Clare Advisors Releases Guide on Why Businesses Should Plan Their Sale Years in Advance
Each deal is different, as the typical earnout takes between three to five years in the advertising and marketing industry. Depending on what type of sale the owner decides to do, it can take up to a year to move through a full sale process.
Many business owners will need to stay on post-closing to ensure a smooth transition and act as a consultant. An agency owner's exact time to stay on is typically an agreed-upon period to ensure the operations, finances, and culture are correctly organized.
If a business owner has an idea of when they would like to leave, they should estimate starting their sale process five years before their leave date. It’s ideal to sell the firm when it has the most revenue and profitability momentum, as it will bring more attractive buyers to the company.
The agency owner will need to consider which type of sale they would like. Depending on their decision, they can get an estimated timeline of how long the sale will take. They can choose between three sale types such as:
• Traditional sale
• Limited sale
• Exclusive negotiation sale
If the business owner knows they’re going to sell, they can implement processes to make the transition smoother. They should consider the following:
• Establishing a team that knows their roles within the agency.
• Organizing the finances, so the agency is accurately valued.
• Integrating the operation styles, so the procedures are established.
Clare Advisors is a buy-side and sell-side advisory that specializes in M&A and financial services for digital advertising agencies, marketing agencies, and business service providers. Business owners or agencies considering a strategic merger or acquisition can connect with an M&A advisor by visiting the Clare Advisors website.
John Burns
Clare Advisors
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