However, also being involved in business valuations and business investments, I can absolutely state that in 100% of cases one of the top 5 questions raised from a potential buyer or investor is whether the business is active on social media.
Add to this, in the past 6 months I have seen five business owners receive up to 10% more for their business due to well managed social media accounts. There is no doubt having successful social media accounts within a business is creating added value. This is why.
1. Database Value
There are marketing companies that will pay up to $40,000 for a reliable customer database. And there are companies that have no problem selling their "confidential" database every 12 months. Whilst I do not condone this practise, your social media followers and fans are a direct marketing database who can send your promotional activities viral. This is a valuable commodity.
2. Brand Loyalty
It takes some time for a new business to capture a target market. To have your business recognised as an industry staple is not simple. Unless you have substantial capital to invest in marketing, precious time can be spent attracting and trying to retain loyal customers. Should your social media profile (backed up by reliable reports and statistics) show consistent customer and brand growth, automatically add 5% to the value of your business.
3. Global Exposure
From my own experience with social media, I have clients in my home country of Australia, but I would certainly say over 60% of my contacts are in the USA. Our company receives many requests to consult in the states. I have visited Los Angeles twice in the past 18 months for work. I love, LOVE America, and I adore the fact that my job takes me across the pacific. Would I have been able to achieve this without social media? No. If your business has been able to attract international clients due to social media this is a huge value add for your business.
4. SEO Coverage
The more you tweet, post and blog helpful and interesting news and updates, the more your content will show up on Google. Eventually your brand will be associated with keywords in your industry and your name will dominate. You cannot buy that reputation, but you can develop it via social media.
5. Preparing for Future Generations
My son is 19 ("almost 20 Mum!", I can hear him say). Due to work commitments he lives in another state. We rarely speak but text every day. To him, texting IS speaking. Talk to any other parent with children in this age group, they will possibly have a similar story to mine. They may not talk to their kids, but communicate via Facebook, Twitter or Skype daily. Hey, at least we hear from them at all! Seriously though, this younger generation will be decision making adults and business leaders within 5 to 10 years. They will communicate predominantly online and this includes social media. By owning a business embracing social media, you are clearly demonstrating a dedication to future investment and growth strategy. An attractive trait indeed.
About Business Valuation
Business Valuation comes down to four key areas:
Enjoy this article? Connect with us!However, also being involved in business valuations and business investments, I can absolutely state that in 100% of cases one of the top 5 questions raised from a potential buyer or investor is whether the business is active on social media.
Add to this, in the past 6 months I have seen five business owners receive up to 10% more for their business due to well managed social media accounts. There is no doubt having successful social media accounts within a business is creating added value. This is why.
1. Database Value
There are marketing companies that will pay up to $40,000 for a reliable customer database. And there are companies that have no problem selling their "confidential" database every 12 months. Whilst I do not condone this practise, your social media followers and fans are a direct marketing database who can send your promotional activities viral. This is a valuable commodity.
2. Brand Loyalty
It takes some time for a new business to capture a target market. To have your business recognised as an industry staple is not simple. Unless you have substantial capital to invest in marketing, precious time can be spent attracting and trying to retain loyal customers. Should your social media profile (backed up by reliable reports and statistics) show consistent customer and brand growth, automatically add 5% to the value of your business.
3. Global Exposure
From my own experience with social media, I have clients in my home country of Australia, but I would certainly say over 60% of my contacts are in the USA. Our company receives many requests to consult in the states. I have visited Los Angeles twice in the past 18 months for work. I love, LOVE America, and I adore the fact that my job takes me across the pacific. Would I have been able to achieve this without social media? No. If your business has been able to attract international clients due to social media this is a huge value add for your business.
4. SEO Coverage
The more you tweet, post and blog helpful and interesting news and updates, the more your content will show up on Google. Eventually your brand will be associated with keywords in your industry and your name will dominate. You cannot buy that reputation, but you can develop it via social media.
5. Preparing for Future Generations
My son is 19 ("almost 20 Mum!", I can hear him say). Due to work commitments he lives in another state. We rarely speak but text every day. To him, texting IS speaking. Talk to any other parent with children in this age group, they will possibly have a similar story to mine. They may not talk to their kids, but communicate via Facebook, Twitter or Skype daily. Hey, at least we hear from them at all! Seriously though, this younger generation will be decision making adults and business leaders within 5 to 10 years. They will communicate predominantly online and this includes social media. By owning a business embracing social media, you are clearly demonstrating a dedication to future investment and growth strategy. An attractive trait indeed.
About Business Valuation
Business Valuation comes down to four key areas:
- Turnover/Profit
- Equity (amount of capital available in the business)
- Goodwill (reputation and brand loyalty)
- Customer base
Whilst social media can indirectly affect turnover, profit and equity by influencing sales, using social media to improve customer service delivery and build the goodwill of your brand occurs as a direct investment in your social media strategy . Many business owners fail to understand that social media is a powerful tool for marketers. When I hear staff within a business defiantly claim they can easily manage the social media accounts themselves, I could easily predict that a) they wont manage the accounts at all or b) they will do such a terrible job they will eventually give up and claim social media simply does not work for their business. This, of course, is rubbish. It is purely that effective social media works as a result of the hard work and dedicated strategies of marketing/media professional.
A small investment in a professional to create your social brand may just deliver immense added value should you decide to sell the business or borrow against the business assets.
At the end of the day it is up to a business owner (or management) to decide if investing time and effort into social media is worth it. I personally think any business not implementing social media is mad. However, evidence is now showing that social media may just increase the value of a business, so that tells me the one's not using social media as an important business growth strategy are much bigger fools that first thought.
Posts
