How to Prepare Your Marketing Agency for Acquisition
Are you thinking about selling your agency, but aren’t sure where to start? Are you going through an acquisition and want to make sure you get it right? Selling an agency can seem overwhelming to someone who has never done it, but the more you know, the easier it will be.
In today’s episode, we’ll cover:
- Why you need to enter an acquisition with a clear vision.
- 2 things to include in agency valuation.
- #1 reason to take your time during your acquisition.
Today I sat down for an enlightening chat with Jack Burris, CEO of 54 Brands. After over 20 years in the business, Jack recently closed on an acquisition. He’s here to talk about what the process looked like and how he made sure the whole process went seamlessly.
Why You Need to Enter An Acquisition with a Clear Vision
If you’re thinking about selling your agency, it’s easy to become distracted. Far too often we spend so much time worrying about the money, we forget about why we got in the business in the first place. But when you evaluate your priorities, you’re more likely to be satisfied with the end results.
Jack is less than a year out of his agency acquisition. And so far, he has no regrets. One of the main reasons is he went into the process with a clear vision of what was important to him — the evolution of the agency and the clients. Knowing the new owners were on the same page in both regards, Jack says the acquisition went better than anticipated.
2 Things to Include in Agency Valuation
Price is a sticking point during any negotiation. You’ve put your blood, sweat, and tear into your agency. You want to make sure you get a fair price. But this is more than just a multiple of EBITDA. If you have a non-conventional agency or unique traits that make it special, it’s important to make it’s included in your valuation. What does this mean?
- Client relationships: At the time of the acquisition, 54 Brands didn’t have a lot of recurring revenue. But one thing they did have was long-term relationships. Some of their clients had been with the agency for more than 15 years. These relationships are important and add value to the agency.
- The agency structure: The agency had fewer full-time employees and more contractors. Jack believes their team structure was a big selling point because it allowed for more control over profit.
#1 Reason to Take Your Time During Your Acquisition
Let’s be honest. As entrepreneurs, we can be inpatient. During an acquisition, it’s easy to think, “Why is this taking so long?” But Jack explains it’s important to take your time. Not rushing the process allows for two things. Not only do you have more time to make sure you get the numbers right, but you also have time to process your emotions. Giving up control of your agency is a big deal. Allow yourself enough time to process the transition so you don’t immediately second guess your decision immediately following the acquisition.
When you’re going through an acquisition, it’s important to look at the big picture. It’s about more than just the money, it’s about where you want to see the agency in the future. When you take your time and set clear priorities, you’re more likely to be happy with the end result.