Every business owner wants to know what their company is worth. Whether you’re looking to sell, on the hunt for a business loan or simply curious – it’s only natural. The problem is, trying to suss out just how much your company is worth can be pretty tricky.
Most company valuations are incredibly subjective, because different aspects of your corporate structure are inherently going to vary in importance to different investors. That said, almost all valuations revolve around the tangible resources a company has got. And while these
But to be brutally honest, if you’re a small business, social media very well may be the single most powerful asset you’ve got – and it simply must be factored into your overall corporate worth. This is why:
Make yourself visible
Roughly a quarter of planet earth claims membership to at least one social media site, and over 74 percent of web users are constantly logged into mainstream platforms like Facebook, Twitter and LinkedIn. I shouldn’t have to spell out the potential impact this colossal user base could have on your corporate following. After all, if you’re able to reach just one percent of those social media users, your brand awareness will absolutely shoot into the stratosphere.
Ask the experts, and they’ll tell you that social media has got a bigger impact on brand favourability than just about any other content marketing technique out there. By engaging in quirky, uncensored dialogues with customers in real time, you’re able to establish strong links that will do wonders for your overall brand loyalty. That’s extremely important to your company value, too – because keen buyers will usually add a couple of zeros to that cheque if they think that you’re in control of one or more recognisable brands. That’s fantastic news if you own a small business without a lot of hard assets, because it doesn’t cost a penny in order to build a social media following. It just takes time and a little bit of patience.
Tally up sales
Another reason you should be factoring social media into your corporate worth is because it is a huge sales generator. When it comes to generating ROI, far too many businesses don’t even bother trying to factor in their social media activity. They simply take it for granted that it’s a dull but necessary exercise in brand awareness. But if those companies were to deploy just a few simple metric tools, chances are they would be flabbergasted to know how big an impact social media is actually making on their bottom line.
When you generate content to put on your website, you share it through social media – it’s almost always going to be your first point of digital contact with potential customers or clients. So, by tracking the way in which customers interact with your website through consumption metrics, you should be able to develop a clear picture of how many sales leads are being generated on a regular basis through your social media posts. Those sort of figures are invaluable, and they prove beyond a shadow of a doubt that social media makes your company money.
How does that help to increase the value of your business? Because not every valuation is based solely upon assets. In fact, one of the most popular methods is a discounted cash flow system. This method estimates the money that an investor would receive from purchasing a company adjusting for the time value of money. In other words, it will look at your company revenues in order to decide how much your future earnings will be worth if they decide to invest now. Bearing that in mind, any sales you’re making through social media today will increase your current cash flow – thus bringing up projections of your future corporate worth.
Finally, customer service plays a major role in deciding how much your company is worth. There’s nothing new about that. After all, the way you treat your customers and interact with them usually impacts heavily upon your company’s overall ability to make a repeat sale. If your customers aren’t happy, sales go down – and so if your company is being valued using the discounted cash flow method, each sale you’re making now increases the long-term worth of your business.
How does this all relate to social media? Because it’s the single-greatest customer service tool at your disposal.
Social media empowers your customers, by giving them a tangible, online voice. If they don’t like your service, they can instantly publish a scathing review to thousands of followers. Likewise, if they are particularly pleased with a new product you’ve just launched, a whole lot of people are going to find out about it. Social media is word-of-mouth marketing on steroids. As a result, a healthy relationship with your customers on mainstream sites like Facebook and Twitter might make or break your long-term future.
When investors think about buying a company, chances are they’ll visit its social media profiles before they even think about requesting financials. That’s because these sites provide meaningful insight into the ways in which business owners interact with their customers. Are they going out of their way to answer queries? And how are they addressing negative reviews? If you’re looking to sell your company, acquirers will be taking all of these interactions into very heavy consideration – and it will ultimately weigh on your overall corporate worth.
At the end of the day, social media is the single most effective way to reach potential clients and customers. If you’re not already signed up, do it now. But in order to maintain a successful social media presence, you’ve got to put in a lot of hard work. Don’t just spit a dry, advertisement-heavy monologue at customers. Engage with them. Challenge them. Not only will it earn you a bit of newfound respect and brand loyalty, but it will help to drive your sales.
When you’re finally ready to sell your business and go off searching for a new challenge, all of that social media activity just might add a hefty sum to your company’s price tag.
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