Question
I have a website design/development agency and we only create amazing websites. While clients come back to us years later when they're ready for a rebuild of their website, there's not any subscription model or contracted loyalty. It's simply their experience working with us and the quality we produce, along with our processes and people.
If I want to sell my company in the next 3-4 years, what do I need to do in order to position my company for maximum sale value and what kind of number can I expect to walk away with? What's the formula to determine a maximum selling point?
Answer
The value of your company is usually determined by multiplying your revenue (the multiple depends on the industry). You might also take into account other factors such as assets owned. Since, you haven’t provided this info it’s impossible to answer a specific sale number you could achieve.
To maximise your particular business, I would try to introduce monthly retainer services (or subscriptions as you call them) with as many clients as possible. A website maintenance service for example or a complimentary service such as SEO or social media. If you have X number of clients paying you X per month, it’s much easier to work out a value for your agency.
As you’ve probably guessed already, it’s difficult to measure the worth of an agency if all the work is one off projects that come into the agency randomly.
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Rob Stephens
robstephens.com
