Episode 020: Buying a Biz - Digital Marketing Due Diligence

Caitlyn: Hello.

Janet: Hi, Caitlyn. Introduce yourself.

Caitlyn: I’m Caitlyn. I am a partner here at Fat Cat Strategies and a full-time account manager. I’ve been working with home improvement clients for almost seven years now.

Janet: Yeah, a wealth of experience. So if you’ve been listening to our podcast for any period of time, you may have noticed that most of the time we talk about big picture foundational information. What is digital marketing? What is SEO? What role does it play with PPC? All of that was covered in our first 19 episodes. Starting today with episode 20, we are pivoting and leveling up. We are intentionally talking about a whole different realm of digital marketing. This is targeted to owners of home improvement businesses that have been around for a while. You might have multiple locations, a sales manager, multiple sales reps, or even a call center. The issues and challenges you face now are different from when you were just getting started. The next several episodes will focus on this level of contractor business. Today, we’re talking about growth through acquisition. You’ve reached a point where you’ve decided to purchase another business. This could be for various reasons—maybe you want to expand into another state or metro area. You’re buying another business that’s already up and running and taking it from there. We’ve been on the marketing side of this multiple times, helping clients who have grown through acquisition. They come to us saying, “Hey Fat Cat, I just bought this business. I need to market it.” In this scenario, I’ll play the typical client we serve, and Caitlyn will play her everyday role as an account manager. Let’s pretend I just jumped on a call and surprised Caitlyn by telling her I bought a company in a neighboring state. She didn’t even know I was thinking about it.

Caitlyn: There goes your entire prep of a meeting agenda out the window, and you get dropped with some pretty exciting news. First, congratulations! That’s exciting. If you were to approach me with that, I’d obviously be happy for you. But then, what would come would be a series of questions that I’m going to drill Janet on right now as we play this game. Just so you know, we’ll follow up with some resources. So whether you’re listening and taking notes or not, we’ll have content to complement this podcast.

Janet: So, I just told you I bought a business in a neighboring state. What do you need to know from me?
Caitlyn: Yeah, absolutely. So I definitely need to know the name of the business.

Janet: You mean the name of the business I just bought?

Caitlyn: Yes, not your current business.

Janet: Let’s make something up—AmazingHomeImprovement.com.

Caitlyn: Okay, great. And what does AmazingHomeImprovement.com do?

Janet: They install gutters and solar panels.

Caitlyn: Okay. And remind me again where they serve or where this company has been installing these products?

Janet: In this fictional scenario, I’m in Tennessee, and the company I just bought is in Virginia.

Caitlyn: Awesome.

Janet: Because I wanted to expand into Virginia.

Caitlyn: Great. So a couple of questions come to mind, Janet. First, do you plan on pushing solar and gutters into your existing business and merging the two, or do you want to leave them separate?

Janet: That’s a great question. I haven’t even thought about it.

Caitlyn: That’s okay. Let’s pause here. This scenario is quite common. We’ve had clients purchase a small business, and on day one, when we asked if they would leave the new business separate or merge it under their brand name, they often hadn’t considered it.

Janet: True.

Caitlyn: Why does it matter whether you leave it as is or integrate it into your brand?

Janet: It matters tremendously because it impacts your digital marketing strategy. It affects your website, SEO, PPC, social media, email marketing, and more. Additionally, you need to know if the business you acquired has accounts on these platforms. The decision to run a separate brand or not depends on the current brand’s presence and reputation.

Caitlyn: Exactly. Does it have a strong reputation that would be foolish to walk away from? Is it up and running smoothly with hundreds of reviews?
Janet: With reviews, it’s generating leads. In that instance, we might tell you to leave it separate. If it’s a small company that’s been run by maybe a mom and pop, has a handful of employees, a smattering of reviews, and not a lot of web traffic because they’ve grown through word-of-mouth referrals, then you may want to bring that into your brand. So when we’re saying merge, we’re talking from a digital marketing perspective.

Caitlyn: That’s right.

Janet: From a digital marketing perspective, that first decision is critical about whether you’re going to leave the company you bought as is, or if you’re going to absorb it into your brand. Because if you leave it as is, you’ve made a decision to support two websites, two marketing campaigns, two Facebook business profiles, two Google business profiles, two sets of reviews, two ad accounts—two of everything.

Caitlyn: That’s right.

Janet: So let’s dial in. Let’s assume we’re going to take over. We could take it one at a time. If we left them separate, what would you need? Then, if you merged them, what would you need?

Caitlyn: Exactly. Let’s go with the scenario where Janet didn’t know if she was going to merge the company. So let’s say she decided that she wasn’t going to. Janet, do you know if Amazing Home Improvements has an agency or a marketing partner that they’re currently working with?

Janet: Oh, you know what? That never came up in all of the conversations when I was buying them.

Caitlyn: So, in terms of the website presence, why does it matter if they had an agency?

Janet: It definitely matters because we’re already involved and need to figure out if we need to complement what that other agency is doing. Also, that agency probably has access to a lot of accounts now associated with your business name. You want to make sure you have those logins.

Caitlyn: I’m going to pause the scene. That exact scenario has happened. A client bought a business that had a freelancer managing Facebook, Google ads, and email marketing. The owner who sold the company failed to inform anyone about the sale. So everyone, including staff and vendors, was shocked and surprised. You now have a freelancer who has all the logins and is upset and scared because their client just sold the business. This real scenario actually happened to us. We had to navigate this situation, calling the freelancer to get the logins and going back and forth. It ended up working out, but if these conversations had been handled ahead of time, it could have been a smoother transition.

Janet: Smoother, faster, and less complicated. So, that’s one of the things to think about: what’s the name of the company, are you going to leave it separate, and what’s the impact on the brand if you leave it separate? Who owns the keys to that brand?

Caitlyn: Exactly. When we say keys, what are all the different keys that could be on that key ring if you’re going to leave that brand separate?

Janet: Well, let’s dive into the website first. So your website, your domain name—who owns that domain name?
Caitlyn: Yeah, absolutely. So I definitely need to know the name of the business.

Janet: You mean the name of the business I just bought?

Caitlyn: Yes, not your current business.

Janet: Let’s make something up—AmazingHomeImprovement.com.

Caitlyn: Okay, great. And what does AmazingHomeImprovement.com do?

Janet: They install gutters and solar panels.

Caitlyn: Okay. And where has this company been installing these products?

Janet: In this fictional scenario, I’m in Tennessee, and the company I just bought is in Virginia.

Caitlyn: Awesome.

Janet: Because I wanted to expand into Virginia.

Caitlyn: Great. So a couple of questions come to mind, Janet. First, do you plan on pushing solar and gutters into your existing business and merging the two, or do you want to leave them separate?

Janet: That’s a great question. I haven’t even thought about it.

Caitlyn: That’s okay. Let’s pause here. This scenario is quite common. We’ve had clients purchase a small business, and on day one, when we asked if they would leave the new business separate or merge it under their brand name, they often hadn’t considered it.

Janet: True.

Caitlyn: Why does it matter whether you leave it as is or integrate it into your brand?

Janet: It matters tremendously because it impacts your digital marketing strategy. It affects your website, SEO, PPC, social media, email marketing, and more. Additionally, you need to know if the business you acquired has accounts on these platforms. The decision to run a separate brand or not depends on the current brand’s presence and reputation.

Caitlyn: Exactly. Does it have a strong reputation that would be foolish to walk away from? Is it up and running smoothly with hundreds of reviews?

Janet: With reviews and generating leads, we might suggest leaving it separate. But if it’s a small company, maybe a mom-and-pop shop with a handful of employees and limited online presence, merging it with your brand might be better. When we say merge, we’re talking from a digital marketing perspective.

Caitlyn: That’s right.

Janet: From a digital marketing perspective, deciding whether to leave the company as is or absorb it into your brand is crucial. If you leave it as is, you’ll need to support two websites, two marketing campaigns, two Facebook business profiles, two Google business profiles, two sets of reviews, and two ad accounts—everything doubles.

Caitlyn: Exactly. Let’s go through both scenarios. If you decide not to merge the companies, what would you need to do? And if you merge them, what would you need?

Janet: Let’s start with not merging. Do you know if Amazing Home Improvements has an agency or a marketing partner they’re currently working with?

Caitlyn: Oh, you know what? That never came up in all of the conversations when I was buying them.

Janet: Why does it matter if they had an agency?

Caitlyn: It matters because we’re already involved and need to determine if we need to complement what the other agency is doing. Also, that agency probably has access to accounts now associated with your business name, and you want to ensure you have those logins.

Janet: I’ll pause here. This has happened before. A client bought a business, and the previous owner failed to inform their staff and vendors about the sale. The freelancer managing Facebook and Google ads had all the logins and was upset about the change. We had to negotiate to get the logins, which caused delays. Handling these conversations beforehand could have made the transition smoother.

Caitlyn: Smoother, faster, and less complicated. So, what’s the name of the company? Are you going to leave it separate? What’s the impact on the brand? Who owns the keys to that brand?

Janet: Exactly. When we say keys, what are all the different keys that could be on that key ring if you’re going to leave that brand separate?

Caitlyn: Let’s start with the website. Who owns the domain name?

Janet: Another real scenario: a client bought a company, but the previous owner didn’t transfer the domain name. Lawyers got involved, and it got messy. These questions may seem trivial, but they’re crucial because they’ve happened before. You need to know who owns the digital assets and has the logins for various platforms.

Caitlyn: Those details can’t be smoothed over. Announcing a new business venture isn’t enough if you don’t have access to the necessary digital assets.

Janet: Exactly. You can tell us about your plans, but if we can’t log into anything, we’re dead in the water.

Caitlyn: The domain name is critical, separate from just being able to log into the website. How was the website built?

Janet: Was it a custom template? Was it built by a local web developer? Is it proprietary? Only a guy named Todd who works out of his guest bedroom knows how to edit it.

Caitlyn: How would the owner know to ask that?

Janet: Ideally, go to our website and look for the downloadable PDF with digital marketing questions to ask when buying a business. These include how the website was built, who built it, and who owns it. We’ve seen situations where a website was built by an agency, but the company didn’t own it. Leaving that agency meant losing the website.

Caitlyn: Do you think it’s a red flag if the company you’re looking at acquiring cannot answer those questions?

Janet: Absolutely. If a company can’t answer basic questions about their digital assets, it’s a red flag. Your digital marketing partner might be low on your priority list, but involving them early can help you avoid these pitfalls. They can audit the company and provide valuable insights.

Caitlyn: Involving your agency is a great idea. If you’re considering an acquisition, ask your agency to do a marketing audit. They can tell you what keywords the company ranks for, the traffic they’re getting, who their competitors are, and what it would take to promote the brand if left as is.

Janet: There are tools like BuiltWith and Wappalyzer that can tell us how the website was built without needing logins. It’s important to get all those passwords and admin access to social media profiles, Google Ads, and Google Business Profile.

Caitlyn: Yes, because you need control over them. You don’t want to leave any loose ends open. We’ve seen sellers continue using the business name after selling it. It’s a legal issue but also a marketing concern. Have these conversations before signing any paperwork.

Janet: Agreed. That covers the big picture of digital marketing due diligence when considering growth through acquisition. If this is something you’re considering, visit our website for a downloadable PDF with a checklist on this topic. We hope this was helpful and look forward to you joining us for another episode.

Caitlyn: Thank you.

Janet: Thank you.

Caitlyn: Digital Marketing for Contractors is created by Fat Cat Strategies. For more information, visit fatcatstrategies.com. Thank you.