Selling - should we or shouldn't we?
The trade sale to a larger group is a classic route for agencies to follow. There is lots to consider before considering this option.
Firstly, are you sure that is the right thing for you?
It will certainly be a big change for all concerned and the loss of control felt by entrepreneurial owners should not be underestimated.
It is an expensive process emotionally and financially.
There will almost certainly be an earnout period of around 3 years, so the actual sale itself will not be the end, but merely the start of a new beginning.
Secondly, are you going to be interesting to buyers?
The usual triggers are a profit before tax of £1 million and a strong looking growth trajectory. There are certain agency sectors that are hot to buyers and timing is certainly key in terms of when you go to market.
There are many examples of agencies that were in hot sectors that have moved outside of the normal rules.
Often in business you get more than one chance to get something right, but a sale process is usually a once in a lifetime opportunity. Planning should start early and it is vital that nothing comes out of the due diligence process to damage the value of the business.
Make sure everything is completely clear. It does not always matter what you have done, but whatever has been done must be documented.