Lots of M&A in the channel – both vendors and partners. Are you looking to sell your Agency or business? What’s the Goal?
Are you just looking for investment for growth? Do you need help in the back office? Do you need technical expertise? There are ways to fill in those blanks while still retaining control of your business.
Have you had enough? Been doing this a long time and want to retire? Well, for certain hire an attorney. No matter how many phone calls you get or how much pressure, hiring an attorney is always a smart investment.
Know what you want and shop around. This is a seller’s market because there are a lot of buyers.
You are going to need a business to sell and by that I mean a corporate entity, books, CRM and systems in place. These are ingredients to a healthy valuation of a sellable business.
Some things to ask yourself: Will your business run without you? What are your assets? What about liabilities? What does your P&L look like? Do you pay rent or have a long term office lease? Do you have payroll? What expenses are getting in the way of an improved EBITDA?
Culture was mentioned by the Upstack CEO because individuals in our business have personalities and they don’t all fit well in org chart. But that may be required for 3 to 5 years.
The fine print is the whole point!
Know what the goal is. Shine light on all the details.
No one gives money away without a return. No one.
Remember the Lesson of TNCI! The Agent Equity Plan? It went Poof!
Honestly, when I see all this money entering the channel, I know that it is a bubble ready to explode. These investors have put over $650 million into brokers/agencies (not to mention the billions in MSP M&A and MSP vendor M&A). They want at least $1.3 Billion back at the least.
Yet we are seeing fire sales in the UCaaS provider space – think Fuze and Netfortris. Why? Investors have been in that company much longer than they expected – and they want out. They will take the haircut.
Numerous IPOs and SPACs have been put on hold. Why? Market isn’t friendly.
Remember that your assets are Yourself, your client list, your commissions and any other revenue stream. Those are also the same assets that any broker/master agency has. Some may have intellectual property, but that would have to have commercial value. So mostly the revenue for a TSD is just the commissions they collect for us. Of course, MDF funds are also an income stream for ALL of the formerly known as master agencies. Keep that in mind when negotiating.
Good article on Channel Futures to read about where Partners are and what to think about.
No matter what anyone holding a microphone tells you: the Agent space is not dying. They have been saying it for 10 years and have been wrong so far. Yes, slinging just internet makes it harder to make a living with declining revenues.