Taking Care Of Business: How Lawyers Protect Your Firm

It's no secret that mergers and acquisitions are part of the communications industry. Large firms typically buy out smaller firms in the hopes of reaching out to more local clients and reducing levels of competition in the industry. If you think that this is the right time to sell your boutique advertising agency in Australia, follow these guidelines to maximise your sales price.

Value The Worth Of Your Ad Firm

When you put your ad agency on the market, every interested buyer will want to know how much it is worth. There is no specific rule when it comes to evaluating your boutique agency because it will depend on a number of factors. Valuations for ad agencies will depend on the number of sustainable clients, incoming revenue, existing assets, staff costs, freelancer payments and other outgoing expenses. For instance, if your clients pay you on a monthly basis, your ad agency valuation will be determined after paying off your staff or freelancers and covering the price of your infrastructure like rent and utilities. The valuation of your agency will also depend on records like existing tax returns from the ATO, ABN and ACN details, licenses, loans and debts.

Establish The Selling Price Through A Multiplier Channel

Once the value of your ad agency is established, you can establish the selling price using a multiplier channel. A multiplier (a few times the valuation) is essentially the price a buyer is willing to pay based on numerous factors related to your agency. Generally, a buyer is willing to pay a higher multiplier price if your agency presents less risk and more value. For instance, if you have a diversified set of customers with long-term history and assured ad revenue, the sales multiplier will be higher for prospective buyers. This means that you can expect a higher selling price. If your advertising business is dependent on fewer clients with lower revenue opportunities, the sales multiplier will likely be lower.

Create A Viable Proposition For Interested Purchasers

If you want to sell your boutique ad agency, you must make it a viable proposition for interested purchasers. For instance, a large client sustainable client pool with long-term contracts and recurring incoming revenue will entice several interested purchasers. A built-up reputation with good market share in certain areas will make your ad agency more viable. For example, if you have carved a niche for your agency in the healthcare advertising space, then interested purchasers looking to break into this space will most likely be willing to pay top dollar for your business.

Selling your boutique ad agency for maximum value requires smart planning. Rely on a reputable business attorney to guide you through a smooth business settlement.