Selling an agency can be one of the biggest decisions a founder makes. But knowing what a business is worth, when to sell and what buyers are really looking for can be more complicated than it seems.
At this year’s 72Fest, Deal or No Deal? The Reality of Agency M&A, Growth and Knowing When to Sell, brought together industry experts to unpack the realities of mergers and acquisitions, from preparing a business for sale to protecting its value and planning what comes next.
Moderated by Ann-Marie Blake, the panel featured Andrew Bloch, founder of Andrew Bloch & Associates and M&A adviser at PCB Partners; Paul Rajput, Partner and Head of Corporate at Lewis Silkin; and Miranda Mitchell, a former agency leader across advertising and PR.
Their message was clear: the best time to prepare for a sale is long before you decide you want one.
Why agency M&A is on the rise
Agency acquisitions are nothing new, but demand has grown as clients increasingly look for integrated services and agencies seek specialist capabilities in areas such as influencer marketing, social, content and data.
Acquisitions can offer a faster route to growth than building those capabilities internally, while also providing access to new talent, clients and markets.
But buyers are rarely interested in revenue alone. They want to understand what a business brings to the table, how it could complement their existing operations and where further growth could come from.
The panel also highlighted the growing divide between specialist agencies and more generalist businesses. Agencies with a clear proposition and distinctive expertise can offer something harder to replicate, making them more attractive to potential buyers.
For founders, having a strong identity and knowing what sets their business apart can make a real difference.
What makes an agency attractive to buyers?
A common misconception is that revenue is the biggest factor in determining an agency’s value. In reality, buyers look at the wider health and future potential of the business.
Growth potential
Buyers want to invest in businesses that still have room to grow. An agency that has reached a plateau may offer less opportunity than one with a clear strategy for its next stage.
Profitability
The panel stressed the importance of looking beyond turnover. Strong margins and reliable financial reporting are crucial when buyers assess a business, yet profitability can sometimes receive less attention than winning new clients or growing headcount.
Leadership beyond the founder
If an agency relies too heavily on its founder, buyers may question whether it can continue to perform once that person steps back. Building a strong senior team and planning for succession can help demonstrate that the business is sustainable.
A diverse client base
Over-reliance on a small number of clients can create risk. A broader portfolio helps reduce that exposure and makes the business more resilient.
A clear market position
Specialist expertise, a distinctive service offering or a strong position within a particular sector can help an agency stand out in a competitive market.
When is the right time to sell?
One of the panel’s strongest messages was that founders should not wait until they are exhausted to consider an exit.
The ideal time is often when the business is performing well, has strong foundations and still has significant growth potential. Buyers want to be part of what comes next, rather than simply paying for success that has already happened.
Equally, waiting longer does not guarantee a higher valuation. Market conditions, buyer appetite and the agency’s own performance can all change, meaning an opportunity that exists today may not be there tomorrow.
The panel encouraged founders to take genuine interest seriously and understand their options before making any decisions.
The deal is only the beginning
Selling an agency does not necessarily mean walking away with a cheque and retiring. Many transactions include earn-outs, meaning founders remain involved for a period after the sale and receive additional payments linked to future performance.
This can align the interests of the buyer and founder, but it also means understanding exactly what life after the deal will look like.
As Bloch put it: “The deal is the wedding. The marriage comes afterwards.”
The panel also discussed the differences between trade buyers and private equity. While trade acquisitions may bring an agency into a larger group, private equity can offer founders the opportunity to retain a stake and participate in another phase of growth before a future exit.
There is no single route that works for every founder. The right structure depends on the business, its ambitions and what the founder wants to achieve personally.
Preparing for a sale before you need one
Poor financial management, weak margins, inaccurate reporting, founder dependency and limited succession planning can all complicate a transaction or undermine a business’s value.
The panel’s advice was to build a sale-ready business well before entering formal discussions. That means maintaining reliable financial information, developing leadership beyond the founder, diversifying clients and having a clear view of where future growth will come from.
For founders who do not want a conventional sale, employee ownership can also offer an alternative, potentially allowing them to realise value while giving employees a greater stake in the business.
Don’t overlook the people
Agency M&A is ultimately about more than numbers. Agencies are people businesses, and the loss of key talent can quickly erode the value a buyer has acquired.
Deals can create uncertainty for employees, while confidentiality requirements often make it difficult for founders to communicate openly during negotiations. Maintaining culture, retaining key people and creating clear incentives are therefore important parts of a successful transition.
Buyers are not simply acquiring a client list or a set of financial results. They are acquiring the people and relationships that make the agency work.
The takeaway: start preparing early
The discussion at 72Fest offered a reality check for agency founders considering their future options. A successful exit depends on much more than finding a buyer or securing an attractive valuation.
The strongest businesses combine consistent growth, healthy margins, a clear specialism, a diverse client base and leadership that can operate beyond the founder.
Most importantly, they still have room to grow.
The best time to think about selling your agency isn’t necessarily when you’re ready to leave. It’s years beforehand, while you’re still building a business that someone else will want to invest in.