Most small business owners got into business because they wanted to create something of their own and be their own boss. Many of these entrepreneurs fail to realize that what they are building is actually a sellable asset. In many cases, it is their largest personal asset and makes up the majority of their family's net worth.
Of course, not all businesses are worth the same. Even businesses in the same industry and in the same city can have much different valuations. The reasons for this disparity in valuation typically fall into 4 categories:
By now you have likely been told that having a strong content marketing and SEO strategy will push you to the top of Google's search results and get you more customers. The value of this form of marketing is not in just the number of clicks you are able to get in a given month, but also in the fact that these marketing efforts compound over time. Unlike paid search and social media marketing where you'll need to continually pay to get customers, with content marketing you only need to have the content created once. In fact, if you produce a quality blog, podcast or video, you will likely get other websites to link to it, share it and comment on it. This in turn brings you even more visitors and costs you nothing. This is why quality content marketing and SEO is seen as the gold mine of digital marketing.
Businesses that invest heavily in SEO and have a strong online presence not only appear to be more trustworthy to potential customers, but to potential buyers as well. A serious buyer will not only see the fact that you are getting
thousands of organic visits each month, but that you can control your own reputation online. By showing up prominently in Google search, your business is being validated by Google as being an authoritative and reputable business.
It is no secret that many industries have transitioned from brick and mortar establishments to online first businesses. Even before COVID it was evident that if businesses didn't offer their service online or have their website ranked on Google that they would lose customers to those that did. However, not all industries rely on digital marketing and organic traffic the same amount.
As traditional retailers have steadily closed up shop over the past decade, the Ecommerce industry has grown by double digits every year. Of course, because ecommerce businesses can only get customers by marketing online and because they are not only competing against the other retailers in their region, but against all retailers in the country, the competition for website traffic and purchasers is fierce. The competition has become so fierce in fact that marketing expenses is now the largest expense on the income statement for many ecommerce stores.
If an ecommerce business is able to carve out a niche for some of their products and get organic traffic that converts into sales, this is as good as gold. This means that they would be able to nearly eliminate their marketing expenses and all of those savings will go straight to the bottom line.
Simply put, Ecommerce businesses with consistent sales coming from organic traffic are much more desirable and will sell for a higher valuation multiple than those that continually have to pay for marketing.
Unlike traditional retail, this business will be very hard to offer through the internet. While there may always be a need for construction companies to provide their service with boots on the ground, the old ways of marketing construction companies with flyers, billboards and TV commercials has been taken over by digital marketing.
Online marketing and in particular SEO has quickly become the best way for B2B and B2C construction companies to get customers. Unless consumers get a warm referral from a trusted friend or family member, they will go straight to Google and call a few of the companies that show up towards the top of the search results. Construction companies who invest into their SEO will be rewarded with a growing business and a steady stream of leads coming their way and a higher valuation multiple.
Like construction, restaurants are a business that can not easily offer their service solely through the internet. In addition, one of the deciding factors in hungry customers heads is how far away a restaurant is from them. Where construction companies may have to market against all of the contractors in the city, restaurants will likely only have to market against other competitors within a couple square miles. This makes ranking your restaurant website and Google Maps listing much easier.
While organic traffic to your website and Google Map listing are beneficial, cleanliness, quality of food and customer reviews play a much higher role in a customers buying decision. Because of this, organic traffic makes very little impact on the valuation of restaurants.
Unlike restaurants and ecommerce businesses that make only $20 - $50 per customer and construction companies that typically make a few thousand, it is not uncommon for manufacturing companies to make tens or hundreds of thousands of dollars per year off of a single customer. In addition, there is far less competition to rank for manufacturing related keywords than there are for Ecommerce or even construction companies.
Because many manufacturers have residual clientele, they often don't put a focus on marketing, they simply continue to work with the customers that they already have. However, if you are in a growing manufacturing niche and looking to take on more business, there is no better way to do so than with SEO to drive organic traffic. The limited competition combined with the lucrative nature of the industry means that you'll be growing hand over fist. In addition, this will greatly increase the valuation multiple that an investor or business buyer would be willing to pay.