Does social media increase your corporate worth?
Rachel Craig, digital content executive at Quality Formations, explains how social media impacts your company's overall worth
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 asset-based valuations are usually pretty fair, nine times out of ten they overlook various creative assets like social media.
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.
Make yourself visible
Roughly a quarter of planet earth claims membership to at least one social media site, and according to Pew Research Center 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 shoot into the stratosphere.
Ask the experts, and they’ll tell you that social media has a bigger impact on brand favourability than 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 overall company value – because keen buyers will usually add a couple of zeros to that cheque if they think you’re in control of a recognisable brand. That’s fantastic news if you own a small business without hard assets, because it doesn’t cost a penny in order to build a social media following. It just takes time.
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 ROI, most businesses don’t even bother trying to factor in social media activity. They simply take it for granted that it’s a dull but necessary exercise in brand awareness. If those companies were to deploy a few metric tools, they might be flabbergasted to know just how big an impact social media is making on their bottom line.
When you generate content on your website, you share it through social media – it’s almost always going to be a first point of contact for potential customers. So, by tracking the way customers interact with your website through consumption metrics, you should be able to develop a clear picture of how many sales leads have been generated through a single social media post. 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? Not every valuation is based solely upon assets. In fact, one of the most popular methods is a discounted cash flow system – which will look at your company revenues in order to decide how much your future earnings will be worth in the future. Bearing that in mind, any sales you’re making through social media will increase your current cash flow – thus increasing projections of your future 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.