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If you’ve made the decision to sell your WordPress agency, that’s the first step. However, many people don’t realize that the process isn’t that simple. In fact, it can be very lengthy and it doesn’t always go according to plan.
But with proper preparation, you’ll be in a better place to move quickly and obtain a smooth sale for your agency. You can also ensure that your company is in the right shape to attract qualified buyers, and you can even enhance its value to drive up the sale price.
In this post, we’ll first explain how long it takes to plan for a business sale. Then, we’ll show you how to prepare your WordPress agency before you’re ready to look for buyers. Let’s get started!
How long does it take to prepare for a business sale?
Essentially, the time it takes to prepare your business for sale will depend on how quickly you’re looking to sell. Generally, it’s best to wait until the market is booming, so you can get a good price.
Additionally, you may need to consider financial or personal considerations such as retirement planning or capital gains tax. Once you decide on those issues, most businesses can expect to spend a couple of months to a couple of years getting the company into the right shape.
We always recommend giving yourself as much time as possible to prepare for the sale of your WordPress agency. If you’re in a hurry, you can prioritize the areas that buyers will scrutinize during the due diligence process (e.g. financial health, asset ownership).
If you have ample time for preparation you can also explore other factors that take longer to implement. For example, if you plan to streamline operations or reorganize your business structure, you’ll need to set more time aside for these changes to take effect.
The benefits of proper sale planning
If you’re looking to sell your WordPress agency, proper planning can help you increase its value and drive up the sale price.
This is especially useful if you plan to list your company on online marketplaces where there’s lots of competition. You can make your offer stand out by presenting sought-after features like recurring revenue and intellectual property.
Not only that, but it’s the easiest way to ensure that the sale goes smoothly. If you haven’t prepared your business for sale, buyer due diligence can unearth liabilities that might impact the price (or even bring the sale to a halt).
By identifying potential issues in the early stages (and making your legal advisors aware of them), you can rectify them or factor them into the valuation. This means that you’re less likely to get caught out by buyers undertaking due diligence.
However, it also speaks to your transparency as a seller, and it can help you negotiate more confidently. Finally, if the resolution of issues incurs high costs, pre-sale planning allows you to legitimately put this through the company, which can result in tax deductions and VAT recoverability.
8 Steps to prepare for the sale of your WordPress agency
Now that you know why pre-sale planning is beneficial, let’s take a look at eight steps to help you prepare for the sale of your WordPress agency.
1. Conduct financial audits
The financial health of your WordPress agency is one of the first things that buyers will look at. Depending on the comprehensiveness of the due diligence, this can go back up to five years.
For starters, being able to demonstrate a strong financial standing is key to attracting buyers. Typically, buyers will want to see evidence of recurring revenue (often in the form of long-term contracts and retainer agreements) as it offers more stability.
You’ll also need to get your financial records in order so that they’re readily available. This way, you can respond to requests quickly which can make you look more professional and trustworthy to sellers.
Some of the things you’ll need to prepare include past financial statements, balance sheets, and cash flow statements. However, it’s also a good idea to settle any outstanding debts and charges.
Essentially, what buyers are looking for is the assurance that past and present financial performance can support future earning projections. But they’ll also need to understand the risks and liabilities associated with the transaction.
Therefore, we recommend working closely with financial advisors or accountants to look into areas such as revenue streams, profit, expenses, working capital, etc. And if you’re going to be asked to present five years’ worth of financial records, it’s very important to make sure that you have enough time to prepare for the sale.
2. Carry out a risk assessment
If you’re looking to enhance the value of your WordPress agency in the run-up to the sale, it’s useful to manage the risk profile of the business.
There are many factors to consider when putting together risk assessments. These include changes to regulatory or legal frameworks, market disruption, technological disruption, and client dependencies.
Being aware of these risks (and having the right controls in place) will be appreciated by buyers, and it makes your business look stable and organized.
3. Determine asset ownership
Before you list your agency for sale, it’s important to know who owns what. This goes for intellectual property, physical property, lease agreements, and more.
This is especially relevant if the buyer chooses an asset purchase, where they’re able to select which assets and liabilities are included in the sale. It’s important to note that WordPress agencies that split asset ownership between multiple individuals can be a concern to buyers.
In this instance, a price reduction may be requested or the buyer may decide to withdraw. The transaction is much more straightforward if a single person is responsible for all assets associated with the business. This can be arranged with proper pre-sale planning.
4. Maximize tax efficiency
It’s important to think about the tax efficiency of your WordPress agency to create the best possible outcome for you personally.
Of course, the amount will differ based on the location of your business. But generally, the tax you pay on the sale will depend on your corporate structure.
With prior planning, you can make sure that your company structure allows you to retain maximum value when you step away. This might mean having to reorganize your business or group structure, or de-merge parts of the agency before the sale.
As you might expect, these sorts of changes require sufficient time to take effect. Therefore, this step is only useful to those who have adequate time to prepare for the sale.
5. Optimize operations
Potential buyers are also interested in the efficiency of WordPress agencies since this can provide insight into your productivity levels. Therefore, it makes sense to streamline operations before you list your business for sale.
This might mean upgrading your technology stack and toolset to ensure high performance or compatibility with other essential tools/software. It can also involve making sure your systems, processes, and procedures are in order.
Additionally, it can be a good idea to automate repetitive tasks. You might even restructure staff hierarchies if there’s potential to optimize day-to-day operations.
We also recommend assessing contracts and leases to make sure that they’re ready for buyers to review.
6. Incentivize key members
An experienced team of employees can be a huge asset to a buyer. Team members who have specialist skills within niche areas of WordPress can help buyers target a highly-defined market. This can include specific types of WordPress development like Divi development or ecommerce development.
A large team of experts with a variety of specialisms will also ensure that buyers can cater to a broad range of client needs. Buyers are often keen to evaluate the competencies of the management team since this can help them see how well the business will function when you (the owner) are no longer around.
As such, it’s important to retain key members who are critical to the performance and value of your agency. Naturally, it makes sense to consider monetary bonuses, salary raises, vacation days, professional development, etc. This means you’ll be able to present the strongest team members when it comes to selling.
7. Add value to the business
It’s always recommended that you conduct a valuation of your WordPress agency. This helps you identify areas where value can be added. And, it lends credibility during the negotiation phase.
For example, the results of your valuation might reveal that your business could benefit from staff training so that it isn’t too dependent on your skills and experience. It might also mean investing in new equipment, increasing your recurring revenue, or expanding your service list.
You might also decide to move into other areas of the WordPress space.
Let’s say you specialize in web design. What’s stopping you from providing complementary services like graphic design or logo design?
You could take it a step further and offer WordPress development, ongoing maintenance, or search engine optimization (SEO).
8. Enhance marketability
Contrary to popular belief, selling a WordPress agency isn’t as simple as listing your company details. There’s a lot that goes into making your business highly marketable.
You have various options when it comes to finding buyers. You can leverage industry contacts to look for buyers yourself. Or, you can utilize online marketplaces or auctions.
However, if you want to get people bidding on your business, or make your offer stand out on saturated marketplaces, you have to come up with an effective sales strategy. Essentially, your job is to convince prospects of the value of your agency.
Therefore, you’ll need to prepare detailed sales information, but you also have to target the right buyers. For example, if you run a niche WordPress agency, you need to appeal to buyers who are looking to serve a more defined audience.
One of the easiest ways to persuade buyers is to demonstrate your skills and experience. This might mean featuring positive testimonials and putting together a strong portfolio of work. You can also share impressive statistics that prove the success of your projects.
Buyers might even take a look at your digital footprint. Therefore, a strong social media presence can help your case, as can a cohesive brand look across multiple touch points. On top of that, most buyers will run checks on your domain name and website history.
How to sell your WordPress agency
Once you’ve taken the steps to properly prepare your agency for sale, you’re ready to think about buyers. As we discussed, you have various options when it comes to selling your company such as auctions and online marketplaces.
However, you’ll find yourself at the complete mercy of the buyer when it comes to procuring a smooth and speedy transaction. Plus, there’s no way to guarantee that adequate care and support will be provided for your existing staff and clients.
Therefore, it can be a better idea to consider selling your business to an established WordPress agency like Freshy:
Freshy has over 15 years of dedicated WordPress experience that ranges across areas like WordPress development, security, SEO, ongoing maintenance, and much more. We also have a long history of successful acquisitions and mergers.
At Freshy, we’re committed to a hassle-free process. You’ll benefit from fast response times and dedicated support staff that offer a tailored onboarding process for each one of your clients.
Additionally, Freshy is open to agencies of any size, niche, or market. If you’re not yet convinced, you can check out our extensive portfolio to determine the standard of our work.
And when you’re ready to begin talks, all you have to do is fill out this quick form and a member of our team will get back to you.
Conclusion
Whatever your reason for selling a WordPress agency, it’s important to understand that the process is often much more complicated than you think. But with proper preparation, you can get your business in the right shape for a sale, and increase the chance of it progressing smoothly.
To recap, here are eight steps to prepare your WordPress agency for sale:
- Conduct financial audits.
- Carry out a risk assessment.
- Determine asset ownership.
- Maximize tax efficiency.
- Optimize operations.
- Incentivize key members.
- Add value to the business.
- Enhance marketability.
At Freshy, we’re interested in all sorts of WordPress agencies, regardless of specialism, client volume, or revenue. We also have a dedicated support team to efficiently onboard your clients and employees to ensure a smooth transition. Fill out this simple form to kickstart the process!
Featured image credit: Pexels.