Is Your End Goal to Sell Your Agency?
Then a smart strategy is to start creating a business system that generates profit and a brand that stands out.
A lot of agency owners tell me they want to sell their business, but the business revolves around them, so they don’t have anything to sell. This is called key-man risk, so the less your business depends on you, the better the sale outcome will be.
A buyer is purchasing the certainly of future profits, so if you are looking to build an agency to one day sell it, everything must be geared toward this.
The following list will show you if you’re heading in the right direction of building a saleable asset.
Does your Business Have, or are you Starting to Build:
- Strong market brand advocacy
- A clear offering that stands out over your competitors – well known to all
- Readiness/ability to scale
- Systems and processes that drive predictable profit (that run without you!)
- A clean and clear business structure
- Compliance – Legal, OH&S, financial
- Clear Financials – Including clear EBITDA (This will most likely be used with a multiple in conjunction with other factors to establish your company’s value)
- Clear delineation between company and personal expenses
- Strong Leadership – Are there people that can confidently run the business when you leave?
- A good spread of clients
- A viable market
- Tangible evidence of client satisfaction
- A commitment to start acting bigger than you are. That is, getting compliance around CRM, marketing systems etc
Get yourself well connected with the right business advisors so you can speak to the right people when you are getting serious about selling. Plan as far out as you can.
Be Patient! The due diligence and sale of an agency can be a gruelling process of 6 – 12 months or longer. So, do you have what it takes to run a business and meet the intensive and extensive demands of the due diligence process? Of course you do!
When I sold my first business, what struck me was just how much information needed to be shared, the detail required and how long the process was. Selling a business is a marathon that’s for sure, so if your end game is to sell start asking yourself what you need to start doing now to get the best outcome.
Even if you have no plans to sell, circumstances can change and if you set your business up to sell, you then have the choice, you also have a business that is set up to deliver high profits and remove you from the day to day so you can go and enjoy yourself.
I think that was why you started your business in the first place 🙂
Thanks for reading!