Questions

I was wondering if there is a chance to sell a service based company (providing marketing services) and who will buy it?

The only thing worth acquiring is an agency's book of business which most small agencies don't really have. By this "book of business" I mean clientele who is regularly purchasing your marketing services and ideally you have an ongoing service contract with a number of them. In this case, a sale is entirely possible although there is usually a substantial portion of the sale price that has to be "earned-out" based on performance of those contracts, and in some cases retention of key people.

Generally speaking, these deals happen with far less frequency than they used to because of their failure to create long-term value for the acquirer and when they do, they are often best done (for the acquirer) as equity, not cash. So "yes" there is a chance, if you have that book of business that upon inspection, looks valuable, and if you have done groundbreaking work that has created a notable reputation for you and your team, but it's not likely to result in a great payout.

If you're asking because you're struggling, you're better off trying to recruit a new CEO, and giving them a big chunk of your existing business (on an earn out basis) who has new energy and new ideas on how to grow the business. If you're asking because you're considering starting a services company of this kind, I would go into the business expecting that an exit via a sale would be very low.

Happy to talk this through in more specifics to your situation in a call.


Answered 6 years ago

Unlock Startups Unlimited

Access 20,000+ Startup Experts, 650+ masterclass videos, 1,000+ in-depth guides, and all the software tools you need to launch and grow quickly.

Already a member? Sign in

Copyright © 2020 Startups.com LLC. All rights reserved.