Here is the part of the branding cycle where you actually make money. You have at least two choices in this stage of brand development: seek investment to expand the bounds of the brand or seek to sell the brand to another firm. Both options have advantages. Ultimately, the decision is made on ownership, legacy, and profitability.
Who owns the brand? If it is a family brand, it may hold some sentimental value that cannot be quantified in dollars. It may be something that is closely held within the family. It may have been a family tradition to pass down the brand or the business built by the brand as a legacy for the next generation.
Investment Approach. This approach can be time-limited, share based, or profit sharing. Either way, you maintain majority control of the business while accessing needed capital to support brand expansion.
Sale Approach. Liquidating the brand is accomplished through sale outright, surrender of majority share, public offering. Sale outright usually means that you no longer participate in the business operations. Surrender of majority share may include an agreement to stay on and manage the company. Public offering may come with maintenance of majority shares, but the motive is now to satisfy shareholders.
What is the legacy of the brand? What was the goal set at the launch? In this new phase of the brand cycle, you may have goals that remain unmet. Social goals, business goals, sector innovation, and others are common.
Investment Approach. The value congruence between your potential investor and your brand is of utmost importance. Investment will mean an increased ability to establish legacy, but few investors provide their funds to extend your legacy. Even while seeking to extend legacy, you must articulate the revenue incentive for investors.
Sale Approach. Sometimes, selling the brand is completed with stipulations that the brand continue intact. The stipulations will cover is the brand is to be used, what it can be connected with, and even its look in some cases. More often, such stipulations are not needed. The buyers recognize the value of the brand and want to continue the loyalty that it inspires. Brand sale is often about the network and customers transferred in the purchase.
What is the potential for brand expansion? Some brands have a limited profit life. They lose favor after a while as the culture moves on. Think Beany Babies or Tickle Me Elmo. Other brands touch other products and turn them to gold. Think Calvin Klein or Martha Stewart.
Investment Approach. You can employ an investment approach to reach new markets, increase efficiency, effect partnerships, or buy other businesses. The goal is to maximize revenues. New markets include new sales channels, customer pools, and repeat sales. Efficiency could be seen in supply chain, production, personnel, or quality control. Partnerships could be in events, sales promotions, or name partnering. Business purchase is a quick way to gain in research and development, up your customer base, or access a new fad.
Sale Approach. Profitability would focus on communication of the valuation of the company and its sustainability long-term. Revenue history and projections, sales volume, and share price are common measures. But, brand recognition, user base, and buzz are used as indicators as well.
Michael theMentor Wright, PhD, LAPSW is Chairman of MAWMedia Group, LLC. An individual coach and institutional consultant, Wright has over 16 years, hundreds of coaching experiences, and dozens of consulting contracts completed. For individuals, Dr. Wright can help with career, authorship, entrepreneurship, or financial coaching. For educators, associations, and organizations, Dr. Wright offers curriculum, online strategy, and revenue development consultations. Contact Dr. Wright here!