Whether you’re planning to sell your firm or simply building your firm “as if” you will eventually sell, understanding your firm’s worth is vital. It can help with several issues — manifest of the many items we review — ranging from creating efficiencies in the day-to-day operation to reducing over-servicing to maximizing the sale price of your firm….
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M&A Articles and Blogs
Putting a Value on Your Firm
What you need to know about Valuation and Term Sheets Are you considering selling your firm? Or maybe you are considering an acquisition. Valuing a PR Agency is an Inexact Science and a complex process. It takes financial expertise, knowledge of the marketplace and an intricate understanding of how buyers create term sheets/offers. Every Valuation…
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Importance of Courtship with Buyer and Seller, then Moving Forward
The first meeting between prospective buyers and sellers is second in importance only to the closing meeting. The first meeting is about chemistry, culture, and fit. There are several crucial issues that need to be resolved early on. 1. 1 + 1 = 3. The fit of the two companies must create a strategic advantage…
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Charging Correctly For Out-Of-Pocket Expenses
When your PR agency buys items or third-party services for a client, the traditional approach has been to bill them to the client separately as “out-of-pocket” expenses. Often, the agency’s direct out-of-pocket expense is increased by 17.65%, to cover the time and services involved in obtaining the item or the third- party service being billed….
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Overcoming an Impasse in M&A Transactions
In an M&A transaction, the ultimate goal should be to resolve any impasse that arises through an approach to negotiate based on the interests of the buyer and seller. You should always be willing to negotiate. You must be willing to sit down with your adversary—preferably face to face—and attempt to make a deal that…
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Managing Your Benchmarks
The key to managing your PR agency to earn a 20% or higher operating profit is to set the correct benchmarks for your key cost and expense categories. To begin, let’s look at some of the basic ratios you’ll want to understand and monitor. How to target your revenue/cost benchmarks: Net Revenue: 100% (Not “Gross”…
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The Keys to Successful Transactions
What is the basis for selecting a merger partner? How do you time the transaction? How do you maximize value? The key is multifaceted. Value Creation Merging Cultures Creating a best-place-to-work environment and culture by maximizing the intellectual and creative capacity of both seller and buyer. Overcome the apparent risks in consolidation and the merging…
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Solid Financial Management Adds to the Value of Your Agency
What is the easiest pathway to maximize value? The answer is simple. Get to the mark of 20 percent operating profit. One proven method for understanding and effectively managing a PR business is using financial benchmarks. Knowing the key ratios and their benchmarks gives management the tools to fine-tune financial operations in order to increase…
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How to Recession-Proof Your Firm
If you’ve been watching the news, reading the papers or listening to the pundits, chances are you may be convinced that we’re already in a recession. My opinion, after a full year of taking the pulse of the industry—via the annual surveys published by Gould+Partners—is that the PR industry will not be facing a recession….
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Good Deals/Great Deals
A ‘good’ deal is when each party feels relatively positive about the outcome. Making each party emerge a winner is the essence of a ‘great’ deal. Often, conceding to the other party what they want will not impact what you want in a material way. I always put myself in the place of the person…
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2022 TRENDS IN PR – MERGERS, ACQUISITIONS AND MORE
All signs point to 2022 being a very good year for public relations agencies. We’ve looked into our crystal ball and predict these trends for 2022. Overall public relations trends Increasing emphasis on DEI (Diversity, Equity, and Inclusion) Customers want brands to take a stand on social and political issues, and clients are responding. PR…
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Knowing What Your PR Firm Is Worth
Valuing PR agencies is a complex process. It takes financial expertise, knowledge of the M&A marketplace and an understanding of how buyers create offers/term sheets. Term Sheets presented by buyers to sellers for the acquisition of the seller firm are customized based on several factors. “Recasted” Operating Profit for the past three full years plus…
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