Agencies are not considered the easiest companies to sell. Far from being a simple entity with a straightforward product range, widgets or assets, agencies typically involve a lot of moving parts, most of which are people. Clients, team members and suppliers are interwoven to constitute an agency in a particular niche. It can be complicated. Agencies are easy to set up but harder to exit from. If you want to exit yours, you need a plan.
Jodie Cook is a former agency owner. After setting up JC Social Media in 2011 at the age of 22, she sold it ten years later and her handover to the new owners took two weeks. During the time she ran her agency, Jodie travelled the world, competed in powerlifting and wrote several books on entrepreneurship. When she was ready to sell she took intentional action towards making it happen, which she has documented in this how to sell your agency course.
Here is Jodie’s advice on how to sell your agency based on her experience of doing just that.
- See your agency as a product
“Perspective is key here,” she explained, “so zoom out and see your agency as a product, from the perspective of a buyer.” When you’re ingrained in the day-to-day you can get wrapped up in the detail. “Try to see your agency objectively. If a buyer was looking over it, what would they think was good? What would they want to change?”
What would need to happen before you put your agency in front of a buyer? Start there. Your agency is worth what someone else wants to pay for it, so make sure that value is clear and present.
- Recurring revenue focus
“Project-based work can put buyers off because the sales team has to always be closing,” warned Jodie. “It doesn’t mean you won’t sell your agency, it just means you need to work harder to prove that your customers will keep coming back or that your sales team is effective.”
Ideally, your revenue is recurring. Monthly recurring revenue, where your clients are in contracts, is the best situation for everyone. If your business can move towards this model it will make it a more attractive entity and less of a headache for you in the meantime.
- Get your files in order
When you sell, due diligence is inevitable. “This can be quick and easy or long and painful,” explained Jodie. “It depends how organized you are.” Get organized now. Jodie advises you put your contracts, agreements and documentation in clearly-labelled folders on your computer.
Fill in any gaps and look at your documentation from the perspective of a buyer. Does what you see represent a solid, trustworthy firm backed up by paperwork? If not, trawl through your emails to find missing documents and ask your suppliers to re-send their agreements.
- Systemize your agency
“Agencies should work by default and break occasionally,” said Jodie. “Not the other way around.” Which applies to you? If you went away for the next month and were completely uncontactable, what would happen? If your agency would still be running, it’s likely systemized sufficiently. If not, there’s work to do.
“Write a list of every single process takes place within your agency,” said Jodie. “Then write down who does it now and who should do it in the future.” This is where you train your team to do what you are doing, removing yourself from the day-to-day. This is also where you create process documents, so there’s a standard way of doing standard processes.
- Create your deck
Most agency owners know how to create a deck. They create pitches and proposals for clients and prospects. “Make a similar document, but this time you are selling yourself. Use your proposal template and include an overview of your team, clients and the work you do. Include some pointers on why you are a solid bet for a buyer. Include the reasons why you want to sell.”
In preparing for sale, not only should you see your agency as a product, but you should treat it like one by making a deck you are proud of. This will go in front of potential buyers and you will be asked questions on its contents. “Be honest and be ready.”
- Keep it to yourself
“Until we had signed the papers, hardly anyone knew I was selling my agency,” explained Jodie. The information in the wrong hands could be disastrous. It might worry your team and confuse your clients, and you don’t know what they’ll do.
Jodie advises you “don’t tell anyone at all what you are doing.” Beyond your partner and essential shareholders, keep your mouth closed. “Remind yourself that any sale you are progressing could fall through at any moment.” Telling other people is merely a sign of ego that could cost your business.
- Get intentional about selling
“When you have your deck and your processes sorted and you’re confident you’re ready to sell, get intentional about making it happen.” Jodie spoke in confidence to mergers and acquisition consultants who specialised in agencies. One introduced us to a marketing agency broker who we ended up going with, who introduced us to buyers, joined me for meetings and helped us negotiate our perfect deal.
“Once you’re ready, you should approach buyers all at once,” she explained. “This creates urgency and can mean a bidding war, driving up the sale price.” Jodie knows some agency owners whose sale never came to fruition because they simply weren’t intentional about it. Don’t let this be you.
If you know you want to sell your agency, set the wheels in motion now. See your agency from a buyer’s perspective, systemize, document and don’t tell a soul. After that, get intentional about finding your deal. Agencies are sold every month and yours could be one of them.
