Retirement. Now there’s a loaded word. For some — it’s the holy grail that they’re working toward. For others, it’s the epitome of boredom and obsolescence. Others believe it’s an impossible goal.
Whatever your feeling about retirement, there’s one thing we know for sure. You can’t work at your agency forever. So what’s the plan?
The truth is — most of you don’t have a plan. You might have a vague idea or two, but in terms of a concrete plan, not so much (if you don’t have SMART goals and deadlines, it is not a plan!).
We do a lot of work with agency owners to get their agency in a desirable position for someone to buy it. And in most cases – it’s tough going for awhile. Most owners wait too long to get started. They want to be out in a year or two but haven’t prepped the shop for that. Waiting too long diminishes their options. I can tell you horror stories of agency owners who wanted to be out five years ago…and are still running their agency today.
So let’s make sure that is not you. For the next few weeks, I am going to focus on one aspect of your agency that needs to be in place before anyone will considering buying it. I don’t care if you’re 35 and just launched your business. You should still be building your shop so that it can stand on its own. Just like Stephen Covey taught us — begin with the end in mind.
Is your agency sellable element #1:
The more specialized your agency is, the more likely it is to sell.
I know you’re sick of the niche propaganda but hear me out. Outside buyers are much more attracted to agencies who serve a specific niche or a couple of related niches. The competition is much lighter, you can command a premium price, and the target market is clearly defined and contained. It typically also means you have fewer clients with a higher AGI and either consistent project work or a retainer agreement of some kind. Which also delights a buyer!
If you’re a generalist agency, your only real option is going to be an internal sale. Odds are your clients are local/regional and you have a lot of smaller clients with one gorilla or two.
There are a couple exceptions to the generalist rule. If you are a PPC/Paid search/lead gen. agency — then your clients aren’t typically local and you’ve got a lot of retainer clients. That makes you more attractive than a generalist marketing agency. You’ve also probably put 20-25% profit to the bottom line for the last several years, so that’s also in your favor.
For this to be a selling point for you — you have to embrace it. Your website, content, and client roster all need to support your specialization claim. You can’t hid it under a bushel because you don’t want to say no to any/all prospects who do not fall into the specialty area.
Of course, I am just scratching the surface here — but you get the message. When you’re talking about selling an agency — there are riches in the niches.
OK Drew, we’re ready to hear more!
Today’s post by Drew McLellan of AMI