I speak to a lot of agency owners. When I do, I notice 2 things: The vast majority are lovely people, and they usually fit into 1 of 3 categories…
1. Growers – Most founders I speak to are keen to grow their business and sell at some point (or at least have the option to do so). Helping agency owners to grow is what I do, so I guess it’s only natural that I spend most of my time talking to people that have growth high on their agenda.
2. Lifers – I also come across entrepreneurs with a different mindset though. People who are happy with their business operating at a certain size. They enjoy what they do, they don’t want to get too big. They’re happy with a lifestyle business. No problems here. You don’t have to be big to be a STANDOUT agency.
3. Hopers – Finally, I occasionally meet people that say they want to grow and sell, but who seem to be living in hope rather than doing much about it. They have been plodding along for quite a few years. The business has grown then retracted and then maybe grown again. One thing is always the same…the agency is totally reliant on them.
When I meet the Hopers, I don’t want to shatter their dreams, but I’m always reminded of the phrase “If it’s not scaleable, it’s not saleable.”
If your agency doesn’t meet at least the following basic criteria, why would anybody ever want to buy it from you at an attractive price?
– It has a track record of growth and has reached a significant turnover
– It is sufficiently profitable (when directors remuneration has been fully included in operating expenses)
– It has a proven system for winning new business
– It can operate without the day to day involvement of the founder
– It has retained clients that are contracted to the agency (not friends of the owner)
What other basic requirements for saleability have I missed?
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