Do You Want to Sell Your Digital Agency in 3-5 Years?

<p>Is it time to sell your digital agency? Considering a merger or acquisition in the near future? John Burns worked in mergers and acquisitions for 15 years when he realized a gap in the market, specifically for agency owners. So 7 years ago, he started <a href= "https://www.clareadvisors.com/" target="_blank" rel= "noopener">Clare Advisors</a>, a company that provides mergers, acquisitions, and financial advisory services to privately-held digital agencies and companies in the marketing, media, and business services industries. In this interview, John discusses what owners should consider preparing to sell their agencies, the common misconceptions of when to sell, and why now is a good time if you're considering selling in the next three to five years.</p> <ol> <li><strong>What you need to start preparing.</strong> There's a number of factors a buyer would potentially look at in evaluating whether or not they should <a href= "https://jasonswenk.com/selling-your-agency/" target="_blank" rel= "noopener">buy your agency</a>. One of them is profit margin, whether you're consistently making profit and whether your profit is expanding. Also, revenue growth and scalability, since obviously buyers want to buy agencies that are growing and have a lot of momentum. John says the important thing is considering whether you have the infrastructure in place and the right team to grow, over any earn-out or follow-up period.</li> <li><strong>A common misconception.</strong> One of the most common questions John gets is around the target revenue for selling. Whether an agency should be at $10 or $5 million and then sell. “This is a common misconception from owners,” he says because people think the right time to sell is when you’ve topped out at a particular number. Many commonly look to sell a business when their lease is up, and John agrees it could be a factor, so have in mind it may come up. But actually, the right time to sell is when you have the most momentum behind the business and the most wind behind your back. If you’