Stock Sale VS Asset Sale
Not All Sales Are Created Equal: Stock Sale vs Asset Sale
The best-sellers are informed sellers. Knowing your options and what they entail before they require you to act is both smart and efficient. It will save you time and headaches when the moment arrives to have a mental image in mind of what each separate transactional avenue – the stock sale vs asset sale – could mean for your business, for you, and for your buyer.
In a stock sale, all the items on the books of a company and all existing contractual agreements are left untouched. From asset amortization to zero-layoff policies, this type of sale is merely a matter of moving all the equity to a new owner while the entity itself remains just as before.
An asset sale, on the other hand, requires the itemization of all assets of the business followed by a transfer of the assets to a buyer’s new company that will then be the new owner of these current assets. The typical assets this will include are licenses, goodwill and equipment, above all. Typically, an asset sale will be cash-free and also debt-free, retaining the debt obligations in the existing entity.
Lock, Stock, and Barrel
The stock purchase option means going all in – all current assets and liabilities included. While the asset sale will enable a buyer to take a buffet approach, the stock purchase is very much the fixed menu, wine pairing included. That usually makes for the more straightforward deal, even if it can entail additional due diligence since no itemization takes place that would exclude certain assets from consideration. In other words, the stock sale has the advantage of bypassing the time-consuming re-evaluations and reassignments of a potentially long list of assets to be transferred. However, in most cases, this process is worth the effort for a buyer and trumps the stock sale. Here’s why.
Stock Sale vs Asset Sale: Goodwill Hunting
Buyers are keen on individual assets because they get to mark up assets in line with their fair market value once they have been transferred. This enables a buyer to depreciate them again as opposed to acquiring their existing depreciation on the books when purchasing equity. In addition, buyers can gain a significant tax advantage from year one in an asset sale by amortizing goodwill – the value paid in excess of the cost of tangible assets. So, while goodwill is not tax-deductible in a stock sale, it can be tax-amortized over 15 years in an asset sale. Particularly in the agency space, where businesses thrive on intangibles such as client lists, this can make all the difference on the books of a new entity.
Limited Liability?
The upsides of selective asset purchasing while skillfully transposing these onto a buyer’s books may make the asset sale appear more seamless than it actually is. In reality, things can get choppy even when the transfer of liabilities is kept in check. Existing contracts moving to a new entity will likely need to be renegotiated, for example. This can apply to client contracts as much as it can apply to employment agreements. So, while the liabilities on the books may seem manageable, business continuity itself may come into question more easily with an asset sale. It’s also worth remembering, from a seller’s perspective, that since un-purchased assets and liabilities don’t just disappear, a seller will be left to clear these, over time.
Getting Your Assets in Gear
When it comes to stock sale vs asset sale, generally speaking, sellers want to sell stock and buyers want to buy assets. Avoiding costly backtracking that can also reduce credibility when negotiating can be accomplished by getting a head start on what’s to come. Getting divergent interests aligned and making a seller aware of the scenarios at play is part of the job of a seasoned M&A expert. Ultimately, understanding the consequences of each sale option before putting a deal together will help ensure a smoother transaction and line up a win-win outcome. Knowing your asset sale from your stock sale will also allow you to ready your accounting and ensure you get things done by the book.
Here's Why You Should Consider Phantom Equity When Selling Your Agency
The Very Real Promise of Phantom Equity
The terminology may frighten some away. But phantom equity, especially when it comes to selling your agency, has the potential to breathe new life into your agency. The upsides are well worth taking the time to ensure that phantom equity is anything but elusive to you. Make phantom equity work to your advantage by using it as the adhesive that binds essential human capital to your agency long-term, especially post-sale, promising profit shares in return.
What Is Phantom Equity and Why Does It Matter When Selling Your Agency?
Phantom equity is both equity and not equity. It offers the benefits of company stock without actually issuing any. Known also as “phantom stock” or “virtual shares”, they offer deferred compensation in line with company performance much like actual stock would. And much like actual stock, this equity will vest over time and according to an agreed schedule. However, unlike actual stock, phantom equity never offers the opportunity to exercise a voting right; they are financial-only. This means holders of phantom equity don’t sit on the cap table, carry no liability and, as such, pose practically no added legal requirements or costs to get set up as phantom stockholders.
Should I Take Advantage of Phantom Equity When Selling My Agency?
If you are considering selling your agency and you’re an owner who is looking to stay on long-term, phantom equity makes perfect sense. Phantom equity ensures that a founder – or any other essential team member for that matter – stays on, stays committed and stays a part of the continued growth story even after a sale and post-sale transition period have been completed. Offering phantom stock in the business post-transaction offers an objective guarantee, aligning buyer and seller incentives for continued success.
After all, human capital is the key component to the business that was just acquired. Keeping the engine room of an agency firing on all cylinders means binding that human capital to the agency’s continuing journey down the growth path. Especially when the agency is a smaller business – approximately 15 people or fewer – the value of each team member tends to be magnified. Binding essential team members to the long-run success can be a sure-fire win-win.
When Does it Make Sense to Avoid Phantom Equity?
If you are looking at selling your agency but do not plan to stick around for the long haul once your agency has been sold, then phantom equity may not be for you. Even a full year of commitment post-sale is not in alignment with the purpose and likely vesting schedule of phantom equity. Generally speaking, it takes a minimum of a three-year commitment for phantom equity to really begin to pay off.
In addition, if a buyer only wants to incentivize team members that stick around for an agreed minimum period that extends beyond the start of the vesting schedule, they may want to consider a cash bonus plan instead. The reason here is that these are generally forfeited altogether when an employee leaves whereas the vested phantom equity could mean having to pay out somebody who left sooner than a buyer might have liked.
The Bottom Line
The initial post-sale transition period of, on average, 90 days is tied into every deal. What happens beyond that is down to the interests and alignment of seller and buyer. If the interest is there for a seller to stay on board long-term and keep reaping the benefits of an agency’s ongoing growth story, the direct path to participating in the profits to come, is phantom equity.
Flexibility Is The Key To Sell Your Digital Agency
Selling Your Digital Agency? Why an Owner’s Flexibility is Key to Sealing a Deal
When you are looking to sell your digital agency, negotiating the sale will take time. That time will require more than just patiently waiting on the sidelines. It will require a back and forth that will see most owners giving way at some point, be it with regards to the selling price, payout terms, or the time it takes to complete a deal. Staying focused on the goal of completing the deal – rather than staying focused on a timeline or a price tag – will help ensure a successful transaction.
Your Transaction Doesn’t Live in a Silo
As promising as the performance metrics on the books may look, the growth trajectory of your agency is taking place in a complex environment comprised of many players. There will always be a market reality outside of your agency. And a buyer scanning the market will be well aware of this reality. It’s important to show you understand this in practical terms by adjusting deal terms and pricing in line with what the market suggests is feasible.
Your Agency Has More Than One Type of Buyer
While you may have your mindset on a specific type of buyer, market shifts mean that not only are price and deal terms a dynamic part of the equation, but the buyer type continues to evolve as well. Larger agencies looking to acquire your client portfolio may have been a classic buyer type in the past, but they are far from the only one nowadays.
Solo-preneurs, in particular, have reshuffled the deck. These high-net-worth experts are sitting at a corporate job or a large agency and are looking to apply their know-how and their network to scaling something they don’t have to build from the ground up. Keep an open mind as to who will be steering the ship following your departure and you will be sure to up your shot at getting the deal done.
Take It One Step at a Time To Sell Your Digital Agency
Flexibility won’t go far if you don’t have a healthy dose of patience when you go to sell your digital agency. Keep a leveled head as negotiations inch forward and continue to be calm post-transaction as well. Staying flexible with respect to how long you will be needed after the date of a transaction will help ensure smooth sailings beyond the moment of signing. Putting in the bare minimum of just 30 days to cash out fast is never recommended. A 90-day minimum that is ideally extended into the range of 6-12 months is optimal to make sure all parties’ best interests have been served.
One Step at a Time
An agency sale is not complete on the occasion of signing the deal. It’s important to understand what happens in the run-up and the post-sale and what sort of attitude can help all involved feel like they’ve hit a home run. Just like a solid workout demands a warm-up and a cool-down, no transaction is complete without buyer scoping, due diligence and transition period in the stages before and after a sale. And just like that workout, your sale will fall into place one step at a time. Staying flexible along the way means that you will be prepared for what the process will inevitably throw at you – and ensure sure that you’ll be there to answer the door when opportunity knocks. Ready To Sell?
M&A Transaction Tips: How To Ace An Intro Call With A Buyer
You’ve done your research, prepped your financial materials, honed your elevator pitch, and now it’s time to connect with a potential buyer! Meeting prospective buyers is an exciting part of an M&A transaction, but it requires thoughtful preparation in order to ensure a productive conversation for both parties. Use these tips below as a checklist before preparing for your next call.
M&A Transaction Checklist: Buyer Intro Call
- Minimize Distractions: It seems obvious, but find a quiet place with a good internet connection. If you work from home, buyers understand some limitations, but eliminating distractions and noise will help you make the most of your time! Ensure that your background and surrounding environment look professional.
- Leave a Lasting Impression: Enter the conversation with an infectious, positive attitude, and let your personality shine through! Buyers want to connect with you as a person and potential professional collaborator, not just a business entity. So, lead with charisma during the call to leave a lasting impression that resonates.
- Dive into the Details: A little research can go a long way. By demonstrating your knowledge and enthusiasm, you'll captivate the buyer and create a compelling case for collaboration. Make sure you know who will be on the call and what their role is specifically within the organization.
- Harness the Power of Preparedness: Arm yourself with essential documents that hold the key to success. From crucial financial metrics to client data and team information, ensure you have everything at your fingertips. Your M&A advisor can lend a hand in ensuring you're well-prepared to answer the buyer's inquiries and follow up after the call to close the loop on anything that you were unable to answer.
- Curiosity Fuels Success: Similar to a job interview, the buyer will likely set aside 10-15 minutes at the end of the call for your questions. So, before the call, brainstorm the information you'll need to make an informed and assured decision for your business. Your thoughtful queries will demonstrate your dedication to facilitating a successful M&A transaction.
- Active Listening: During the call, actively listen to the buyer's needs and concerns. Show genuine interest and empathy, and ask open-ended questions to encourage them to share more information. Remember, this is more than an M&A transaction you're trying to close, it's a relationship you're fostering. By staying engaged, you'll be able to customize your pitch and recommendations to precisely match their unique requirements.
- Overcome Objections: Equip yourself to gracefully handle objections or points of concern. Rather than brushing them off, embrace objections as stepping stones to provide thoughtful responses that ease concerns. Utilize persuasive techniques, such as presenting compelling evidence or sharing glowing client testimonials. These approaches will instill confidence in a buyer's decision to proceed in an M&A transaction with you.
- Reflection: Take time after the call to summarize your thoughts while they are fresh in your mind! Be sure to note the aspects of the conversation that you enjoyed and anything that gave you pause or concern. Share these takeaways with other key players, such as your M&A advisor, and be sure to get their feedback on the conversation as well.
Most importantly, remember to keep an open mind during any conversation with a potential buyer! Sometimes the conversation can take a turn that surprises you and lead to an incredible future partnership.
5 Terms To Know Throughout The M&A Process
The M&A process can be a transformative opportunity to increase market share, drive operational efficiencies, and unlock growth opportunities. However, embarking on this journey requires more than just ambition. Having a clear understanding of the process and key terms used in the space allows for informed decision-making to drive a successful transaction.
Key Terms To Know Throughout the M&A Process
EBITDA: The abbreviation for Earnings before Interest, Taxes, Depreciation, and Amortization; a calculation used to express cash profit. Essentially, this is your net profit plus additional expense adjustments that a prospective Buyer would not incur. When valuing an agency, Barney utilizes a multiple of EBITDA to determine your agency's total enterprise value.
Letter of Intent: A non-binding letter that outlines an introductory commitment to do business with another entity. The LOI serves as the blueprint for the transaction between two parties and defines the purchase price, structure, and deal terms. The Barney acquisition team will help guide you through these offer letters and negotiate the most ideal terms on your behalf.
Deal Structure: The financial terms, conditions, and obligations of both the buyer and seller to guide a smooth transition of business ownership. The funding mechanisms outlined in a deal structure are the buyer's tool to “bridge a valuation” gap between the total enterprise value and the available cash they have on hand. Most deal structures will include some combination of the following components - cash at close, seller’s financing, earnout, rolled equity, and phantom equity. Barney’s role is to advocate for your preferred deal structure which usually includes the highest amount of “guaranteed funds” - cash at close and seller’s financing.
Working Capital: The difference between an entity’s current assets and current liabilities; overall the amount of money needed to run the day-to-day operations of a business. Buyers will typically ask for 2-3 months of operating income post-transaction so that the ownership transition does not hinder business operations. Barney will help guide you through all of these house-cleaning steps at the end of the due diligence process.
Earnout: This is the potential portion of the purchase price where payment is contingent upon the company achieving predefined milestones within a set period of time following the transaction. Typically, performance metrics tied to top-line revenue are more advantageous for a seller than those tied to EBITDA. The Barney acquisition team will ensure you are well-informed regarding the obligations of any proposed earnout period and advocate for terms that align with your financial projections and transition timeline.
The M&A process doesn’t have to be daunting! With guidance, advocacy and support from a qualified advisor, it can be an exciting opportunity to launch an agency and its founder into a new chapter of opportunity.
Optimizing Agency Accounting With Fractional CFO Services
Running an agency requires you to be intimately involved in the day-to-day operations and pulled in many directions. A fractional CFO is able to provide assistance on both the intimate details of financial reporting and accounting, as well as advisory and guidance on the overall strategy and direction of the business. This dual perspective is invaluable during the acquisition process to a) set you up for success in regards to having all of the necessary financial documents ticked and tied and b) to consider the big picture implications as you prepare to sell your business.
Four Ways Agency Accounting Benefits From Fractional CFO Services
Cost
The cost of hiring a fractional CFO is significantly cheaper than the salary of a full-time CFO. Your agency accounting efforts will benefit from the financial expertise of an experienced CFO without the commitment and strain of a full-time employee. Buyers want to see clean books and records, so investing in this prior to starting the acquisition process inevitably saves time and headaches during the due diligence process.
Specialized Experience
Problem solving is an invaluable skill in the management of a small-business. A fractional CFO not only provides financial acumen and streamlined agency accounting, but extensive experience identifying issues and implementing processes to solve them. It’s important to identify an individual who has experience with agencies of comparable size to yours, as well as industry experience.
Flexibility
The advantage of a fractional CFO is that their involvement can be tailored to the level of attention your agency accounting efforts require. In the case of preparing for a sale, this person can be utilized to ensure all of the necessary financials, including balance sheets and P&L’s, are prepared with the appropriate amount of detail. Having the ability to quickly pull various financial documents as potential buyers request them, helps to streamline the process and keep momentum.
Perspective
If your agency accounting efforts need enhancing, a fractional CFO can provide experienced counsel and a fresh perspective which can help optimize processes to make them more efficient and cost effective. Having clear systems in place is very valuable to prospective buyers and signals that the agency can run independently of any individual. While the process of selling your business may be confidential, it’s helpful to have another executive who is aware of the sale and can provide support and financial information as needed.
Take Action
Maintaining clean, cohesive, and organized financial statements are crucial to a successful sale of your business. Hiring a fractional CFO to guide your agency before and during the process is an effective use of time and resources to ensure a smooth exit.
How to Grow The Value Of Your Marketing Agency Without Raising Revenue
Top-line growth is only one end of the P&L statement. Agency owners that are not just sales-minded but understand operations just as well, know that their margins can be improved elsewhere too. Although an early-stage agency will need revenue to demonstrate traction and proof of concept, a company with enough track record – and one that is looking to sell – needs to do better than that. EBITDA will take center stage for a buyer looking under your financial hood – and there is plenty of ways to raise the roof on your EBITDA without having to drive sales. Especially in the current market environment that is still demonstrably shaken up by the ongoing pandemic, structural readjustments and remote work are redefining operations. If you are looking to drive up your bottom line as you line up a sale, we recommend you take a closer look at our five hacks to grow the value of your marketing agency without the need to raise revenue.
Five Hacks To Grow The Value of Your Marketing Agency
The Roof Overhead is an Overhead
Office leases, in particular, are dead weight in the current market environment. Long leases are not integral to the business of most marketing agencies – something that is especially obvious since 2020 and the proof of remote work as a key component of agencies in the digital age. As tools to work remotely become smarter and employees become more accustomed to them, it is worth reconsidering if that office lease or that prestigious address on the business card are worth their costs. No less, co-working spaces, insofar as they are open for business, offer a smart and flexible alternative. Why not survey your team to see how many days a week they would be happy working remotely and scale down accordingly?
Automate Where You Can
Automation and streamlining are essential ingredients to your margin improvement. Revisit your processes, workflows and operational architecture to check on where there is still room for automation improvements. Tasks that should raise the automation flag include tasks that involve compliance and audit trails, that require multiple people to execute or that are especially time-sensitive.
From invoice generation to time tracking and from automated workflows to streamlined communication through project management tools with automated notifications, the world of process automation is yours for the taking. Things to keep in mind are that no tool is a cure-all and any tool is only as good as its implementation. Set goals, assign accountability and measure your results over time. Your reduced likelihood of error and improved productivity will work its way into your margins in the medium to long term.
Improve Your Brand & Increase Prices
When was the last time your brand got a shake-up? Are your website and your logo still a little too close to when you first launched? It shouldn’t take a Fortune 500 company in the public eye to make rebranding relevant. Give your look and feel a lift that will strengthen your positioning as you gear up a sale – and that can help you justify giving your prices a lift along the way.
Invest In Your Team
Most importantly, take a good look at your team. They will be the ones carrying your agency not only over – but past – the finish line as you execute on a potential exit. Who are the top-tier candidates that will shoulder your agency and drive the marketing agency at this critical juncture? Invest in these individuals and shed any excess weight as you close in on the valuation home stretch and grow the value of your marketing agency.
Future-Proofing In Times of Crisis
It may be a cliché, but that doesn’t mean it’s not worth taking note: there is opportunity in crisis. Even if you are not looking to make a sale just yet, these are things you can do to improve your operational resilience. Take advantage of the current reshuffle. Let it serve as an eye-opener as to how to cut costs and restructure your agency to help bring the value of your marketing agency to where it needs to be so you can turn it into a listing no buyer would overlook.
M&A Timelines: How Long Does It Take To Sell My Marketing Agency?
When you finally say to yourself, I want to sell my marketing agency, you may think that things will move quickly. But the reality is that the waiting can be long and is often the hardest part. Normally – the Barney M&A timeline in its entirety is 4-6 months.
However, knowing exactly what happens before, during, and after a sale should provide the transparency you need to help you manage the process. Below, we help you understand the necessary steps – and the expected timeline attached to each of them – so that you can get a clear understanding of how long it takes to sell your marketing agency.
Sanity Check
First things first. Before you jump into the deep end and run the risk of amping up the expectations, you may want to ensure that you are ready to sell in the first place. Has your agency been showing sustainable growth year-over-year? Are your margins raising eyebrows or just red flags? Are you delivering an EBITDA of $500k and up?
The M&A Timeline to Triumph
While there is some flexibility around the exact duration of each element required to make the sale of your agency a success, the process that will take you there is very defined. The Barney M&A process in its entirety is 4-6 months. Here is the step-by-step:
- Initially, there is a valuation period before any agency owner enters the circle of sellers. This period requires the vetting of financials to get an accurate picture of what’s on offer. Once a price is agreed upon, the listing agreement is prepped and signed before a listing goes live. Expect this readying stage to take up to 1 week.
- Once your listing is live, it’s showtime! We do our homework to identify your perfect buyer profile before we scour our network to identify potential prospects. We give this stage a solid month to generate enough leads in order to begin issuing a first term sheet.
- Once there is a genuine offer in place, expect a further two weeks to transform those initial leads into a detailed LOI.
- Finally, turning a serious buyer’s intention into a closed deal will take…well, it will take the time it takes, really. The due diligence timeline is correlated with a buyer’s thoroughness and a seller’s previous processes. As a benchmark, we attach an expected duration of 45-90 days – but that can move in either direction. Expect to be able to improve on this timeline with more sophisticated buyers that have gone through this before. In addition, the required paperwork to close a deal will be produced during this 45-day window, which takes into account a small buffer for the required back and forth.
M&A Timelines Vary
Depending on the buyer’s experience and buyer type, the pace of the process can move in either direction as well. Strategic buyers with an eye for an operational fit will typically move faster while entrepreneurial types will take more time as they are likely entertaining more options. Financial buyers will put their targets through a Quality of Earnings report (think of this like a mini-audit), which can add another 3-5 weeks to the process.
Beyond getting the alignment right, which is something out of a seller’s hands, a seller can help shorten the M&A timeline as well. If a buyer and seller remain in agreement with the initial closing docs, and if a seller is well-organized and on top of his operations and financials during the due diligence process, this will help drive up confidence and drive down duration.
Understanding The M&A Timeline For Digital Agenices
Think Like A Buyer When Evaluating Your Digital Marketing Agency
Did someone say, “seller’s market”? Yes, indeed, we did. Now, does that mean your agency is automatically at the top of every potential buyer’s list? Unfortunately, not. Or, “thankfully not”, is what we ought to be saying since making the right kind of match happen is where long-term success rests. In other words, long-term success is about making sure that you don’t even begin the buyer-seller dance with buyers who aren’t suited for your offering. So, how can you make sure that there is an alignment of offer and potential buyer, how can you improve your digital agencies valuation, and finally, does your agency offer what a buyer wants?
Think Like A Buyer When Evaluating Your Digital Marketing Agency
We’ve put together a list of key items that will entice just about any agency buyer, and that an agency owner can consider as transactional glue on their way to seal the deal.
Retainers Over Projects: Retainers spell income visibility. Projects, while potentially lucrative in the short term, also spell potential volatility. To keep them coming in, the required sales effort and associated costs add to the challenge of making a dependency on projects look like an attractive prospect. Of course, a mix of both is not in and of itself unattractive, but keep the balance solidly tilted on the retainer side. Pay special attention, all you SEO and PPC agencies, as this speaks directly to your business model.
Year-Over-Year Growth: This isn’t Silicon Valley, and your agency is not a SaaS startup. Agency buyers are not the VC types looking for triple-digit percentages growth. Steady does it – because steady growth means managed growth. It means your growth was not part of a fad or a fluke. And it means that your growth is not only sustainable but responsible. Growth is not an isolated metric; it’s tied to everything from hiring and overheads to your value proposition and your sales cycle. When all these things are in line, your year-on-year growth will be a sign of stability, skill and success.
Sustainable Margins: In line with this kind of well-managed growth, come sustainable and reasonable margins. Reasonable because repeatable. No buyer wants one-off success. Buyers are looking for structured businesses, not side gigs. That means functioning operations and an engine room that keeps churning out an EBITDA of 20-35% – with some margin for crisis-based deviation.
Processes Over Relationships: Processes mean success is business-owned and won’t leave the business as an owner takes their final bow. Success that is tied up in specific relationships, is not transferable – and not repeatable. Think of it this way: can a new owner, with the same skills as the current one, continue to scale your agency? That’s your litmus test right there.
Challenge Yourself to a Pre-Mortem and Improve Your Digital Agency Value
There are plenty of buyers available on the market right now, so that won’t be where the failure to sell your agency lies, so challenge yourself to this pre-mortem scenario: it’s 6 months from today and you weren’t successful in finding a buyer in spite of actively trying to sell your agency. What did you do wrong? Turn our buyer’s wish list into your seller’s checklist to improve your digital agency value and make sure your agency’s offering is aligned with what buyers are after.
Why Honesty Is Essential When Selling An Agency
Are you selling an agency? There is one thing above all else that you can do as an agency owner to help make the sale of your agency, and the ensuing transition period, as smooth as Sunday morning jazz: Be Honest. A serious buyer will always do their homework – and a minimum 45-day due diligence period is guaranteed to reveal anything they weren’t able to uncover upfront. Better still, find out what is of particular importance to a buyer so you can be transparent about those key issues in particular. Not entirely sure what those are? We have a pretty good idea.
Selling An Agency Rule #1: No Surprises
Align your communication with your true intentions once you are no longer at the helm. If your aim is to keep the transition short, don’t communicate that you will be available for the long haul after the sale to try and get the deal done. Adapting the transition period to how long an agency owner will be around is crucial to make sure the necessary ground is covered. If you are unsure about the ins and outs of the transition period, you can read our piece on that here.
The same goes for what you plan to do once you have walked away. If you plan to start a new agency, you will need to put a workable non-compete agreement in place first. It’s not unlikely that a new agency could be your next move, after all. You have the founder’s DNA inside you and have lived and breathed marketing in some form or other for years. Of course, it’s only tempting for an alternative next move to be early retirement and more time spent with your growing guitar collection, but if what you’re going to do is start a new agency, start on the right foot.
A further point to be clear on is the role of employees and where the client relationships sit. If owners are essential to maintaining these, this needs to be addressed. Buyers will typically interview senior employees to get the low-down anyway, so all the more reason to be upfront about relevant roles and relationships. An agency’s employees will be the ones staying on to deal with anything that was not handed over cleanly and openly. Just one more reason to keep all the stakeholders – and not just the one shareholder – top of mind when communicating your sale.
Managing Expectations
Like with any other transaction and business relationship, success lies in the alignment of the objective value of an asset and the perceived value. In other words, managing expectations is the key to making an agency sale a win-win. There are enough buyers for every type of agency so making the right match based on the facts of the business will be the key to making your sale a success for all involved.