5 Principles to Monetize Your Brand Equity – Advice for Start-Ups


brand equityWe recently spoke to the “Sandbox,” a start-up incubator at the Tech Garden in Syracuse, New York. The 16 aspiring entrepreneurs there had different business concepts, but all had this in common – they were in the research and developmental stage.

This is the right time for these young ‘treps to look beyond R&D and focus on their chosen ultimate destination – the sale, and equity, of their brand.


Here’s a short summary of what we felt would be the most valuable to them at this critical stage:

1. Start at the End.

Unless you are building a job for yourself or a legacy, you are building brand equity, which is monetized upon the sale of the brand. Prepare your business from the day you start with this end goal in mind. Ask yourself these questions: “Who’s going to buy my brand? What does the buyer’s profile look like? Will my brand be a ‘bolt-on’ to their existing stable of brands? Will it give them a new market or a new niche?”

Acquirers buy brand equity, which is represented by sales, growth, and market share. Knowing ahead of time what the buyer’s profile looks like will assist you in deciding your direction, organization, strategy, and products or services. Right from the beginning, make a short list of possible acquirers and update it as you grow. Plan ahead to become an attractive acquisition target.

2. Play into their hands.

Discover what’s missing in your potential acquirer’s current portfolio. Focus on the narrow niche your brand addresses until you can be the big fish in the small pond. Don’t try to be all things to all people. Be unique and strike where the enemy is not!

3. Be a hot seller!

It’s better not be for sale than to get the reputation of a slow mover that nobody wants. So, don’t spread yourself too thin. Start small and make your learning mistakes in a limited market area. Once you learn your lessons, take your product or service on the road where you can multiply that success and ride on the wave of being a hot mover. It is important to expand slow enough that you can cash flow your expansion and not over-extend yourself financially. You don’t have to be everywhere, your acquirer can do the math and the expansion of a proven winner, albeit in a small area.

4. Do their due diligence from day one!

Assemble the buyer’s due diligence package for him. When you get that knock at the door, don’t get caught scrambling for documents that you could have had organized from the beginning. Once the acquirer has expressed an interest, close the deal as soon as possible to maintain your brand value. If the word gets out, your staff will leave and your customers will either want your products for less or they will stop buying altogether to see what changes the new owner will make.

If you have an artist design a logo, get the release now and put it in the intellectual property file. Any contract you sign put in the contract file. Reports that show your growth, profitability, or geographical expansion go in the sales file. Start today by protecting your brand value with excellent documentation.

5. Focus on what you do best.

Most businesses are founded by the creators of their product or service. This doesn’t mean that they are also good at bookkeeping, marketing, or sales. Do what you do best and hire the experts to do the rest. A major reason new companies fail is because the owner is trying to do everything and is not skilled in a crucial area. Learn how to hire, train, and delegate.

By knowing your acquirer and what he is looking for, you will have a much better idea of how to attract him. So, start at the end!