If you’ve owned a public relations firm for several years and have decided that it’s time to take that first step in your planned exit strategy of selling the firm, you may have questions regarding what your next steps will/should be.
The next steps you should think through as you move to sell your public relations agency are:
1. Determine your true reasons for wanting to sell. Are you burned out? Do you want to hand the reigns over to a family member or partner(s)? Do you want to retain any ownership of the firm at all, or do you want to sell it in its entirety? These are important questions to answer because any buyer will want to know – and deserves to know – your reasons for selling the agency.
2. Do you know your bottom line? If not, you have some work to do because this is a sign that you are not currently running your agency as a real business. You may service your customers well, but if you’re don’t know exactly where your profits are coming from and where/how you are investing it, it’s not a business and potential buyers will see that.
3. If you haven’t been embracing your firm’s financial profile against industry benchmarks, as you move toward selling your agency, it’s time to do so. If necessary bring in a business consultant who can go over these metrics with you. He/she will look at things such as: are you overstaffed? Are you under- or over-servicing your clients? The consultant will help you develop metrics that will ascertain how profitable – or not – each account is. The consultant will determine how many billable hours each of your team members need to report in order to justify their salary and will work with you to analyze the “why” regarding the poor performers.
4. You need to determine where your firm is in regards to its health. And you must be brutally honest with yourself about this! Is your firm going through hard times, you’re burned out and you’d be willing to unload in a “fire sale?” Or are things going exceptionally well and you believe you can receive top dollar; or somewhere in between?
5. If you’ve decided that you will not be selling to family members or partners, you will need to determine how strong the members of your management team are. Outside buyers will want to be sure the team left after you leave is a strong one so that they can help manage the ownership and client transition. Making sure your second tier of management is exceptionally strong is especially important if you, as the owner, have directed your company without a lot of C-level input. If this is your case, you need to start training your management team in leading your company. If you feel they cannot, it’s time to do that which must be done and either fire them and hire those who can lead your firm, or hire people above them who can take control.
The decision to sell your firm can’t be one you make on the spur of the moment. You must consider all angles carefully and we recommend that you start the process of ensuring that your firm is ready to sell well before your desired sale date.