ACQUISPECTIVES
SOME PEARLS OF WISDOM FROM ART STEVENS & RICH JACHETTI
FOR PR AGENCY BUYERS & SELLERS
WIDEN THE NET
Don’t fret if the first two buyers that have expressed interest in acquiring your PR agency decide the fit isn’t right. Some may simply be lactose intolerant. There will be a glut of buyers out there for whom the fit is indeed right. The key is to widen the net and find them.
TWO HATS
PR agency founders and owners are among the highest paid professionals in the world. Acquirers need to consider this when constructing offers. A PR agency CEO wears two hats: one of a competent PR pro who is valued by clients. And one of a business owner who wants to make money in the process.
What many would be sellers don’t understand is that if they can’t get their businesses running like a business then an eventual interested buyer will pass.
Do you remember the famous song Judy Garland sang in the movie “A Star is Born?” The song was “The PR Firm That Got Away.” If you as a buyer have identified a PR firm you’re genuinely interested in, don’t let it get away. You may not sing as well as Judy Garland but you have other means at your disposal to demonstrate to the acquisition candidate that your interest is deep and sincere.
To negotiate the best deal for your agency make sure that there aren’t any individual accounts that are more than 20% of your total revenue.
Hey, PR agency owners: do you really need to hire that $100,000 a year account manager? I’ll bet your present staff could handle the new business that just came in. See? I just saved you $100,000 which will go directly into your pocket.
Selling your PR agency for the highest price is no longer the number one reason to sell. The number one reason is jump starting your career and the opportunity to work with an exciting buyer.
A common fault among many PR agency owners is that they have too many account people for the business they have. This reduces profitability and the amount of money agency owners can take out. The rationale? Account people are needed for the next wave of new business. Lesson to be learned: tomorrow may not come that quickly. Plan for today and thrive.
PR agency buyers beware. Don’t construct an offer that is so complicated it would take a rocket scientist to unravel..
PR agency owners walk a fine line. Running a business properly and making a profit is vital. But there’s such a thing as making too much profit. That could mean working your staff to the bone and under servicing clients. The result can be churning clients and staff in and out.
Go the accrual route for a more accurate reading of your financial statements, particularly if you plan to sell your PR agency.
PR agency owners: beware burning your account people out. If they routinely work twelve hours a day you’re heading for trouble. There’s enough stress in the agency world as it is. Do yourself and your people a favor. Send them home at a decent hour.
PR agency sellers beware. Don’t make the mistake of signing a letter of intent with a prospective buyer and then attempt to change terms already agreed to when presented with a purchase agreement. Big mistake. Your deal could implode..
PR agency buyers and sellers: do not allow email communications to replace good old-fashioned phone conversations and in-person get togethers. Emails provide great opportunities for miscommunications, incorrect interpretations, and negative outcomes.
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The Stevens Group is the most
trusted, best-networked M&A
consulting and facilitation firm
in the PR agency category.
Let us help you find a buyer who recognizes your agency's value professionally,
culturally, and financially, and is willing to pay you
a premium for what you have built.
