Speaking from experience, changing your brand to better reflect the company you are today is challenging. After 28 years, we made the decision to step away from ‘Software Europe’ and rebrand to ‘Selenity’. It wasn’t an easy decision to make, but it was the right one. Software Europe has been part of my life for 25 years and after so long you become attached and familiar with what it means and what it stands for.
There is a fear when companies rebrand or change names that it could somehow change the ethos and principles of the business, especially if you are trying to grow the business into new areas and attract investment. But, in this hyper-competitive world, a little bit of change can be a good thing.
With software development and cloud being ever more accessible, it’s never been easier to take your million-dollar idea and develop it into a working product.
Of course, the easier it is for ideas to become products, it means there is increased competition in the market. Official Government statistics tell us that there were 644,750 companies formed in the 12 months to 31st March 2017. Of course, there were also a lot of companies that failed as well, but the number of businesses registered is now up 5.9 per cent on the previous year. The age of companies is coming down too, with almost half of businesses registered in the UK being between one and four years old.
In such a competitive market place, branding is everything; it’s what can make or break a company. You could have the best technology, the best services, and the best products in the industry, but if you aren’t able to tell your customers in a way that makes them listen, then you’ll struggle to beat even the most average of competitors.
It’s compounded by the fact that the world changes and keeps moving so what was once a refreshing, innovative and perhaps even quirky brand can become outdated.
Our own company was founded in 1989 and was named Software (Europe) Limited, but trading as ‘Software Europe’. When we first started out, we were a software reseller. Now though, we have our own portfolio of proprietary cloud technology across Finance and HR and, whilst we do technically sell software, it’s all hosted in the cloud and we operate a Software as a Service (SaaS) model.
Our own desire to change came from the need to update our brand to better reflect the organisation we are today, and that’s the first question you really need to ask yourself – does your brand reflect the organisation that you currently are? If the answer is ‘no’ then perhaps that’s your first step in considering whether a name change is right for you.
Do your customers get it right?
The other challenge we faced was that our customers were getting our name wrong. Some called us Software Europe, some called us Expenses (after our flagship product) and, confusion arose from the fact our trading name is different to our company name.
If your customers are consistently getting the company name wrong in emails, conversations, or even legal documents? Again, this is a good indication that you should consider a name change or rebrand.
It may seem counterintuitive to change your name. You’ve spent years building up your brand and your reputation. Your customers know you and, if you’re good at what you do, your prospects will have heard of your brand, and your competitors too. When you’re a mature business there’s the misconception that rebranding can do more harm than good.
You’re probably right if you’re just changing your name for the sake of it, but if you have clear, tangible ideas about why you’re changing your name and understanding the potential benefits it will bring, then it becomes much more than a simple change of name.
What investors really want to see
There are a lot of different factors involved in a decision to invest in, or even acquire a company, and the relative size and growth of the company isn’t necessarily the sole reason investors will consider your company.
They want to see solid recurring revenue and low churn rates and, ultimately, they want to see a management team that is committed to the business. Are your products good and do they show potential to deliver revenue in the future?
Fundamentally though, serious investors will be looking at your business as a whole and changing your company name is a statement to all of your stakeholders – staff, customers, prospects, competitors, and the investors you want to talk to – that you’re pushing the business forward. That your refusal to remain stagnant and are willing to make big changes to keep up momentum.
I know for many, the dream is to run their own successful business and see it grow but don’t ignore the opportunity to be acquired. Whilst not what you necessarily considered, the company that acquires you can take yours to the next level.
As an example, we saw an amazing piece of HR cloud technology that fitted well into our portfolio. It was a true start up called Workforce Metrics, with just one person in the company and around £30,000 a year in revenue. That technology ended up becoming our ER Tracker product.
In the two years since acquiring ER Tracker, we’ve made the MD a director and shareholder in Selenity and have been able to grow the product to £500,000 a year in recurring revenue. In the technology industry, companies are valued at around between 3-6x its revenue stream, making ER Tracker alone potentially a £3 million company.
My point here is that being acquired isn’t always a bad thing.
Cost of change
The cost of changing your brand is not insignificant either and needs to be taken into account. There are obvious changes that will need to be made – your website, logos, letterheads, for example – but you’ll also need to consider all your legal documents you have, from the contracts with customers through to being correctly registered with Companies House.
The longer you’ve been in business, the deeper your branding will have permeated and the more challenging, costly and time consuming the change will be.
But the pay off could be well worth all the time and effort you’ve put in. In such a competitive world, rebranding and changing your name could be the difference between standing out from the crowd and securing new investment, or getting lost in the crowd.
Final tip – when you choose your new name, don’t forget to make sure the domain name is available!
Neil Everatt is CEO of Selenity (formerly Software Europe).