Tips To Sell A PR Agency For Top Dollar

Sell A PR Agency For The Best Price

You founded your PR agency, took the time to grow it, and now are reaping its benefits, but the time will eventually come for you to sell it. Maybe you’re at the top and are ready to strike while the iron is hot, or maybe you’re ready to join forces with a larger agency. Regardless, there are a few things you should do while you’re embarking upon the exit process. These tips for selling a PR agency will help you get top dollar for your firm.

1 – Streamline, Organize & Document Everything

Before selling a PR agency, take some time to streamline your systems to reduce waste, organize the company’s technology assets (like a CRM) and optimize your organizational and personnel structure. Think about your firm as if you were out of the picture…would it survive? If not, what can you do to make sure the walls don’t crumble if you’re gone? If you don’t already have thorough documentation of the ins and outs of your firm’s processes for key areas of the business, this is the right time to get those in place. Sophisticated buyers willing to pay top dollar for your PR firm will want to see a well-oiled machine that has proven systems and processes implemented company-wide.

2 – Make Your Biz Dev Process A Well-Oiled Machine

Business development is a really big deal to buyers! Given that most PR firms don’t have a lot (or any) collateral assets, a lot of the “secret sauce” lies in the way the firm gets new business. Do whatever you can to systemize this process, ideally in a way that doesn’t center around you. Even if you’re looking for a strategic buyer that will keep you on board for several years post transaction, buyer still want to see a clear business development process that operates without the founder leading the charge.

3 – Get Better Contracts

PR firms with long-standing, fool proof contracts sell for a significantly higher multiple than those that are project based. Often times, PR firms or agencies specializing in corporate communications have retainers in place with their clients (good!) but they have a simple 30-day out clause. Buyers like to see strong contracts that can be transferred over to the buying entity at close.

4 – Get Your Financials In Order

You need to have an accurate picture of your financials in order to sell your PR firm for the best price. Seems obvious right? In order to convince a buyer your firm is the right purchase for them, you need to know exactly what is coming in and out each month. Now is the time to take your mother-in-law off payroll and remove your business credit card from your Amazon account. For larger agencies, try to put non-revenue producing line-items (like labor for R&D) as a standalone line item on your P&L so buyers can easily add these back into their financial calculations.

5 – Find A Quality M&A Advisor To Sell Your PR Firm

Many buyers of PR firms are going to be large marketing agencies looking to acquire a strategic bolt-on that specializes in corporate communications. These buyers will understand the cross-sell opportunities available to them on day 1 and will appreciate the holistic approach to client services that PR firms generally undertake. Using an advisor who understands this dynamic is crucial. This could be the difference between selling your PR Firm for the best price and not.

A quality advisor who understands your niche and industry (this is key) will be able to give you an accurate valuation, produce professionally designed marketing materials and most importantly, tap into their network of ready-to-go buyers. A great advisor will be worth their weight in gold at the end of this process and will absolutely help you sell your digital agency for the best price. If you need to connect with us, you can do that here.

6 – Figure Out What Your PR Firm Is Worth

Now that you have a clear understanding of where your company stands financially, it’s time to give it a valuation. A PR firm is only worth what the market is willing to pay for it, but there are some tried and true factors that go into a successful valuation. The firm’s revenue & profits, operational structure, years in business, supporting technology, growth opportunities and the current buyer pool are just a few of the factors that go into determining a valuation of a business. This is where it gets a bit tricky, and a good advisor is going to have unparalleled knowledge to price your PR firm just right to sell. (We can help, schedule an intro call here).

7 – Build Relationships With Seasoned Buyers (Or Hire Someone Who Already Has Them)

Unsurprising news flash – existing relationships with a pool of seasoned buyers is still the absolute best way to sell your PR firm for the best price.

If you’re using a business broker or M&A advisor, make sure to ask about their existing relationships with buyers in the marketing and agency space. They should have solid, and long-standing relationships with seasoned entrepreneurs and strategic buyers who are always on the lookout for their next opportunity. At Merge, over 80% of the Public Relations firms we sell get sold to an existing buyer in our database. We can’t stress this enough – these relationships are crucial!

In Conclusion…

If you decide to start and eventually sell an agency, there are things you can (and should) do to help prepare your agency for an exit. We can act as a resource along the way, don’t hesitate to reach out with questions! Connect with us when you’re ready!