Questions

I've had this business for 15 years. The markup is incredible (1,100%) and the clients are stable and pay recurring fees. The results I offer are unparalleled. In fact, I have SEO companies as my clients. But I have other priorities right now, and other types of businesses that will require my focus, and I won't be able to devote my passion to SEO anymore. What would be the best way to sell my business?

I've sold my digital agency before and I happen to know a few things about this.

First, you'll need to know that there are three main types of buyers for your SEO company.

1) A bigger agency

Some agencies (eg. content marketing agencies, creative agencies, social media, or even lead gen agencies) say that they can offer SEO services, but most of them don't really have any in-house expertise. If your agency is already profit-making, then it makes a lot of sense to sell to a bigger agency.

But you'd want to be careful of how the deal is done. Most agencies acquire smaller ones for a P/E multiple of 3x to 5x with lock-in and earn-out terms. That's as good as taking a loan from the bank and paying it with future profits from your agency, so you'd want to avoid such deals.

2) Selling to your clients/brands

Some brands/existing clients may need your team's services as a long-term plan. It's easy for them to hire an SEO agency (which will be a cost in their P&L), but if they'd acquire yours, they would be able to break even on their investments. In my case, this was my deal when I exited my agency.

3) An incoming player

There will also be senior marketing professionals who'd want to get out of their corporate lives and run their own company. Given that marketing is the only thing they'd know, some of them might be interested in buying over an agency with existing clients and operational processes, so it'd be easy for them to continue/scale up the business from there.

I recently just wrote something about this here -- https://www.searchenginejournal.com/exiting-your-digital-agency/264551/

Hopefully it helps! Let me know if you'd want further advice. This was a path that I've gone down before and I'm happy to share anything that could help you make a wiser decision.


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 © 2024 Startups.com LLC. All rights reserved.