Selling Your Agency
•Download as PPTX, PDF•
0 likes•61 views
I have set up and sold a few businesses, and failed to sell others. This is my collective experience on how to sell your stake and get out without losing your shirt.
Recommended
Recommended
More Related Content
What's hot
What's hot (17)
Similar to Selling Your Agency
Similar to Selling Your Agency (20)
More from Dixon Jones
More from Dixon Jones (19)
Recently uploaded
Recently uploaded (20)
Selling Your Agency
- 2. Hello! I am Dixon Jones I sold my agency I am (kind of) living the dream @Dixon_Jones
- 3. My Agenda ▪ Setting your goals and setting up correctly ▪ Types of Exit – Pros and Cons ▪ Valuation methods ▪ The Process ▪ Endgame DixonJones.com @Dixon_Jones
- 4. Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has. Margaret Mead DixonJones.com @Dixon_Jones
- 6. Get it right at the start What is your goal?
- 7. Get it right at the start What is your goal?
- 8. Get it right at the start Write it down
- 9. Get it right at the start Write it Down
- 10. Get it right at the start Do you need assistance?
- 11. Get it right at the start Do you need assistance?
- 12. Get it right at the start Set your goal ▪ Radiator Rule ▪ Have a price ▪ Over reach at your peril JVA Pitfalls ▪ Have one! ▪ Drag & Tag issue ▪ Reflect in Mem & Arts ▪ Write the Radiator rule in? ▪ Walk away options good / bad leaver The VC Dilemma ▪ Their exit price is 20X yours ▪ Find a way to address this early ▪ Beware them getting to the pot first
- 13. Ways to exit There’s more than one way to win
- 14. Ways to exit There’s more than one way to win
- 15. Ways to Exit Trade Sale ▪ Beware of being paid in shares ▪ Competitor vs complimentary buyer ▪ Maybe Golden Handcuffs Management Buyout ▪ May need to help the buyer ▪ Possibly lower price ▪ Honorable ▪ No Handcuffs Leave or Liquidate ▪ Rarely the best route financially ▪ Quick ▪ Can be stress free ▪ Can still be a good route (Dividends) Go Public ▪ Expensive ▪ May not be an exit ▪ Ask a Lawyer ▪ Not my bag PE Sale ▪ Means there is more to do ▪ Need good lawyers ▪ Golden Handcuffs
- 18. Valuation Methods EDITDA (Use this!) ▪ Profit based ▪ Multiple is hugely debatable Potential Earnings based ▪ Good luck Asset Based ▪ Best chance of avoiding Golden handcuffs ▪ More cash upfront ▪ Hard for agencies
- 21. The Process DixonJones.com @Dixon_Jones Engage Advisors Team Goal Prospects More than 1 buyer Create deal Play by your rules Reveal I.M. Document Store Play your hand Finishing Line Heads of Terms Due Diligence Contract Money?
- 22. Endgame
- 23. The Endgame (for me) ▪ Two houses ▪ Investments / pension ▪ Met the Queen ▪ Sane ▪ Reputation intact ▪ Financially secure ▪ A year off ▪ Not (yet) fulfilled ▪ Not “rich” (but happy) ▪ Not Healthy ▪ Not any Younger ▪ Not finished!! ▪ Starting again ▪ Older but wiser ▪ Less afraid of failure ▪ Happy to play a secondary role
- 24. Thanks! I am Dixon Jones I sold my agency I am (kind of) living the dream @Dixon_Jones
Editor's Notes
- Your idea of success may be different to mine. For me: Two houses, no mortgage Four cars, none new Marie has not had to work Some passive investments But just started a new business
- Everyone has mantras this one has hit me all through my life. I am obsessed with creating from nothing Not especially good at making a successful business a BIG business. So I exit when a business gets stale (for me)
- Lucky enough to do an MBA a few years ago – {POST EXIT of my agency). Learnt so much about my mistakes! Churchill Lewis. Explains MUCH of why businesses succeed or fail Pay particular attention to the red lines Green lines are labelled wrong (imho)
- We tend to have a dream, not a goal. Robert talks about setting a goal, writing it down and putting it behind the radiator. This is EXCELLENT, but if everything is going well, we kick over the crossbar. The goal passes us by.
- We tend to have a dream, not a goal. Robert talks about setting a goal, writing it down and putting it behind the radiator. This is EXCELLENT, but if everything is going well, we kick over the crossbar. The goal passes us by.
- When we start out, we are young and inexperienced. Full of confidence and bravado, but weak on follow through. - The business plan and JVA are not for other people, they are the foundations of YOUR PERSONAL success (or failure)
- JVA Pitfalls With a proper lawyer! VERY LEAST use something like Rocketlawyer.CO.UK. Have one! UK LAW!!! Drag & Tag issue Reflect in Mem & Arts Write the Radiator rule in? Walk away options good / bad leaver
- I personally think doing it on your own is bad - for the soul and the business. But be wary of VCs…
- VC dilemma You v Them to make a million You – 66%... 5X EBITDA = £300K annual profit for company (200K for you X 5) Them – 33% 5X EBITDA = £600K (200J for them X 5) BUT actually 6 Million to cover the 9 other lost bets!!! You: £300K/year. Them £6M/Year PROFIT!!
- We tend to have a dream, not a goal. Robert talks about setting a goal, writing it down and putting it behind the radiator. This is EXCELLENT, but if everything is going well, we kick over the crossbar. The goal passes us by.
- For me - the game is Chess. Be prepared, know more moves.
- Going Public: Sell to Private Equity frm Trade sale (Competitors vs Audmented market) Management Buyout Or walk away! This may be possible! Liquidate.
- Profit - Potential - Permanence 8.64X EBITDA = Marketing Agency published average. But everything is NOT what it seems… Valuations based on investments, not exits Exit price includes shares Exit price excludes clawbacks It SOUNDS good to publicly talk about a high price. Behind the scenes can be very different.
- Profit - Potential - Permanence 8.64X EBITDA = Marketing Agency published average. But everything is NOT what it seems… Valuations based on investments, not exits Exit price includes shares Exit price excludes clawbacks It SOUNDS good to publicly talk about a high price. Behind the scenes can be very different.
- Aim to agree the evaluation method BEFORE you show the full financials My experience with Ogilvy WPP over the years Charge them £50K to see the figures??? (They’ll never pay, though) Poker vs Chess = being able to show your hand vs having to risk a bluff. Avoid bluffing… negotiate the valuation rules before revealing the whole deck. Profit is the preferred measure of evaluation… not potential. Whatever the heads of terms agreement is, you ONLY lose ground during the due diligence.
- Aim to agree the evaluation method BEFORE you show the full financials My experience with Ogilvy WPP over the years Charge them £50K to see the figures??? (They’ll never pay, though) Poker vs Chess = being able to show your hand vs having to risk a bluff. Avoid bluffing… negotiate the valuation rules before revealing the whole deck. Profit is the preferred measure of evaluation… not potential. Whatever the heads of terms agreement is, you ONLY lose ground during the due diligence.
- I.M. stands for information Memoranmdum
- Remember that. Your health comes first What did you put behind the radiator!? Did you ACTUALLY get out!? Did you actually want to!? WTF do you do next!? What was the point? Maslow’s pyramid… What will you do next?
- Your idea of success may be different to mine. For me: Two houses, no mortgage Four cars, none new Marie has not had to work Some passive investments But just started a new business