When you’re faced with the prospect of selling your agency on your own, you may think you don’t want anyone else involved. After all, who knows your business better than you do? But choosing to do it all by yourself (or with just a few key players at the agency) doesn’t merely create extra work for you and the staff. When you’re emotionally wrapped up in your business (no matter how much you may want to sell), it can ultimately lead to bad decisions during a very critical time. See how using an intermediary can take the pressure off of you, and ensure the transition goes as smoothly as possible.
Specialized Knowledge
You know your company inside and out, and the entrepreneurial spirit naturally runs through your blood. But how much do you really know about the details of selling off a company? How well do you understand the negotiation process before you agree on final terms? No matter how skilled you are in normal business transactions, selling an agency is an entirely different ballgame. Intermediaries live and breathe the art of the sale, and you can turn their knowledge into your gain.
Clearer Expectations
There’s what you think your company is worth, what an assessor says that it’s worth, and what a buyer is willing to pay for it. Sometimes these numbers match up, but not always. An intermediary has the experience to help you understand the real market value of your business. Mergers and acquisitions firms use their own professional past plus their databases to get a larger picture of how your business is relevant to the public and to its competitors. Whether or not you over- or underestimated the value of your business, it helps to have a firm footing in reality before you take another step forward.
Better Preparation
Unfortunately, it’s common for agencies that sell on their own to be completely unaware of how they’ll handle the details of the actual sale. A solid exit strategy will help immensely, but it won’t solve all of your problems. Agencies not only point out where the firm can do more to prepare, but they can also give practical advice as to how this can be done. An intermediary may not know your business personally, but they do understand the industry. They can look at everything from your staff size to your revenue before laying out how it can all be used to get the highest possible dollar value for your business.
Objective Services
An intermediary isn’t only going to make decisions based on the bottom line. They’ll ask the right questions that go far beyond finances. Whether you have certain demands about how the staff is treated by the buyer or how business will be handled with your existing clients, an intermediary is there to ensure that your plans go according to plan. However, they’ll also be searching for ways to increase the value of the sale whenever possible. Sometimes owners have a tendency to be too involved in daily operations, and even just a few stray objective observations can reveal potential problems that need to be addressed.
Financial Details
Lenders know what they want, but agencies often aren’t aware of this. When a buyer is offering the exact price you want, an intermediary can help you make any adjustments you need to ensure the deal goes through to the buyer. You can’t control what the other parties do, but you can structure your exit strategy to ensure compliance. The reaction of the lenders is often a good way to gauge exactly how much money you’ll take home. An intermediary can help you figure out how to handle your infrastructure for the benefit of all parties involved.
Tips Before You Hire
Contacting an intermediary and asking for a valuation is generally the first step, and it’s a critical time to assess their skills and dedication. Look for someone responsive and experienced, but also look for intermediaries who have a solid understanding of how the industry and the market work together. They’ll be the ones finding buyers and facilitating the details, so you need professionals who can do the job right!
