Want to make millions from your social media marketing agency, but you have no exit plan? I’m George Moulos, founder of Ecommerce Brokers and I will share with you how we’ve helped sell millions of dollars’ worth of agencies over the last ten years.
Most brokers just advise you to sell at a 1x multiple, with a 5 year earn out. But my method is different, guaranteeing 3x, 4x, and 5x multiples of trailing 12 months net profit, with 50-90% of cash up front. Let’s dive into my secret seven practical steps that you can start applying to your social media marketing agency (SMMA) from today, to make millions.
The 7 Steps to Selling Your Marketing Agency
Here are 7 actionable steps you can easily start doing for your agency from today to exit with millions:
1. Take your name off the company
One key thing to ensure is that your name isn’t part of the business name, and that your face isn’t all over the website and ad materials. This is because the buyer will ask: How much of the business valuation is due to the personal brand of the seller?
A simple fix is to change your name to a more generic and relevant one instead. You can simply inform your clients that it doesn’t change impact any other area of the business. Trust me: it can save hundreds of thousands of dollars on the exit plan to do this now.
2. Get your financials in order
The trailing 12 months of the business is the first thing that buyers look at. It should be professionally prepared by an accountant who can break down month by month all the expenses and income of the business. You also need to ensure you can back it up with invoices, tax returns, PayPal receipts, Stripe receipts etc. Every single cent needs to be accounted for!
Also, you don’t just need one years’ financials in order, but also lifetime, especially if your business is 3-10 years old. Your accountant must be able to document every single year, by month. Without this, the time it takes to sell your agency can increase by months, possibly even years, and no buyer will wait that long.
3. Get all your legal affairs in order
All your contracts should be in order, placed in a data room where the buyer can review them quickly. This includes all contracts such as those with employees, clients, even multiple clients from the same franchise. This will make the buyer more interested in your business and willing to pay more as well. Of course, you must also ensure that you have no ongoing legal disputes.
4. Put company SOPs together
Standard Operating Procedures (SOPs) can drastically impact your business valuation, taking you from a reasonable valuation of 3x multiple all the way to 4-5x. By sharing a data room of 10-20 videos made by yourself and your employees on how you operate this business, you’ll be taking a huge weight off their shoulders, helping their confidence shoot through the roof!
5. Take yourself out of the business
If you’re making 2-300k per year in profits, it’s time to start automating and outsourcing yourself out of the business. Remember: buyers putting in so much money into a business don’t want to “job” that they’re putting 50+ hours a week into. They want an automated, turnkey business that is managing itself.
To take yourself out of the business, first, delegate as much work as possible to the existing team. The second step is to start looking for outside hires to take over your role.
6. Decrease the churn rate
One of the first things asked by buyers is: what is the churn rate? A high churn rate means that in 6-12 months the client base currently could be completely gone. As good as it is to get new clients, they don’t want just that funnel going. They want a solid customer base. So, prioritize decreasing your churn rate as part of your exit plan.
7. Talk to a broker
For a better idea on how to make a reliable exit plan, talk to a broker, like Ecommerce brokers. We give free consultations, which can help you get an idea of your valuation and whether you can sell your agency or not.
After you book the appointment with us, we provide:
- Business assessment
- Rough valuation
- The green light to list, or advise on how long to wait
- Practical steps on what to do before going forward with your exit plan
In A Nutshell
Don’t lose out on potentially millions of dollars by not implementing a tried-and-tested exit plan. Ecommerce Brokers can help you with you valuation, and customize the steps you need to have your marketing agency exit plan ready. Don’t take our word for it; we have testimonials to prove how effective our process is. Feel free to book a free consultation with me or someone from my team through our Calendly link. Happy selling!