EBITDA: Your Marketing Team Matters

EBI-WHAT?

EBITDA stands for: Earnings before interest, taxes, depreciation, and amortization

It’s the formula that business brokers use to determine the value of a business in a buy/sell transaction. The higher your EBITDA, the more money you will get when you sell your business.

At The Edge Agency, we meet with business owners every month who have just bought or sold a business, many for the third, fourth, or fifth time.

If you’re planning to sell your business, you need to start looking at your EBITDA far in advance.  In our opinion, it should be the basis on how you’re building your business and determining next steps if this is your end goal.

Here are a few ways in which we work with clients to RAISE their EBITDA prior to selling.

Are you selling a business? Tips to raising your EBITDA

•     Identify brand pillars, core values, brand promise, mission statement

•      Clarified messaging and tagline

•     Professional brand identity 

•     Website quality and functionality

•     Annual marketing strategy with goals, budget, timeline, and estimated return on investment (ROI)

•     Build an audience online NOW 

•     Optimize your search engine NOW – organic SEO, invested SEO and long-term rich SEO

•     Set up a Google Business profile and focus on google reviews early and often

•     Grow a database and send email campaigns now to increase brand awareness of your company and grow the brand equity

•     Clarify your processes and develop company Standard Operating Procedures (SOP)

•     Work ON the business and train others to operate without you — DELEGATE

·      Margins matter, pay attention!

·      Digital advertising and digital marketing is factored into your EBITDA score

Are you buying a business? Questions to ask before you sign the dotted line 

·      What’s your timeline?

·      Is there a recurring revenue model?

·      Where does the business come from? Online? Sales team? Contacts?

·      How’s the company culture?
·      How are the margins?

·      Will the new owner have to be IN the business, or can the company run without them?

·      Are you buying a system or a book of business?

·      What is this worth today and what’s the potential ROI?

·      Will the business need a new name? New brand?

·      How much brand equity exists in the business today? What will I lose if I change the name? What will I gain if I keep the name/logo/brand?

·      Where are there inconsistencies that I can fix to increase brand alignment with my customer base?

·      How will I fund this purchase? Loan? Cash? Selling assets?

The Edge Agency is all about enterprise growth and helping our clients make money. We want your business to thrive and grow, whether that’s through strong strategy, clear branding, marketing, sales, business development, PR, or acquiring other businesses.