If you’ve ever considered selling your public relations firm, even if it’s far in the future, you likely have a lot of questions about the process. At Gould+Partners, we specialize in public relations agency mergers and acquisitions (M&A) and provide PR firm valuations, benchmarking analysis and reports, and a proprietary Build to Sell Program for agencies interested in readying their business for sale.
To help take some of the mystery out of agency M&A, we’ve compiled six of the most frequently asked questions from PR firms who have contemplated selling, and provided our expert answers below.
When is the best time to sell my PR agency?
The best time to sell your agency depends on a combination of factors, including your agency’s financial health, industry growth, and your personal readiness. You don’t want to rush into a sale, but you also don’t wait too long if your agency is performing well and the market is favorable. In general, the ideal time to sell is when your agency is financially strong and the market you serve is expanding.
How long will it take to sell my public relations agency?
The sales process typically takes nine months from start to finish, but readying your agency to sell is a separate process that we typically recommend you start at least three years before you intend to sell in order to maximize your agency’s value and ensure a smooth sale.
When should I start preparing my agency to sell?
We frequently tell our clients that they should manage their firm as if they’re getting ready to sell, even when a sale is not in the immediate future. The truth is, it’s never too early to get your agency “sale ready”. That’s because learning how to improve billing and utilization, and reduce overservicing and operational costs – among other things – doesn’t just increase your long-term valuation, it increases your success and profitability in the short-term, as well.
How do I know if my public relations agency is ready to sell?
There are many operational areas that need to be closely examined to determine readiness for sale, including:
- Accounting & Finance – Is your firm profitable? Are your firm’s financials well-maintained, and prepared by a reputable accounting firm?
- Human Resources & Compliance – Is your firm fully compliant with federal and state regulations for managing its workforce? Do you have a succession plan in place?
- Client Engagement & Management – Are your client contracts well written, with defined terms and durations? Are there protections for early cancellations and solicitation of employees?
- New Business Development & Marketing – How strong is your new business development engine? Do you have a strong brand and marketing campaign?
These are just a few of the areas you’ll need to evaluate when determining whether your PR agency is ready to sell.
How do I put a succession plan in place?
To implement a succession plan, you’ll need to identify existing staff who could become your successor, if given the proper development, and then create and implement a strong development plan. If those people don’t exist, hiring new talent to be groomed as a successor, and putting a development plan in place to get them ready, can also accomplish it.
How can I build my PR agency to sell?
To maximize your agency’s value, you’ll want to focus on improving your financials, building a strong client portfolio, sustaining a talented team, and strengthening your brand. To help PR agencies like you through this complex process, Gould+Partners has created the Build To Sell Program. When you sign up for this proprietary coaching program, we’ll help you fine-tune the keys to profitability and valuation, as well as educate you about exit planning and the M&A process.
If you are interested in learning more about our Build to Sell Program, give us a call at 917-783-4500 or contact us online.