“We try to help the sellers understand what the buyer's long-term vision is, what changes they expect to make, and over what period of time, because all of these things have implications on the business but also on emotions.” – Jonathan Baker The finer details of this episode:<ul><li>Overview of mergers and acquisitions (M&A) in the creative agency sector.</li><li>Importance of preparation for agency owners considering M&A.</li><li>Insights on valuation factors influencing agency sales.</li><li>Discussion on the current M&A landscape and market trends.</li><li>The significance of maintaining clean financial records for M&A readiness.</li><li>Exploration of deal structures and their implications, including Employee Stock Ownership Plans (ESOPs).</li><li>The role of agency owners post-acquisition and the need for clear communication with buyers.</li><li>Timing considerations for initiating the M&A process.</li><li>The impact of economic changes on agency valuations and buyer interest.</li><li>Recommendations for agency owners to proactively prepare for potential sales.</li></ul> Episode resources:<ul><li>Summit Virtual CFO by Anders website: <a href="https://www.summitcpa.net/">https://www.summitcpa.net/</a></li><li>Love our content? Sign up for our newsletter: <a href="https://www.summitcpa.net/summit-newsletter">https://www.summitcpa.net/summit-newsletter</a></li><li>Digital Dollars and Cents: A Virtual CFO’s Playbook to help Digital Companies Create a Financial Roadmap to Success, is now an audio book! Download it here: <a href="https://vcfo.summitcpa.net/ddc">https://vcfo.summitcpa.net/ddc</a></li><li>Connect with Jonathan here: <a href="https://www.linkedin.com/in/jonathandavidbaker/" target="_blank">https://www.linkedin.com/in/jonathandavidbaker/</a></li><li>Check out Punctuation here: <a href="https://punctuation.com/">https://punctuation.com/</a></li></ul> Timestamps: Welcome to the Creative Agency Success Show (00:00:00)Introduction to the podcast's purpose and focus on agency owners looking to scale. Discussion on M&A Preparation (00:00:15)Insights from Jonathan Baker about the importance of preparation for mergers and acquisitions. M&A Landscape Insights (00:00:39)Hannah reflects on the evolving trends in the M&A landscape and its implications for clients. Importance of Understanding M&A (00:01:13)Discussion on how understanding the M&A process can aid clients in their decision-making. Preparation Equals Easier Transition (00:01:39)Jimmy emphasizes that being well-prepared leads to a smoother M&A process and better outcomes. Introduction of Jonathan Baker (00:02:52)Jonathan Baker shares his background and expertise in helping firms prepare for M&A. Jonathan's M&A Journey (00:04:07)Jonathan recounts his personal experience with M&A, highlighting its complexities and emotional aspects. Valuation Nuances in M&A (00:06:19)Discussion on non-financial factors influencing valuation in the M&A process. Timing for M&A Conversations (00:07:51)Jonathan advises when clients should start preparing for M&A, ideally 3-4 years in advance. Post-Sale Involvement (00:09:22)Exploration of the buyer's perspective on post-sale involvement and its implications for sellers. Preventative Maintenance in M&A (00:11:33)Strategies to help owners navigate the transition and maintain business integrity post-acquisition. Deal Structure Non-Negotiables (00:14:01)Jonathan outlines his strong recommendations against certain deal structures, particularly ESOPs. Understanding ESOP Risks (00:15:07)Discussion on the potential pitfalls of employee stock ownership plans (ESOPs) in M&A. Navigating ESOP to M&A (00:18:01)Jonathan shares the challenges and processes of transitioning from an ESOP to an M&A deal. Preparing for M&A (00:19:11)Advice on steps companies should take to prepare for a potential acquisition. Importance of Accurate Financials (00:21:20)Emphasis on maintaining clean financials to facilitate smoother due diligence during M&A. Understanding Accrual Basis Accounting (00:22:01)Importance of running financials on an accrual basis for effective M&A preparation. Trends in M&A Post-COVID (00:22:57)Discussion on inflated valuations post-COVID and current market dynamics affecting M&A. Current Market Conditions for Sellers (00:24:24)Analysis of the current M&A landscape and advice for potential sellers. The COVID Boom and M&A Opportunities (00:24:49)Reflections on the opportunities presented during the COVID boom for agencies. Fun Question About Brewery Towns (00:25:17)A light-hearted discussion on top microbrewery towns in the U.S. Cultural Significance of Local Breweries (00:26:26)Exploration of how local breweries reflect community identity and culture. Contacting Jonathan for M&A Insights (00:27:54)Information on how listeners can reach out for M&A advice and brewery recommendations. Conclusion of the Episode (00:28:05)Wrap-up of the episode and appreciation for Jonathan’s insights on M&A.

Podurama

Home

Trending

Personal

Your Podcasts

New Episodes

My Files

Favourite Episodes

Tags (Folders)

Recently Played

Bookmarks

Followed Playlists

Navigating Mergers and Acquisitions in Creative Agencies with Jonathan Baker

Creative Agency Success Show

AI Chapters

AI Insights

Reviews