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When you make the decision to put your web design agency up for sale, it’s tempting to run full steam ahead. However, acting rashly might not lead to a fair sale price. In turn, this would make it difficult to plan for the future.
That’s why it’s a good idea to take the time to add value to your company before you list it for sale. Not only can this maximize the sale price of your web design agency, but it can also make your listing more competitive and help you properly prepare for the process.
In this post, we’ll discuss six strategies to make your web design agency more valuable to buyers. Then, we’ll show you the best place to sell your business. Let’s get started!
Six ways to increase the value of your web design agency
In this section, we’ll look at some effective strategies that can help you maximize the sale price of your web design agency.
1. Optimize profitability
If you have plenty of time to prepare for the sale of your web design agency, we highly recommend improving your profit margins.
There are various ways you can go about this. For starters, there might be potential to trim costs and increase productivity by improving the efficiency of your current processes, procedures, and workflow systems.
This goes hand in hand with some other changes you could make. For example, you might have room to streamline operations, restructure staff hierarchies, or automate repetitive tasks. On top of this, you can improve your cash flow processes, which might involve shortening the payment terms on client invoices.
However, you should also think about the capital structure of your agency. With this in mind, you could increase the value of your business by reducing outstanding debts or even refinancing to a cheaper source of debt.
And finally, we recommend prioritizing quality profits over quantity profits. Although this can have a negative impact on profitability in the short term, it can increase the price buyers are willing to pay for your agency when the time comes to sell.
When we talk about quality profits, ideally you’ll have a steady stream of recurring revenue. This is highly sought-after by buyers since it offers a certain degree of stability and predictability. Therefore, you can try to develop long-term contracts with clients via retainer agreements or monthly maintenance plans.
2. Reduce client churn
Another way to add value to your web design agency is to reduce client churn. By that, we mean the number/percentage of clients that stop using your services during a set period of time.
High churn rates can be indicative of many problems including poor customer service, low-quality work, or too high prices. Not only that, but potential buyers often like to leverage existing client relationships, rather than investing time and money into acquiring new clients. And naturally, high churn rates have a significant impact on revenue.
One of the best ways to find out why clients leave is to analyze how and when churn occurs within a client’s lifetime with your company. This way, you can use preemptive measures to counter the effect. This might mean offering loyalty rewards like discounts or other benefits.
But even simpler, it’s better to take the time to show proper appreciation for your existing clients. Make them feel valued and concentrate on nurturing long-lasting relationships. For example, you might aim to improve the onboarding process, hold regular check-ins, or ask for feedback to improve client satisfaction.
3. Diversify your service offering
One of the best ways to reduce the risk associated with the purchase is to diversify your current service offering.
This can help you cater to a broader range of client needs and expand your reach, which naturally has an impact on your bottom line. Besides that, it can improve the marketability of your agency, and lead to organic upsell or cross-sell opportunities.
Therefore, think about other services that you could provide as part of your web design agency. Here are some ideas:
- Logo design
- Branding strategy
- Graphic design
- Content writing
- Website hosting
- Social media management
- Website analytics
- Product photography
You could take this a step further and consider other disciplines/areas that lend themselves nicely to your services.
This might mean expanding into WordPress development, performance optimization, security, or something similar. If your existing team doesn’t have the skills and experience to accomplish this, you can outsource work to freelance WordPress experts.
4. Protect intellectual property
One of the main things buyers look for is intellectual property (IP) rights. This gives the buyer exclusive access to products created within your company, such as proprietary technology or software.
While the product itself is a major pull, the rights are what makes your agency more valuable, since it prevents others from using and benefitting off your creation. This means that you have to obtain relevant patents, copyrights, or trademarks before you can list your business for sale.
5. Cultivate a competent management team
Your team of employees (particularly management staff) can be a major asset when it comes to valuing your web design agency.
While you want to demonstrate a highly engaged team with experience across a range of disciplines, it’s essential to strengthen the management sector. This shows buyers that managers are highly capable of running day-to-day operations.
But it’s also one of the clearest signs that the agency can continue to succeed without your involvement. Therefore, buyers will want to see that existing employees are able to make big decisions about the business without your input.
Additionally, you don’t want to rely on just one key individual. Instead, you should nurture a whole team of competent people, eliminating the risk of being over-reliant on a single member of staff.
6. Create a strong brand identity
When looking to attract a buyer for your business, you’ll face lots of competition from similar web design agencies, especially if you’re a general-purpose agency. That said, you can increase your market value by offering an established brand identity.
When assessing the potential for future growth, buyers may consider how easy/difficult it will be to attract new clients. In this instance, well-recognized brands have a competitive edge since there’s already an element of familiarity.
Part of building a strong brand presence boils down to the visual identity of your business. You can adopt a unique look and style, and maintain consistency across multiple touch points using distinct typography, color schemes, logo, etc.
But your wider brand personality goes beyond this. Essentially, you’ll want to establish a clear brand voice that aligns with your business values and messaging. Note that many buyers will check out your social media activity and marketing campaigns, which also provide opportunities to reinforce your brand identity.
How to sell your web design agency
Once you’ve put the work into driving up the price of your web design agency, you’re ready to look for qualified buyers.
There are various options at your disposal, including auctions and online marketplaces. However, marketplaces are highly competitive places where you’ll be in direct competition with similar businesses. On the other hand, auctions can result in a drastically lower sale price than what you expect.
Alternatively, if you’ve spent lots of years working in web design, you may prefer to leverage existing industry contacts to sell your business. This might require a proactive marketing strategy, and you’ll need the time to field inquiries and negotiate the deal.
The problem is that none of the above methods guarantee a smooth transition for your clients and employees. That’s why it’s a good idea to consider selling your company to an established WordPress agency like Freshy:
With over 40 team members, Freshy covers all aspects of WordPress design and development including ecommerce design, security, search engine optimization (SEO), ongoing maintenance, support, and more.
The agency has also been running for over 15 years, so team members are highly knowledgeable and experienced. There’s an extensive portfolio available to determine the standard of Freshy’s work, as well as countless positive testimonials.
However, what makes Freshy extra special is that there’s a dedicated in-house support team that provides a tailored onboarding process to every one of your clients. Better yet, Freshy is interested in acquiring all kinds of agencies, regardless of the size, revenue, client base, or niche.
It’s super simple to kickstart the process. All you have to do is fill out this quick form and a member of the leadership team will be in touch shortly.
Conclusion
Selling a business is a difficult task, especially in saturated industries like web design. That said, you can make your offer more compelling and drive up the sale price by taking the time to increase your company’s value.
To recap, here are six things you can do to maximize the price of your business:
- Optimize profitability.
- Reduce client churn.
- Diversify your service offering.
- Protect intellectual property.
- Cultivate a competent management team.
- Create a strong brand identity.
At Freshy, we have a strong track record of successful acquisitions and mergers across a range of different markets and niches. We also have an entire team dedicated to onboarding your employees and clients efficiently. Complete this simple form to begin discussions today!
Featured image credit: Pexels.