Executing an exit plan: What buyers of creative agencies are looking for
As consultancies acquire agencies left, right and centre, Generate’s Ben Fletcher considers what it takes to land that all-important trade sale.
If there is one topic that sparks interest in owners of creative agencies it’s how to get out of said agency. Some will want to talk about management buyouts because they have some gun managers which financial backing, but most of the time the exit plan revolves around finding a suitable buyer, getting cashed out and running for an island. Sounds great, right?
Gross over-simplifications aside, there are some consistent key features a potential buyer will be looking for in a creative agency they want to acquire.
The Monkeys acquisition by Accenture was a sign of things to come
Please note when talking about ‘creative agency’ we’re using a broad brush here, and are considering all kinds of agencies including marketing, communications, social media, graphic design, experiential, media, production, branding, digital… you get the picture.
We’re not looking for agencies with:
Senior staff consistently leaving – one must ask why?
Being eagerly open to sell. Doesn’t bode well – we’ll find you.
unsupported claimed business models: if you pretend to do something but you don’t – it’s pretty easy obvious (even if not obvious to your lovely trade press).
Toxic culture: where there’s smoke there is fire.
If you’re an independent agency ask yourself how you do on this list.
I think staff of any level leaving consistently is an issue. I recently left an agency that couldn’t keep their hands on any junior or low mid-level staff. Why? Because they never promoted internally or give minor title and pay promotions like assistant to coordinator to executive weren’t given out when due. All the senior staff there weren’t promoted to their positions, they were hired in. Because of this, they lost some seriously talented staff members to competitor agencies. It’s a shame they didn’t want to invest in them properly. When these talented juniors resigned they would try to give them a promotion they should have received months ago.