Before Selling Your Agency

June 1, 2017


In a PRsay post from May 5, Karl J. Skutski, APR, Fellow PRSA, a partner at consulting firm The Tobin Group, offered tips for agency owners who are considering selling their business.

A frequent lament I hear from owners is that it can be as hard to get out of a business as it is to start one. It is not uncommon for agencies to be on the sell block for two years or more. And it could take just as long to structure an inside deal.

That’s because it takes considerable time for all stakeholders to understand and sort through the pros, cons and mechanics of the available options, which include:

  • Selling to a third party, via either a stock or assets transaction (there’s a difference).
  • Selling controlling interest (51 percent) to a third party.
  • Enabling a partner or management team to acquire the business through a variety of strategies, including the bonusing of equity, investment of personal funds, a bank or SBA loan, a promissory note (payable from future distributions) and stock options.
  • Allowing the owner to redeem shares to the corporate treasury over a period of time (which would automatically increase the equity stakes of remaining partners).
  • Merging with another agency.
  • Establishing an employee stock ownership plan (ESOP).
  • Deciding to simply slow down, maintaining control and continuing to receive distributions or dividends (with a strong incentive plan for your management team to keep your financial engine going).  

Visit prsay.prsa.org for the full post.


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