Conventional wisdom suggests that you should never attempt to “time the market.” This is true for buying investments and true when looking to sell your marketing agency. But with evolving economic, tax, and labor factors, 2023 is shaping up to be a good time to sell your marketing agency. In these conditions, you’ll likely get the most money you can for your agency.
2023 Economic Headwinds
- Interest rates are rising which means it will be more expensive for businesses to access capital to buy your business. The Federal Reserve is planning additional rate increases in 2023 to combat inflation.
- Economists are forecasting a recession sometime in 2023 due to rising interest rates. Companies will spend less money for acquisition and for overall marketing efforts.
- Pending economic factors will impact the marketing sector which will cause it to consolidate. This will have a negative impact on business valuations.
- Over the past 2 years, you have witnessed first-hand rising labor costs. This has impacted your margins and challenges growth. Filling fill key marketing positions costs agencies more money.
- Tax increases will also impact marketing agencies. There is potential for congress to raise capital gains taxes rates during the current administration.
- Rising energy costs, socio-economic challenges, vulnerable supply-chains, and stock market volatility are among just some of the pending geopolitical issues that impact businesses large and small.
Now Is a Good Time To Sell Your Agency
Given that marketing agencies are facing a tough business environment now, there is no telling what the capital markets for selling a marketing agency could look like in 2024 and beyond. With all these factors taken into consideration, we believe now is a good time to sell your marketing agency.
If you are serious about selling your marketing agency in 2023, we recommend you start the process now. The last several years have shown us how rapidly the economic climate can change, which could have a negative impact on your agency’s revenue and business valuation.
How To Start the Selling Process
First, review your company’s finances and collect the necessary documentation needed for a formal business valuation. Enhance your chances for sale price by addressing any issues before you go on the market. Make your business as desirable as possible to increase valuation.
Some of the documentation needed to start the conversation are:
- Non-Disclosure Confidentiality Agreement
- Existing Vendor/Client Contracts
- Employment Agreements
- Profit & Loss Statements
- Balance Sheet
- Corporate Tax Returns
- Accounts Payable Reports
Why Sell to Conversion Pipeline
- Conversion Pipeline has been in business for over 13 years
- We have acquired multiple marketing agencies throughout our 13 years in business.
- Some acquired businesses, the owners have decided to stay on board.
- Flexible buy-out options make coming to a deal easy.
- We understand how important it is for continuity of business operations for employees and clients.
- As a marketing agency ourselves, we respect the brand that you have painstakingly built throughout the years and want to make sure it is upheld to the highest standards throughout this process.
- We have built a network of financial partners that can help with your business valuation.
- We are NOT a business broker who routinely charges 8% – 10% of the selling price. This means more money for the selling agency owner.
- Conversion Pipeline is a marketing agency, so we understand your business, its challenges, and opportunities. In short, we get it.