The marketing agency sector is fast-paced and exciting. If you’re in this sector, you may be looking to expand your business. One way to do this is to buy another marketing agency and absorb it into your operations.
When you are looking for the right business to buy, you need to be clear about your goals. Are you looking for a business with a specific niche offering or, perhaps, one with a particular client base?
There are several things that you will have to keep in mind no matter the reason you have for buying a marketing agency. Here we look more specifically at what you need to know before making an offer.
1.Know why you’re buying
The marketing sector has grown tremendously in the last decade. There are various different niches or areas of marketing that an agency can cover.
If your marketing agency lacks skills in certain areas, you may be looking for a business that can add to the technical elements that you are able to offer.
You need to have an in-depth knowledge of the industry so that you can understand what part of the industry is going to grow. You will want your business to keep expanding, make sure you are careful to research the area that you are looking to expand into before you buy a new business.
You could be looking for a particular creative skillset such as video creation or live events. Alternatively, you may be wanting to acquire particular marketing expertise.
Be as clear as possible with what your expectations and goals are so that you buy the right complimentary skillset. If you have been outsourcing a particular part of your business, it can be beneficial to buy a business that will be able to provide you this service in house.
Of course, with the fierce competition that exists within the marketing sector, you may be buying a competitor out so that they are no longer your competition. This way you will be able to increase your share of the market.
Be aware, in all situations, of the staff that will be coming on with the merger or acquisition. You can position yourself well to add impressive talent to your staff!
2. Know what you’re buying
An important part of what defines a marketing agency is the reputation that it has, and the type of clients that it has on its books.
Purchasing a new agency will mean taking on its reputation. If a business is selling cheap, you may want to find out why. Will you be able to rebrand the business successfully when you buy it and put it in line with your business’s identity?
In order to know what you are buying, you will have to take a careful look at the customer lists, clients and the intellectual property of the business.
When you take over another business, you should be very careful to secure the digital rights. You need to get hold of all the web domains, social media and email accounts as these form a vital part of any marketing agency.
3. Do your due diligence
If you are going to buy an existing marketing agency, you need to be prepared to conduct a thorough due diligence.
Have you fully researched what the strategic fit will be? You will also need to understand any employee and management issues and how these will play out in the wider structure of your already existing operation.
It might be in your interest to get the help of a lawyer, accountant or/and business advisors that can help you go through the process. You will need to go through all the contracts and accounts that the business has to know its real value.
You also need to make sure that the clients will remain on after the sale. If they are likely to leave with the old owner, your reason for purchasing the new agency might disappear.
CMC Partners are trusted experts delivering growth and exit strategy development to owners of SMEs since 1989. Growing a business by acquiring another through a merger or acquisition can be a viable option for growth for an SME but must be carefully planned, prepared and executed. With a proven track record of guiding owners successfully through this process and knowledge of the marketing industry with existing clients in this sector, it enables us to add real value to SMEs considering buying a marketing business. Contact us to arrange your free confidential meeting with your local CMC Partner to help realise your full business potential.
Guest blog by Matthew Hernon, an Account Manager at Dynamis looking after Business Transfer Agents and Franchises across BusinessesForSale.com and FranchiseSales.com.