Most firms don’t realize it but branding is as important for private equity firms and their assets as it is for any other industry – and we’re not just saying it because we’re a branding agency. Portfolio Companies with strong brands grow faster, earn greater profits, and sell for higher multiples than companies without. It’s not about having the most creative logo, or the funniest tagline, it’s about positioning your company to own and succeed in its space, because in today’s uber-competitive market, a stronger brand makes all the difference.
Historically, brand positioning and development has played a very minor role in the private equity world, taking a back seat to the quantitative financial metrics that specifically report on performance and asset value. And while many still view having a brand as an intangible asset, there is more and more evidence that brands are essential to showcasing value, leveraging negotiations, and even improving asset performance. In other words, with the right branding, you can generate hugely outsized returns.
It should be obvious, but a portfolio company’s brand should be a principal asset: one that can be leveraged in ways that no others can. Distinguishing and differentiating brands create defined competitive advantages that can help sustain growth, even through intense competition and market fluctuations. A well-crafted brand increases preference, instills loyalty and forecasts future success, all of which makes for a better negotiating position.
Creating a real, focused brand is a deliberate choice to build value and it shows to customers, employees, and most importantly shareholders. The best firms make successful branding and positioning a priority from the outset because they understand that a well positioned brand has remarkable potential to nurture and accelerate growth. Aligning and extending cohesive branding across all constituents, both externally and internally, helps companies adapt and respond to market changes, overcome new competitive challenges, or even pivot to a new primary business focus.
In short, having a strong brand and market position should have a place at the core of your value building strategy, rather than be left as an after thought. The best firms create value in their portfolio companies by examining each asset holistically, from the brand to the numbers, ensuring that everything is aligned to generate faster growth and bigger returns.
To learn more about branding portfolio companies and how Brand Iron can help you create increased asset value, contact us today.
Check out the ways we’ve helped our private equity clients in the past!