Know-How Exchange : Research/Metrics

I am not aware of a marketing "audit" but you should know what the owner has done, not for valuing the biz, but by planning your own plan.

If your owner has a marketing plan, discuss with him what he's done and what works and what doesn't. If his financials are detailed enough, you will see exactly what he has spent. Review this month to month, especially if his business is seasonal.

As part of your plan, you should develop your own marketing plan. Incorporate his info into yours. Many if not most of the sales I have worked with keep the owner onboard consulting for a period of time just for this kind of insight after the sale

See:
https://marketingteacher.com/lesson-store/lesson-marketing-audit.html
https://www.marketingtrenches.com/marketing-strategy/conducting-a-marketing...

Jay’s links refer to good advice, but they depend on looking at a company with some sort of formal marketing structure, with associated reporting systems in place. Most businesses don’t have that sort of information to hand and in a private business, this information is all to often in the head of the owner. To conduct an audit, you need to have verifiable figures that you can work from!

You can still infer the success of sales and marketing activity though. For all Two starting point’s are the listing of marketing activities carried out and what they cost and the sales which were gained over the same period. You can get the cost of marketing actions from the books, but someone will need to tell you what it was spent on and preferably, why.

Each activity will have resulted in some marketing outcome. If the firm you are thinking of acquiring has recorded what happened, on an activity by activity basis, you are extraordinarily lucky. Yopu are dealing with one of about 5% of SME’s which ever carry out this bit of analysis. Odd really as it can save you wasting your entire marketing spend.

Next thing to look at are sales activities and their outcome. Did people regularly make sales calls, go on sales visits, make presentations? Now, why did these sales activities occur? Were they a result of leads or enquiries generated from the marketing activities or were they as a result of existing customers or cold call new business development?

Finally, the sales ledger can be linked to the marketing activity. Looking at the last two year’s sales (If that is possible, if the numbers are not in the FMCG land) you can ask the questions: Where did that sale come from? What sales activity preceded it? Was that sales activity preceded by a marketing activity? For the last point, you should look at the last 3 years of marketing activities to see if the owner can make inferences against money spent there and sales coming in.

It’s usually a “Fill in the gaps” exercise as very few companies allow you to look at an information trail such as placing an advert, getting enquiries, using the enquiry to make a sales call, making a presentation and finally getting an order. Essentially you have two sets of figures – the hard fact of a list of orders and the woolly fact that they are somehow driven by spending money on marketing and a bunch of people doing the right things to make the sales happen.

That’s not an audit, but in most companies I’ve seen, it is as good as it gets.