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Selling a web design agency can be a challenging process. There can be jobs on the line, clients that need quick deliverables, and the agency’s reputation to keep in mind. The process is also equally challenging if you’re on the buyer side of the equation. With all those factors, it’s not surprising that not all agency handovers go smoothly.
Your web design agency can be the exception if you lay the groundwork for a smooth transition. As the seller, that means preparing employees, clients, and documentation for the handover. As the buyer, it means making sure that everything is in order before you take ownership of the agency.
In this article, we’ll walk you through several tips to ensure a smooth handover of a web design agency, whether you’re selling or buying it. Let’s get to it!
Tips for selling a web design agency
Agencies are complex businesses with lots of moving parts. With that in mind, there’s plenty you can do to simplify things and prepare for a smooth transition.
1. Discuss the agency’s future with the new owners
Before you do anything else, we recommend talking with the new owner(s) about their vision for the agency. That means covering topics such as:
- Whether they plan to keep offering similar services
- If they plan on letting employees go
- If there will be any sudden changes to salaries or client prices
- Major changes in company culture
The more information you have, the more you can prepare the agency for the transition. If the new owners don’t plan on letting people go, that will calm a lot of the panic that tends to arise during sales.
Likewise, if you can get assurances that the agency will continue to offer its core services and won’t suddenly increase prices, clients are much more likely to stick around.
As the current owner, it’s your responsibility to advocate for your best employees to keep their jobs (if not all of them). One smart way to do this is to make sure that the new leadership understands who the most valuable assets on the team are and why they’ll want to retain them.
Overall, if you want the transition of the agency’s ownership to go smoothly, you’ll want to find a buyer with a similar vision to yours. If you can manage that, it can make for a rather straightforward transition.
2. Keep employees in the loop
When a business is about to sell, employees tend to panic. People worry about their jobs, the change in management, and compensation.
If you let that worry fester, it can lead to employees leaving or disturbing the transition in ownership. The last thing you want is for the sale to fall through because you’ve lost key talent.
To avoid that, we recommend talking with employees in general as the sale progresses. Be upfront about the transition, and what that might mean for the business and their jobs and careers.
It’s also a good idea to talk to employees one-on-one, if possible. This will give you a much better idea of their concerns and you’ll be able to address them in a personalized manner.
3. Inform ongoing clients about the sale
Clients might also worry about what will happen during a transition. Most businesses don’t want the agencies they work with to present them with headaches, but rather with solutions. A rocky transition can delay projects and lead clients to seek calmer waters.
If you’re navigating the sale of your agency, it’s best to bring customers in the loop before the transition starts. This will give you time to discuss their needs and calm any fears they might have about the new ownership. That is, if their vision aligns with yours.
Keep in mind that client lists are perhaps the most important assets an agency has, aside from its talent. Buyers will often expect and highlight ongoing client relationships as part of their purchase agreements. Failing to retain key clients during the transition can end the entire process.
4. Review your agency’s standard operating procedures (SOPs)
A great part of your agency’s identity is the way it does things. Over the years, teams and key employees will refine processes until they’re well-oiled and people have a clear understanding of what they need to do.
These processes are key assets. When possible, every important process should be documented as a SOP. That’s a document that outlines how to complete the process, step by step.
An SOP should include everything there is to know about completing a specific task. This may include:
- Step-by-step instructions for each task
- Access to any services or tools a person would need to complete the steps
- Notes concerning updates or changes to the process
- Contact information for the persons responsible for putting together the process
One way in which a lot of modern agencies document their processes is by using knowledge bases, which you can create using WordPress. The more comprehensive your agency’s documentation is, the easier it will be for new leadership to understand how things work over there.
During the transition, ask employees to update existing documentation and fill any gaps. It can also be a smart move to arrange meetings between the new owners and managers and key employees, so they can get a better idea of what they do.
5. Do your best to keep morale up
This last tip is perhaps the hardest, but you’ll want to do your best to keep morale up among employees. Even the smoothest transition can stress them since they might be concerned about losing their jobs.
The best way to keep morale up is to stay in constant communication with employees. Deliver assurances when possible and try to manage expectations otherwise. One way to deliver assurances can be to negotiate with buyers to agree to keep employees on the payroll for a period after the purchase.
Selling an agency is a process that can take months with proper due diligence. If you let emotions run too high during this period, you risk derailing the process.
Tips for buying a web design agency
Sellers aren’t the only party that needs to protect themselves in the process of handing over an agency. As the buyer, you need to be equally prepared to ensure that you’re buying a good asset.
Here are some of the methods that we use at Freshy while evaluating whether to buy your web design agency.
1. Do thorough due diligence
If someone wants to sell their agency to you, you’re in the unique position of being able to ask to look at their financials and how they operate. That’s the core information you need to decide whether buying is a good investment or not.
Financials for an agency will take into account factors such as the following:
- Revenue and profit margins from the past years
- Recurring contracts from clients
- A basic overview of its clients (without revealing operational details)
- Operating costs and debts
- Agency assets
That’s a lot of information to sort through, which is why acquisitions can take months. Even years, if you’re talking about a large agency with a significant client portfolio.
Our recommendation at this stage is that you take the time to analyze the information and consult with professionals. It’s better to identify problems during the transition, while they can still be addressed with current ownership, so try to let nothing slip through the cracks.
2. Request SOP documentation from the current owners
An agency with sparse documentation can be a challenge to manage. If there’s no documentation, it means there are key processes that can disappear if an employee decides to leave or cannot continue to do their work.
Moreover, well-documented SOPs tend to translate to better deliverables. Comprehensive documentation can leave less room for error, leading to less need for micromanaging employees.
We recommend you familiarize yourself with the agency’s documentation during the transition. Select the most important processes you want to focus on and discuss with employees. And, get to know how the agency does things before you decide to make sweeping changes.
3. Identify key employees and their responsibilities
In most agencies, there are employees who can handle some of the most challenging tasks or who are great team leaders. That is the kind of talent you want to ensure doesn’t leave the business during a change in ownership.
Losing some of the agency’s best assets before you take over can be a heavy blow. To avoid this, you’ll want to be upfront with the owner about wanting to retain talent. While you’re at it, you’ll also want their help in identifying any employees who are critical to the business.
You might also want to arrange meetings directly with employees (with the current ownership’s approval). This can help you deliver assurances about retaining jobs, and it gives you an opportunity to discuss their careers after the transition.
4. Ensure that all client and vendor contracts are updated
You don’t want to take ownership of a web design agency only to find out some of its best client or vendor contracts are about to expire. This is something that should jump at you at the due diligence stage, but it’s worth analyzing further.
The first months of your tenure are likely to be rocky. As good a manager as you might be, it’s challenging to adapt to a leadership position for employees who worked with a predecessor. It’s also difficult for employees to adapt to new management styles.
If, on top of that, you need to renegotiate contracts from the minute you take over, it’s a recipe for trouble. To avoid this, discuss with the owner the possibility of renegotiating contracts early during the transition. Clients will likely want to be brought into the conversation as well, which is perfect since it can help you establish a relationship early.
5. Set a timeline for the transition
If you want the handover of the web design agency to go smoothly, we recommend creating a timeline. Outline how long the transition should take, the steps it should cover, such as due diligence and reviewing documentation, hiring and dismissal decisions, and when it ends.
It’s also important to note this transition timeline is likely to fall off the rails at some point. Switching leadership at an agency can be chaotic, so some parts of the transition are likely to take longer than expected, be it due to poor organization, low morale, or other reasons.
These delays can be an opportunity to see how the current owners and employees work under pressure. A team that can negotiate the challenges of a transition well can be worth keeping!
Conclusion
Selling or buying a web design agency is a complex process. You have to juggle client contracts and relationships, as well as keep employees on board if you want the handover to go smoothly. A poorly managed transition can lead to some of the agency’s best clients and talents leaving.
If you’re currently considering selling your web design agency, make sure to talk with clients and employees about the transition to keep them calm. While you’re at it, prepare documentation for everything that you do in the agency. As a buyer, if you have assurances from clients and staff and access to thorough documentation, you’re off to a great start.
If you’re interested in selling your WordPress web design agency, we want to hear from you. Freshy has a long track record of WordPress acquisitions and your agency could be the next one. Let’s discuss a potential sale!
Image credit: Pixabay.