How To Sell Your Digital Marketing Agency

So, you’ve decided to sell your digital marketing agency. To be successful in selling your agency, you need to know what you want from the selling process and have a plan in place to get exactly what price you want. The more organized you are, the better the selling process. Setting realistic expectations about your agency’s value can make the selling process much more palatable.

Why Should You Sell Your Agency?

There are many different reasons why a business owner would want to sell their digital marketing agency to another individual or company. Whatever the reason, it’s not always a bad thing to have to sell. It’s inevitable that all businesses will have ups and downs, and if you can’t get yourself out of a low spot you might have to sell your business and move to something else that makes more sense for you. Similarly, you might want to switch to something easier or less stressful as time goes on, and you want to make sure your agency is sold to someone who will utilize it well.

How to Sell Your Agency in Three Simple Steps:

1: Creating An Agency Worth Buying

Make it Appealing

No one looking to purchase an agency is going to be interested in a sloppy, chaotic system with no processes and documentation. To make your digital marketing agency a good investment for a potential buyer, you should have a streamlined work system with thorough documentation. It should be clear from the outside looking in that you and your employees know what you’re doing and you do it well.

Make it Repeatable

Your sales should follow the same series of actions every time and be executed as efficiently as possible. It should be simple for a buyer to take over your digital marketing agency and know what to do right away, without having to stumble through things and possibly cause trouble for themselves in the process. Document your sales and operational process so the potential buyer knows you have a scalable process. If your agency is using a CRM (which it should be) then this will help organize customers, prospects and sales forecasts.

Make it Respectable

Even if you aren’t trying to sell your digital marketing agency right now, you should be making an active effort to become well-known for quality services by your customers and clients. If you specialize in a specific vertical, you should aim to stand out as one of the best in that vertical, and your clients should be satisfied with the marketing service you provide. Your employees should be trustworthy and reflect the work of your agency, and it should be clear that everyone involved in your agency is striving for excellence. Having a strong reputation will help in your agency’s intrinsic value.

Make it Profitable

A digital marketing agency with only temporary one-project clients may succeed for a little while, but in the end they can struggle in the long run. If you seek out clients who are looking for long-term contracts, you will be bringing in a more consistent revenue that can continue after a buyer takes over. A recurring source of revenue is ideal for a buyer, because it means they’re already set up for success and it makes their job a little bit easier.

When someone buys your marketing agency, they are buying the business’ future stream of profits. The acquisiton formula is usually some “multiple” of EBITDA (earnings before interest, taxes, depreciation, & amortization). Digital marketing agencies can realistically sell from anywhere from 1.5X – 10X EBITDA. Of course this is depending on a multitude of factors. Some of the factors are:

  • Size
  • Project vs. Retainer Contracts
  • Revenue
  • Debt

Ultimately, your agency’s value is whatever someone is willing to pay for it based on a set of variables. The reality is that you and the the buyer must agree what you are willing to sell your agency for. If you come into this process with unrealistic expectations then you will not only become frustrated quickly but also lose valuable time and money during this process.

2: Finding the Right Buyer

Advertise Well

One great way to get word out there that you’re selling your digital marketing agency is to talk directly to people about it. If you know other people in the digital marketing agency industry, tell them about your agency and ask them to share it with anyone they know who might be interested. Not only is this a good way to spread the word, but it also gives you a more genuine connection with a potential buyer and shows them that you–and by extension, your employees–are willing to do the hard work to make sure your agency ends up in the right hands.

Hiring a professional business broker can also work well, because they have access to a network of people who are already looking to buy a business. And because they earn a commission from the sale, they’ll also be aiming for a higher selling price.

The downside of working with a business broker is that they typically charge around 8% to 10% of the total selling price. That’s a significant amount of money for someone who doesn’t know your business vertical.

Know What a Buyer Will Want

Anyone making an investment as massive as buying a business will want to be certain that everything is in order documentation-wise. When meeting with a potential buyer, you should be prepared with a mutual non-disclosure agreement to share things like your business’s balance sheet, financial records, performance indicators, and client/project summaries. All of these should show that your business has potential to be continued and improved upon by a buyer. As the seller, you should also be open and ready to answer any questions they might have–within reason–with confidence.

3: Selling Your Digital Marketing Agency

Know the Worth of Your Agency

Before you even attempt selling your business, you should be aware of what it’s worth in the current market. Look for the demand for agencies like yours and roughly the price they’re selling for. You should price your agency according to real facts rather than the ideal profit you’d like to make off of it.

Negotiate Well

No matter how much back and forth negotiating you do with a buyer, you should always have a final price in mind from the start. When you do reveal this to the buyer as the price you really want to sell for, you should have a variety of valid, real-life examples to back it up so that they understand your thought process and feel assured that they’re making a reasonable exchange.

Hire a Lawyer Who Fits Your Needs

When choosing a lawyer to represent you in selling your business, you should find someone who is familiar with the process and knows how to make it happen.They should understand the urgency that you’re working with, and they should be able to help you rather than hinder you.

Be Prepared to Train the Buyer

After selling your business, you should be ready to train the buyer and show them how your business functions before you step out. During this process, it’s best to try to stay on the same page with them, and to have a plan in place to make any changes they’d like to make.

How To Sell Your Marketing Agency Conclusion

Whether you intend to sell your marketing agency someday or not, you should always run it like it’s going to be sold. You should be able to see it from a wider perspective and make sure everything is running smoothly, both in large-scale projects and day-to-day work. Building it into the most high-quality and profitable business possible is a great thing for everyone involved.

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