How to Get the Best Deal When Selling Your Agency

Thinking about selling your agency -- someday? Is a merger or acquisition a good fit? Whether you are hoping to move on to a new adventure or stay on as an employee, it's always important to make sure your agency is in a position to maximize a merger or acquisition opportunity. In today's episode we'll cover: Why it's important to tell your agency's story. #1 Way to get multiple buyers when selling your agency. 2 Simple ways to know a merger is the right fit. Today I talked to Todd Taskey, the CEO of Potomac Business Capital. Todd's agency does a lot of merger and acquisition work, dealing with sellers to maximize their profits and find a good fit. He shares what agencies need to do to get buyers interested and how to get the best offers. Why It's Important to Tell Your Agency's Story When buyers are looking to acquire or merge with your agency, they want to know where your agency is heading. This is a good way for buyers to determine your agency's value. But the biggest mistake most agency owners make is not thinking about where they are going. The best way to increase your agency's value is to tell a story. What does this mean? How long have you had your clients? Buyers like to see longevity. If you have a bunch of new clients, a buyer will worry this revenue can easily slip away. How much do your clients like you? Yes, this is important. Likeability and trust go a long way. If your clients don't feel a sense of loyalty, they're going to use this transition as a good opportunity to jump ship. What is your recurring revenue? Those big projects are nice. But your potential acquirers want to see long term stability. Todd says he is able to get buyers to feel more comfortable with agencies that have long term retainer contracts. #1 Way to Get Multiple Buyers for Your Agency We all hope when we go to sell our agency there will be multiple buyers fighting over us. But many times you put feelers out there and then suddenly one of them sends you a letter of interest asking you to stop shopping your agency around. So how do you avoid this and get the best selling price? The simple answer is HARD WORK. Todd says he puts together a list of about 100 prospects and then goes and talks to each one. He then finds the three most serious buyers and works from there. When you find the right agency, it's all about negotiating. When a buyer thinks they are getting a great value they are more tolerant when bumps inevitability come up down the road. If you work the buyer in the beginning, it provides leverage when it comes to negotiating things like working power and non-solicitation agreements. 2 Simple Ways to Know a Merger is the Right Fit When you sell your agency, you want to know it's the right deal. Everyone's a Monday morning quarterback and will always find something they could have done better. So how do you prevent that? How can you feel comfortable with the choice you make? Todd says it comes down to a couple of things. Is it a lot of money? Funny but true, right? You don't want to walk away feeling like you got the short end of the stick. If a buyer is offering you a lot of money, it's hard to feel bad about that. Have a dollar amount in mind before you entertain any negotiations and don't settle for less (as long as you're realistic). Does the buyer share or complement your vision? If you plan on staying on with the agency, your vision is important. You need to make sure that you are comfortable with where the agency is heading. If you don't see that with the seller, it might not be a good fit. Selling your agency is a good way to make a change or take things to the next level. But you have to do it right. Take time to prepare your agency and don't settle until you find that right fit. Looking for a Payroll and HR Solution for your Agency? Payroll and benefits are hard. Especially when you’re a small business. Gusto is making payroll, benefits and HR easy for small businesses. You no longer have to be a big company to get great technology, great benefits and great service to take care of your team. For a limited time, Gusto is offering a deal to Smart Agency Master Class listeners. Check out Gusto.com/agency for 3-months FREE once you run your first payroll with them.