How to Raise The Value of Your Marketing Agency Without Raising Revenue

Top-line growth is only one end of the P+L statement. Business 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 business 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 business hacks to raise the value of your marketing agency without the need to raise revenue. 

Five Business Hacks To Raise 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 business 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 business 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 business at this critical juncture? Invest in these individuals and shed any excess weight as you close in on the valuation home stretch and drive up the value of your business. 

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 business 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.


Six Ways A Business Broker Can Help You Sell Your Agency

Are you preparing to sell your marketing agency or PR firm and considering hiring a business broker or M&A advisor? If you have never put a business on the market before, your head will likely be ringing with questions like the following:

  • How does the sales process work?
  • How do I value my agency?
  • How do I identify my ideal buyer?
  • How do I get the word out about the sale?
  • What will it cost me to sell my business?

Once these questions start falling in your mind like rain, you’ll hear a great crack of thunder as a final question strikes you like a bolt of lightning:

“Do I even need a business broker? Why not just take this to market myself?”

Before you decide to put your business up “For Sale by Owner,” you should be clear on the expertise – and dare we say value – a broker brings to the table. After all the work you’ve done to build a business that’s worth selling, you owe it to yourself to make an informed decision.

That’s what this article will do: provide the information you need to decide for yourself. So let’s go for broke (pun gleefully intended) and dive into just what it is that business brokers do.

Valuation

If there’s one thing you should know about valuation, it’s never to take it at face value. There are many paths to determine the market value of your business before you put it up for sale. But not all of them are worth their salt.

Let’s say you’re a service-based business, such as an agency. In that case, a valuation based on the value of your physical assets makes zero sense. Other methods that rely on fuzzy factors such as goodwill can also steer you down the garden path.

The truth is, a business’s value may differ depending on context and the needs and preferences of buyer and seller.

So how do you climb out of the subjectivity hole and get a meaningful valuation? For starters, you can have a chat with an expert on business valuation – your friendly neighborhood business broker.

He or she will likely combine a variety of valuation methods, each of which is weighted and prioritized according to your market, industry, business model, and financials. At Barney, for example, we consider 14 different factors, starting with your year-over-year earnings.

Sound like higher mathematics? It’s really more a cocktail of experience and good sense. However your broker shakes the tumbler, the result will be far more accurate than a valuation based on a single method only.

Do not underestimate the power of accuracy. A listing price that reflects the true value of your business drastically increases your chance of getting a desirable offer from a buyer.

Confidentiality

Do you know the saying “discretion is the better part of valor?”

Actually, the saying is “valor is the better part of discretion.” But let’s leave our Shakespeare at the door and just point out what every business broker knows: discretion is the key to a sweet deal.

If you are selling your business independently, maintaining confidentiality can be challenging. You will face many temptations, from spilling the beans to an employee whose career prospects are dear to you, to being loose-lipped with a vendor, who may leak word of the sale to a competitor.

Pitfalls and pratfalls like this can destroy a deal before it’s sealed.

A business broker knows the value of discretion and the meaning of the word “mum.” He or she will keep your sale strictly confidential and ensure that information is released on a schedule rather than a lark.

Marketing

Selling your business on your own has its attraction. You can take all the credit if the sale goes well, and you get to keep all the money.

However, you might not have factored in the marketing costs and resources that a successful business sale requires.

From email campaigns to direct mailing, online advertising, social media marketing and word of mouth, the marketing muscle you will need to flex to receive your desired asking price can be massive. If you’re not careful, you’ll find yourself feeling the burn.

This is where a broker can be a lifesaver. A seasoned business broker has access to networks of buyers and databases beyond your wildest dreams.

Tapping into a broker’s marketing capabilities can save you time, energy, and money. It can also help you reach your ideal buyer. That means a better deal and a better night’s sleep.

Negotiation

Is negotiating with lawyers your idea of fun? Then by all means, go it alone when selling your business.

However, if you prefer to outsource legal wrangling to those who know the rules and regulations and can handle smooth-talking attorneys, a business broker is the way to go.

That’s right – we said attorneys. Often you’ll be dealing with more than one. A business broker knows the ropes and won’t get rattled when the buyer’s and seller’s attorneys go head to head.

Another legal area in which a business broker can make your life easier is lease negotiation. If a buyer needs a new lease for your business location and you botch the discussion with the landlord, the deal could fall apart.

In such cases, having a broker handle the negotiation can give you a new lease on life (yes, we own that pun, too).

Financing

Speaking of puns, you can bank on a business broker to have solid banking contacts. If your buyer needs financing to purchase your business, using the wrong lender can cost you months and imperil the sale.

Brokers are well versed in which lending sources to tap for which transaction and spend their careers building reliable contacts in the world of finance.

You may be great at financing a business. But this knowledge won’t always apply to your buyer’s situation. A broker will know exactly who to call – and how to make, not break, the deal at hand.

Emotional Support

Last but not least, taking a business to market is an emotional roller coaster ride. There’s more at stake here than when you’re selling your tamagotchi collection (and that’s saying something).

When emotions get high – be it during legal haggling or at the closing table, a business broker can provide perspective, empathy, and support. Whatever issue you encounter, your broker has been there before and can guide you through the haze.

That can’t just get you to a sale. It can keep you out of the looney bin.

That’s a Wrap!

Now that you know what a business broker does, you should have a good grasp of the advantages of working with one. We’re happy to offer more reasons – or to help you sell your business. So don’t be a stranger, hear? Connect with us 🙂


Sell Your Agency By Shifting Your Mindset


If you're trying to sell your agency, you’ve met them by now: those potential buyers who have dollar signs for eyes, calculators for hearts, and bank vaults for souls.

You’re not the judgmental type. You’re out to get the most value for your company and you’ll give the highest bidder the benefit of the doubt. But this type of prospect rubs you the wrong way.

Read more