Are you looking to sell your digital marketing agency? With today’s digital landscape, digital marketing has become an integral player in the business world. Understandably, many digital marketing firms have sprung up all around the world and thus saturated the market. In order to make the most of your company, you might want to sell it.
For those who have put in the hard work to create a successful digital marketing agency and want to sell, this blog aims to help guide you. Our steps are aimed at making the sale as lucrative and efficient as possible, however, reputable companies like Lloyds Brokers can help ensure you get the best value for your business. Shall we begin?
What determines the value of your digital marketing agency?
The first step to any sale is to ask the question, “Do people want in?”. The more attractive to potential buyers and investors your digital marketing agency is, the more valuable it will most likely be.
So, what aspects of your business are investors or buyers going to look for that will determine if you’re going to get a satisfactory price? Here are a few factors to consider:
- A high bill rate would be a good indicator, as this indicates that your business has a consistent demand – thus increasing its revenue stream and profitability.
- Having high-value customers is also a good indicator. For instance, having a single client who pays $50k is more preferable over several who pay $3k
- A trend of consistent growth
- Higher margins than competitors
- Customer retention is also a good indicator. Do you have customers coming back or consistent, loyal customers on retainer?
- How your team functions. Do you have a good team of employees that keep up with KPIs and work efficiently?
- Does your agency have a good reputation?
Steps to Sell Your Digital Marketing Agency
In most cases, people have started their digital marketing company from the ground up. It can be pretty intimidating thinking about how to go about selling the business to ensure you get paid what it’s worth. Here are some steps to help you get it right:
Step 1: Get the right people
The first step to getting your marketing agency ready to sell is to get people around you. Surround yourself with individuals who know the market well, and can gauge what the market is looking for in terms of Digital Marketing Agency.
This essentially is getting someone in who’ll help you plan strategically and help you shift things around so that the business looks more attractive to potential buyers. They will also be good at providing you with the necessary guidance to meet legal regulations and optimize your tax. A broker from Lloyd Brokers has the experience and know-how to assist you.
Step 2: Create the deal
Once your strategy is in order, it’s time to compile a list of all the materials needed to write up a deal. Your advisor will ask you for all the necessary documentation like financial statements, supplier and client contracts, and other relevant details to ensure they can write up a transparent deal to present to potential buyers.
From there, they’ll create a comprehensive document encompassing everything related to your business and its expected financial forecast. They’ll then market this, sending it to investors and buyers within the industry.
Step 3: Receive IOIs
Once your notice of sales is out worldwide, you should start receiving IOIs (notice of buyer interest). This generally happens pretty fast with larger firms that show a more promising return on investment.
From here, you can shortlist buyers who look more promising and have more synergy with your business. Touch base with them and give them more information regarding your business and the opportunity to plan better for the meeting ahead.
Step 4: Meet with potential buyers
Meeting with potential buyers is your time to shine. Here, you can sell your business to them, seeing if they catch your vision and what their ideas would be for the business. From these meetings, you should hopefully get a revised letter of intent from potential buyers, who will provide you with their final offers and hopefully improve upon their initial offers.
Step 5: Do your due diligence
Another 60-90 business days will pass for you and the buyer to do their due diligence. During this time, it’s helpful to get all your paperwork in order so that you’re ready to close the deal when the time comes. Potential buyers will also be doing their due diligence during this time, so expect questions from their team.
Step 6: Close the deal
At this stage, the deal should be done, and you should get paid for most of what you’re selling your business for. The new owner might also require you to stick around for a while to help the business transition with new ownership.
FAQs
What are common challenges in selling a digital marketing agency, and how can I overcome them?
Selling a digital marketing agency often involves challenges like accurately valuing the business, dependency on a small number of clients, retaining key staff, and keeping up with technology. Overcome these by ensuring your financials are transparent and well-documented, diversifying your client base, offering incentives to retain crucial employees, and staying abreast of the latest digital marketing trends and tools.
Can I sell my digital marketing agency if it’s not profitable?
Yes, it’s possible to sell a digital marketing agency that isn’t currently profitable. Focus on the value the agency could offer to buyers, such as its client list, talent, or potential for improvement. Be prepared for the possibility of a lower selling price, reflecting the agency’s financial health.
Should I use a broker to sell my digital marketing agency?
Deciding to use a broker to sell your digital marketing agency depends on your specific needs and situation. Brokers can provide valuable expertise and access to a wider network of potential buyers and take on the heavy lifting of negotiations.
However, they also come with costs (usually a commission) and might reduce your control over the selling process. Consider your ability to manage the sale process, your knowledge of the market, and whether the cost of a broker is worth the potential benefits.
