Industry Spotlight: Advertising and Marketing
Whether it’s a new venture for an entrepreneur or a business for sale after years of industry experience, Marketing and Advertising companies have come to be an important piece of the puzzle for any business owner. At The Firm Advisors, we have helped a variety of existing enterprises change hands. Here are some helpful tips for buying a business in the marketing, advertising, design and public relations sectors.
Tips for Buyers
Go in with open eyes.
In this industry, particularly, have a good working knowledge of the staff capabilities as you plan for your growth. In marketing specifically, many businesses have adopted a contractor model, which means you have availability within your network to add additional capacity using the same contractors who may be hired to do, for example, one video-based project per week. There may be additional manpower available simply by request.
Envision Your Customer
Many firms have a niche in a particular industry segment, such as health and wellness or packaging design. Know the business’s typical clientele and determine if that is a sector you’d like to continue to operate in, or if your plan is to expand beyond the existing customer portfolio.
Understand the Contracts
Like in construction, project-based businesses typically bring in more overhead revenue, but the income can be less consistent. Many marketing firms focus on rebranding and repositioning their clients, which and profitable good project to have, but it may mean that you are continuously bidding new work. Ongoing contracts may require specific services at set intervals, which could include SEO updates, monthly audio ad updates, or similar.
Who’s the Contact?
It’s important as a buyer to know who the customers are used to speaking with when they contact the business. If there are project-managers who do the day-to-day client contact, your involvement as the new owner may be minimal. However, whether the initial work is bid or won by the current owner can vary largely by the company’s structure. This is not an insurmountable obstacle; most Sellers with client contact understand they may need a longer-than-average transition period to make the appropriate introductions between clients and a new owner/operator.
Get used to the term “asset light.”
Businesses in this sector typically have little-to-no hard assets. This isn’t a bad thing, as many SBA lenders are friendly to service-based businesses, but there may be a personal collateral requirement to back up the bank’s investment in a cash flowing business.
Watch for Pass-Through Income
If your potential acquisition has an element of media buying, you may want to check with your Broker on the diversification of revenue when it comes to pass-through income. If, for example, a company is purchasing ads in a block from a particular media outlet, then reselling that or placing it among their clients, they may be reporting the sale of the ad block as top-line revenue. As with any business dealing with a cost of goods sold, be knowledgeable on if this number is or is not reported in the Net Profit after COGS.
All in all, marketing and advertising businesses are one of the hottest B2B service companies available due to their flexibility for the owner's involvement. Contact us at 402-998-5288 if you'd like to review opportunities in this exciting industry.
- How to Rest - The Secret to Success
- 3 Ways to Find Hidden Treasures in Your Team
- 3 Ways to Hire Top Talent for Your Open Positions
- Less is More: Growing Your Business
- Reaching for the Mountains: Setting Obtainable Goals
- Stop Waiting and Start Now
- How to Increase Workplace Productivity
- Growth Mindset: Essential in the Workplace
- 3 Ways to Tackle the Summer as a Small Business
- 4 Free Resources for Small Businesses
- Embracing the Unknown in Business
- Setting Healthy Expectations in the Workplace
- Why Effective Communication is Essential in Business
- Remote Work Here to Stay
- Learning From General Mills and Shrimp Tails
- 11 Years of Omaha Magazine’s “Best of B2B”
- Due Diligence: Preparation is Key
- Your Business as a Machine: Exit Planning Is Not Just for Exiting
- 10 Industries That Will See Post-Pandemic Profits
- Self-Care in a Pandemic
- Asset Sale vs. Stock Sale
- 5 Most Influential Women in the US
- Advertising Industry Outlook – Adapting Strategies
- How Important Is Due Diligence?
- 6 Best Christmas Movies of All Time
- Construction Industry Outlook – Remodeling & Renovation
- 4 Upcoming Business Trends of 2021
- Industries Booming During COVID-19
- What Are You Thankful For?
- Why it Makes Sense to Carry as a Seller
- Let's Talk About Pets
- What Exactly Are the Benefits of an SBA Loan?
- 2020 Industry Highs and Lows
- What the "Big Buyers" Want
- What’s an earnout, and why does Ryan Reynolds have one?
- M&A Advisor or Business Broker?
- How to Sell a Business in 7 Easy* Steps
- The Firm Advisors: #1 in the World -- Again!
- Documentation is Key During This Time
- Small Business Debt Relief Program
- Work On Your Small Business (While You Aren't Working In It)
- Meet the Listing: Body Shop w/ Towing & Auto Repair
- Superstitions and Deal Killers
- Choosing Your Investments: Stock Market vs. Business Purchase
- Video: Deal Education
- Meet the Team: The Firm Advisors Office Tour
- Securing Your Business Against Ransomware
- M&A: What's an M, and what's an A?
- Location, Location, Relocation
- $20M in One Month
- Pet Care: A Recession-Proof Industry
- The Firm Named to BBB Honor Roll
- Firm Family Christmas
- Firmgiving 2019
- Cortney Sells on IBBA's Podcast
- The Firm Makes Inc. 5000
- M&A: The Industry Defying Gravity
- Have You Met Makayla?
- Dr. Lemberg's Pathway to Retirement
- Steven Makes His Mark in M&A
- Hot Off the Press - June 2019 Magazine
- All Good Things Take Time
- The Firm June Magazine Release Celebration
- The Firm Feels Good Doing Good
- Corner Kick Spoils our Swan
- Opportunity of the Week: A Business That Brightens Children’s Futures
- Q&A With Cortney: Stock Sale Versus Asset Sale
- The Ins and Outs of Seller Financing
- Preparing for the Perfect Retirement
- The Firm Is Breaking Industry Records & Poised for Growth in 2019
- Simply the Best
- Competitor Analysis, Opportunities Listed
- Dentist to Dreamer - Hard Work Pays Off!
- Kansas City Tech Company Useagility Sells to First Tek
- 8th Year as Omaha's Best Business Brokerage
- Sellers: Why You Should Finance Your Buyers
- Summer Intern 2017 - Ameya Shelby
- Industry Forecast: Mind the Generational Gap
- 8 Things We Wish Every Business Buyer Knew Before Calling Us
- Selling Your Business: Getting a Proper Business Valuation
- Asset Sales or Stock Sales: Determining the Best for Your Business Transaction
- Why (and How) Business Owners Are Selling in 2017
- The Law of 3's - Choosing the Right Kind of Broker
- A Mutually Beneficial Relationship
- Reaching Out is Key
- Confidential Business Reviews
- A Change of Pace to Business Ownership
- Confidentiality is at the Core of Business
- Moving into the Boardroom
- Buying a Business vs. Starting Your Own
- Bringing Buyers and Sellers Together is Just the Beginning
- Client Interfacing in the Digital Age
- Four Questions Every Buyer Should Ask
- The Firm Outpaces Transaction Totals from Previous Two Years
- Faces of Omaha 2016: Face of Business Brokerages
- The Firm Business Brokerage Set to Double Sales within Seller's Market - MBJ 2014