When you decide to sell your agency, you can proceed immediately or take the time to prepare. Because quick sales usually bring lower prices, planning ahead will work to your advantage. It typically takes one to two years to prepare a business for sale. This allows time to prepare the details and address any issues.
Get your books in order
Potential buyers will want to see consistent revenue growth, profits and a solid client base. Have complete and detailed financial books that go back three to five years. Treat it as if it was an audit. This is much easier with an accounting system that provides easy access to financial data. Validate your financial statements by hiring a CPA.
Document policies and procedures
Having well written policies and procedures will help potential buyers assess risk. Keep them as clear and simple as possible. Enlist the help of key employees to develop the documentation.
Update your systems
If your accounting, project management, and other systems are out of date, this will negatively impact the sale price of your agency. Why? They are slow, cumbersome and inefficient, resulting in higher labor costs and lower profit margins. Having an all-in-one agency management system will streamline processes and reduce the risk of human error by eliminating duplicate entries.
Spruce up your image
Consider the curb appeal of your physical location. Walk into your agency and imagine how it looks to a potential buyer. It’s not so different than preparing a home for sale. Is it clean and in good condition or does it need paint and new carpeting? Your online image is just as important. Your agency may have been sprucing up your client’s website and social media presence, but have you been taking care of your own? Remember the saying, “perception is reality.”
Maximize your asking price
There are many factors to consider when calculating the value of your agency, but the most important is profit. Minimizing operating costs means higher profit margins, so streamline those processes and eliminate waste.
Have a succession plan
If your goal is to sell your agency and retire, micromanaging does not fit in with your plan. A business should have managers leading day-to-day operations who have the authority to run the business when you are not there. Although you may not want to let all employees know you are preparing to sell, looping in a few key employees will allow you to call on them to help you.
What if I decide not to sell?
If you are thinking of selling your agency within the next five years, start planning now. Even if you don't end up selling the business, preparing it for sale will shine light on issues that are impeding growth.
A powerful agency management system increases staff efficiency, makes it easy to pull financial statements for buyers, and adds to the overall value of your business. Advantage Software is purpose-built for full-service advertising agencies, creative teams, public relations firms, and marketing firms of all sizes. Over 850 agencies use Advantage for Accounting, Project Management and Media. With features like a built-in document management repository, schedules, agile boards and a training video library, it has everything you need to manage your business. We’ve been helping our clients maximize productivity, efficiency and profitability for over 40 years. Find out how we can help you by contacting us for a demo. If you simply would like to learn more, sign up for our free Newsletter.