Ad Agency owners are constantly looking for ways to solve the challenges faced by the ever-changing advertising landscape – critical challenges that are unable to be solved without the expertise and 24/7 support of their peers. I work with 66 ad agency owners who are constantly challenging each other and receiving instant peer-to-peer feedback. Sometimes those challenges don’t have anything to do with advertising, but with ‘Real Life.’ One important issue recently discussed was, “What’s next and how do you plan your exit?” For agency owners rolling into their mid to late 50’s and some in their 60’s, there’s no better time than now to start these conversations and have all of your options in place. Together, we discussed – and came up with answers – to a number of issues on this topic including: => How to convert your assets into a gold mine. => What are your assets? In a business of intangibles, are ‘you’ your agency’s greatest asset? => How to value your agency – your earnings before interest, taxes, depreciation and amortization. => The understanding that not one template fits every agency for cashing out. => How do you know when you’re financially and emotionally ready to exit your agency and hand over the ropes? => What are the exit options available to you based on – among others – revenue growth, profits, your client base and technology expertise. => What are you going to do with your new-found time? As a former agency owner having successfully cashed out, the best advice I offer is to talk to your peers, not only for tips and suggestions, but for emotional support. Leaving what you’ve done all of your life isn’t as easy as a walk in the park. And, it’s more stressful if you can’t get a substantial reward out of your life-time achievements. The second most important piece of advice I offer is to “sock your money away.” Make as much money as you can and put it towards your retirement. My financial planner advises having a minimum $2-3 million put away when you retire. The third most important piece of advice is to buy property. Agency owners who own their building are farther ahead than those who are renting. When you’re ready to get down to the serious nuts and bolts about succession planning and exit strategies, seek out a professional adviser with tons of agency experience. For the time being, having a group of agency peers in which you can candidly discuss various scenarios, will help sort out the myriad of options and emotions … and prepare you for your next steps forward.
Ad Agency Owners: How Are You Planning Your Exit?
