What is the Best Time to Sell Your PR Firm?
By Rick Gould CPA, J.D.
Choosing to sell your PR firm is a big decision, and one you should not take lightly. There are many factors to consider when weighing the pros and cons of putting your PR firm on the market. One of the most important factors to understand thoroughly is when to sell your PR firm. As company owner, you must make sure your company is in prime position to be sold, and that you, yourself, are prepared to step down as company owner.
So when is the best time to sell your PR firm? The timing differs for every company, but here are some general guidelines to keep in mind when determining if now is the right time to sell:
• Your firm should have quality second tier management
• Your firm’s recasted profitability should be approximately 20% but may be lower if there are other value boosting intangibles.
• Your firm should have a strong balance sheet and liquidity.
• Your firm should have a strong client base.
• Your firm should have a strong brand and a reputation for producing high-quality work.
• Your firm’s financial records and accounts receivable should be current and in order.
Housing an internal review performed by a qualified mergers and acquisitions financial consultant and assessing your organization based on the Benchmark Review test can help you to further assess whether or not your firm is in an ideal position to sell.
While it’s important to make sure the firm is in an ideal position to be sold, you as company owner should be sure you are comfortable with the timing of the sale as well. How do you know if you’re in the ideal position to sell your PR firm? Consider the following guidelines:
• You are ready to have a boss – and not BE the boss.
• You are ready to let someone else call the shots within the organization.
• You are willing to share some of the risk via an earn-out model.
• You are comfortable with surrendering some of your duties within the organization.
• You still feel at the top of your game and are open to new challenges.
Selling your PR firm can be challenging and intimidating, but understanding when to sell your firm – and ensuring that you are entirely comfortable and ready to make the sale – can streamline the process and make the sale of your PR firm a positive and rewarding experience.