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Making the decision to sell your WordPress agency can be difficult. You have personal circumstances to consider, but there are also external factors that influence buyer interest and ultimately, the sale price.
That’s why it’s important to leverage market research to find the optimal time to sell your agency. This way, you can maximize your company’s value, and benefit from a competitive bidding environment to make more profit.
In this post, we’ll take a closer look at the role of market research in a business sale. Then, we’ll explore five factors that influence the timing of your agency’s sale. Let’s jump in!
Why is market research necessary when selling a business?
Market research is the process of evaluating trends and patterns to determine the viability of a certain outcome.
You might be more familiar with market research in the context of launching new products and services. In this instance, business owners assess factors like consumer behavior and competition to decide whether their business idea is likely to be profitable.
The same thing can be applied when listing your WordPress agency for sale. Essentially, you’re getting a good look at the landscape to decide on the best time to sell your business. If conditions aren’t favorable, you might prefer to wait until you can get a better sale price.
It works similarly to the real estate market. During a “seller’s market”, fewer properties are available. The combination of high demand and low supply leads to steeper listing prices. This is essentially what you’ll do for your agency, but there are various factors to consider.
With greater insight into your industry, you can leverage market research to make more confident decisions. Besides scoring a better valuation, selling at the right time can also generate more interest from buyers. It can also result in a speedy sale, with less chance of prolonged negotiations.
Five factors that influence the timing of your agency’s sale
Now that you know the importance of market research, let’s take a look at five factors that indicate the ideal time to sell.
1. Market trends
You can enhance your agency’s appeal by timing the sale to align with positive market trends.
You might already have your finger on the pulse about the latest WordPress developments. That said, you can refresh your memory by connecting with industry publications and conducting your own research.
The WordPress space is rapidly changing, so the growth projections in the industry will also fluctuate. Naturally, you’re looking to uncover evidence of rapid growth or consolidation to increase confidence in your services.
You can even identify the rate of mergers and acquisitions within your industry. If this is high, you might be able to target strategic buyers who are willing to pay a premium price to acquire new markets or resources.
It can also be useful to pinpoint shifts in client preferences and behavior. This should be simple since you can utilize your existing client base.
And, you may need to consider regulatory changes and the impact they could have on your sector.
2. Economic conditions
The health of the economy can play a role in timing your agency’s sale.
Here are some key economic indicators to track:
- Economic growth. This refers to the increase in the market value of goods/services produced within a financial year. For a developed economy, a gross domestic product (GDP) rate of 2-3 percent is a sign that the economy is prospering.
- Unemployment rates. While unemployment signals a downturn in the economy, it can actually be good for selling a business. If highly skilled people are struggling to find work, the opportunity to “buy a job” via a business acquisition may be appealing. It also means the buyer can keep wages low when they take over.
- Interest rates. When interest rates are high, buyers may find it difficult to secure funding. This means that buyers will often make lower offers unless they can raise their cash injection.
- Inflation. An increase in inflation often makes for narrower profit margins which aren’t attractive to buyers. Plus, it might mean the new owner will have to generate new revenue streams to keep the agency profitable. This might prove difficult when consumers are tightening their purse strings.
- Exchange rates. These fluctuate consistently, so there will always be challenges if you conduct international dealings. If the dollar becomes weak, it’s cheaper to sell services abroad. But it can also increase production costs if you require anything (e.g. technology, materials) from overseas.
- Consumer confidence. This is measured by the consumer confidence index (CCI) which monitors the way people feel towards their expected financial situation. Primarily, it deals with consumers’ abilities to save and spend, so it can help you gauge buying intentions.
When the economy is strong and stable, buyers are more interested in investment opportunities, while economic uncertainty generally makes buyers more cautious.
3. New technologies
When it comes to timing your WordPress agency’s sale, technological advancements also need to be considered.
New innovations can have a huge impact on the profitability of businesses. If recent software has evolved that enables clients to “do it themselves”, they have less need for your services.
Think about the popularity of website builders and the explosion of artificial technology (AI). Customers can now utilize AI to generate whole lines of code or entire content pieces like blog posts and web pages. AI website builders only require a bit of input and a multi-page website can be established in seconds.
Additionally, technology is important for showing the value of your WordPress agency. Using the most up-to-date technology stacks and toolsets positions your business as highly relevant and current whereas outdated software/hardware can make you appear old-fashioned.
Also, automation technology has become more prevalent within WordPress agencies. This helps speed up processes and operations and therefore contributes to high productivity levels. This is appealing to buyers since they might foresee faster project completion rates.
4. Competition
Competitive factors can also inform the right time to sell your WordPress agency. Of course, this has a direct impact on the market conditions, but as an extremely significant variable, we’ve given it its own section.
Buyers will be attracted to markets that have at least some semblance of competition since this provides evidence that sufficient demand and interest exist. But in over-saturated markets, it can be difficult for your agency to stand out.
Not only that, but when many agencies are competing for the same ad space, it increases the marketing and advertising costs of a business. Plus, buyers may need to allocate lots of resources to keep pace with competitor strategies and innovations. More competition also tends to result in lower service prices.
And the same goes for attracting buyers. With ample choice of WordPress agencies up for sale, you’ll find yourself in a “buyer’s market”, which means you’ll have less bargaining power.
5. Marketability
The final factor to consider when timing the sale of your WordPress agency is marketability. If your business is well-positioned in the market, it’s a great time to sell.
This means making thorough assessments about the following items:
- Financial performance
- Growth trajectory
- Unique selling proposition
- Stability of your customer base
- Scalability of your business model
- Strength of your management team
If you discover lots of areas for improvement, it’s better to address these first before looking to target buyers.
Where to sell your WordPress agency
Once you’ve determined that it’s the right time to sell your agency, you’re ready to look for buyers. One of the most common mistakes at this stage is failing to target the right kind of buyer.
Sure, you can find tons of prospects across online marketplaces, social media, and auction sites. However, this won’t guarantee a smooth handover of your agency.
Instead, you might prefer to sell to an experienced buyer like Freshy:
As a full-service WordPress agency, Freshy covers all areas of web development, ecommerce, design, SEO, WordPress maintenance, and more. With over 15 years of experience, Freshy is adept at assisting a diverse range of clients across industries like SaaS, tourism, education, charity, small business, and hospitality.
We have our own in-house support team to provide tailored care to each one of your clients. Plus, you’ll benefit from a quicker sale thanks to our deep knowledge and strong track record of mergers and acquisitions.
And while it can be important to time the sale right, Freshy is more interested in your agency’s potential. Therefore, you don’t need to be the biggest or most profitable agency to be considered. If that sounds good, complete this short form today to get the ball rolling.
Conclusion
Getting a good price for your WordPress agency is all about timing. You’ll want to list your business for sale when it’s most valuable to buyers. Not only can this maximize profits, but it can also speed up the process.
Here are five factors to research when deciding on the best time to sell:
- Market trends.
- Economic conditions.
- New technologies.
- Competition.
- Marketability.
At Freshy, we’re interested in all sorts of WordPress agencies, regardless of your client base, niche, specialism, or revenue. We also have a long history of successful mergers and acquisitions. And our dedicated support team will ease the transition for your clients. Fill out this form to start discussions!
Featured image credit: Pexels.