Helping Entrepreneurs Buy And Sell Their Agencies

Helping Entrepreneurs Buy And Sell Their Agencies to be established by John Jantsch predicted more at Duct Tape Marketing

Marketing Podcast with Amanda Dixon

In this occurrence of the Duct Tape Marketing Podcast, I interview Amanda Dixon. Amanda is the Co-founder at Barney an M& A house that specializes in the digital marketing opening. She’s also a Forbes 40 under 40 award recipient.

Key Takeaway:

Selling your authority in the digital infinite can be a hard-boiled region to navigate. Amanda Dixon witnessed it difficult to find an M& A advisor who understood matters landscape when she went to sell her own business. Since 2015, her corporation, Barney, has navigated over 150 media, market& tech companionships through acquisitions. In this bout, she’s sharing how she’s cured numerous inventors buy and sell businesses.

Questions I question Amanda Dixon:

[ 1:14] What’s the story behind your fellowship call? [1:57] Could you tell us about your inception narrative and how you got started down this road? [2:55] Is there anything unique to the digital agency space or the digital cavity in general when it comes to selling in comparison to a company with definite resources like a roofing company for example? [3:54] If person finds upon you and what the hell are you do, and they’re ready to sell their organization, what is the first step? [5:00] How do you apply a definite appreciate on digital assets like a methodology or fabric? [6:33] Is there a lane to value future growth? [7:47] Is there a right time or right size or sweet discern for agencies? [10:25] Are you discovering anybody selling parts of their companies rather than an part acquisition? [11:19] A very common model today is beings are outsourcing a lot of the implementation fulfillment, does that make it actually harder to sell? [12:00] Could you talk a little bit about the expert consultants versus authority pose- is that harder to sell? [14:12] Do you have a success story that you can share? [16:06] Does hiring an advisor also come with a unit of law and financial advisors? Or do you have to find that outside of an advisor? [17:49] Have you ever experienced a transaction where a Founder sold the company to their existing team? [18:35] Could you tell people where we could find you and your work?

More About Amanda Dixon:

Connect with Amanda on LinkedIn Amanda’s Website

More About The Duct Tape Marketing Consultant Network:

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Duct Tape Transcript

John Jantsch( 00:00 ): This chapter of the pipe strip sell podcast is increased to you by the sales podcast, hosted by will Barron brought to you by the HubSpot podcast network. Look, if you work in marketings, wanna learn how to sell or just peek at the latest sales news. Check out the sales podcast where multitude will Barron cures auctions professionals learn how to find buyers and acquire big business in effective and ethical directions. One of my favorite chapters lately, how to personalize your marketings outreach at massive flake, who doesn’t want to do that, listen to the salesman podcast, wherever you get your podcast.

John Jantsch( 00:47 ): Hello, and therefore welcomed another episode of the passage strip commerce podcast. This is John Jantsch and my patron today is Amanda Dixon. She’s the co-founder at Barney, an M& A house that specializes in the digital commerce gap. She’s likewise a Forbes 40 under 40 awarding recipient. And we’re gonna talk today about helping industrialists buy and sell their agencies. So Amanda, welcome to the show.

Amanda Dixon( 01:11 ): Thanks for having me, John. This is great.

John Jantsch( 01:14 ): So I have to start with the refer. So, you are familiar with, I, I have girls that are in their thirties and I’m envisioning a purple fossil that I did a a lot of watching with, but I predict there’s too Smith Barney, which is certainly in the finance space, but I’m sure you have and Barney

Amanda Dixon( 01:29 ): The store.

John Jantsch( 01:29 ): Oh, right, right, right. So, so hopefully there’s a story or I’m guessing there is, you

Amanda Dixon( 01:33 ): Know what, there is no such thing as a fib, but I need to make one up because everybody asks the story is we needed a name and a discipline. And I think it was $ 14 on GoDaddy. So that’s what we dissolved up with corporate, but playful.

John Jantsch( 01:49 ): Yeah. Yeah. We are barney.com in fact, was the URL that you self-assured. So your lineage narrative, at least I dove into a little bit is you were like a lot of people, you had something you tried to get something done and couldn’t so you thought, oh, depart do that myself. So yeah. You had an agency and, and sold that bureau or, or somehow relevant. Uh, tell me a little bit about

Amanda Dixon( 02:12 ): That story. Precisely. Yeah. Not inevitably selling services, a tech pulpit that, that sold and the process, this was seven years ago. The process to sell was remorseless. I was pregnant with my daughter time. So there was a exhaustive point year when I demanded this process to be done. And I understood a really tough time finding representation that understood the digital gap. And too, you know, was it gonna charge me a $50,000 a month retainer for me, the dollar amount of the transaction was so life changing, but for the markets and for the large scale M and a world-wide, it wasn’t a blip on the radar screen. So yeah, I really accepted, gosh, there’s this huge gap above a business broker below an investment banker. That’s time are living below, uh , no man’s land.

John Jantsch( 02:55 ): I, is there anything unique to the marketing space, the digital organization seat or the digital seat in general, that various kinds of obliges, you are familiar with, a unplug between people that are also selling, you know, roofing firms a hundred percent.

Amanda Dixon( 03:10 ): Yeah. I entail, in the agency space, there’s no discernible resources. You’re selling relationships with people. You’re selling your culture, you’re selling your patient list, you’re selling your business sit, but that’s it, you have no tangible too, you know, organizations, don’t generally busines patients in a localised grocery. Enterprises can service clients all over the world. We may accompany them niche down based on the type of industry that they’re in, you are familiar with, that they specialising in. They may exactly do PPC or precisely do SEO or just do imaginative, but they’re all over the, “the two countries “. So we just found that kinfolks that do know how to sell construction firms on a localized, on a localised magnitude, simply don’t have the buyer pool to attract their own nationals, you know, a national buyer who’s interested in the digital ecosystem.

John Jantsch( 03:54 ): So let’s say somebody stumbles upon you and what you do, or somebody tells them about what you and their first thing is. Okay. I’m, you know, I’m ready to sell my, what do you have to know? What do you have to start unpacking? Yeah. To genuinely effect I, everybody wants to sell right. Everybody. Overvalues what it’s worth expects the large-scale remunerate date. So, so how do you have to start marching back to reality?

Amanda Dixon( 04:15 ): Yeah. So I ever joke with beings, but it’s one actually 100% serious. My job here in and our team’s job is really to set reasonable beliefs across the board with purchasers and with dealers. So the first thing we do is we’ve gotta get on the same page with evaluation as a house, the authorities concerned will always do evaluation at no cost to really get on the same page and say, this is what your business is worth. Sometimes we’re way over sometimes we’re way under with what they’re expecting. Sure. But nonetheless, that step one, we do that before there’s ever an participation because it’s a lot of time to get these sold and anyone who knows how the, the MNA space manipulates. We, we don’t make any significant money until the business is sold. We’re not in the business of simply rostering and having it sit. So step one is getting on the same sheet evaluation.

John Jantsch( 05:00 ): So how, because there are no discernible assets, certainly it’s a lot easier to sell a construct, you know, as part of a thing. Right. So because there are quite often are like three laptops and, you are familiar with, four cell phone as, you are familiar with, the discernible resources. I mean, how do you be brought to an end putting some, something that is intangible that is more than like, you are familiar with, a, a multiplier of incomes, because there are some people that have created a methodology that have created a fabric that have created something accurately a lane to actually get, you are familiar with, induces. Precisely. I signify, so how do you situate a tangible price on those things that maybe actually haven’t recognise their opportunity?

Amanda Dixon( 05:36 ): Exactly. Yeah. So if the business is returning net income, revenue, EBIDA at the end of the year, it is absolutely worth something right to the right buyer, right? So just like with any other business, uh, in the agency space, the more profitable you are, the highest your valuation outside of the financials, there are some components that are unique to the agency space that go into, uh, what changes these evaluations. Multiple, those multiples can array between often two to 10 X, two to two times, or up to 10 epoches of your bottom line number. Some of those other factors could include the type of revenue that “youve had” or you project located, or your clients paying you on a re current fee, the dimensions of the your patients. Are they all SMBs small businesses or do “youve had” enterprise really big clients? Yeah. What does your auctions and marketing squad was like? Do you have a leadership team? All those things go into, you know, providing what that, that valuation is outside of exactly the financials.

John Jantsch( 06:33 ): Okay. Let’s say you’re talking to somebody who has had like 300% increment three years in a row. So there’s still merely, I don’t know, 5 million. Right. But someone looks at that and says, you’ve cracked something, you know, you’ve like in 10 years you’re gonna be a 50 million business. I entail, is that, is there a behavior to value future swelling?

Amanda Dixon( 06:52 ): Yeah. Great point. So in the agency space, one of the atypical features of going through an M and a transaction, and this ecosystem is we just frequently use a drag 12 P and L we are looking at three years of PNLs, but the reality is agencies can grow a hundred, 200, 300% time each year. It’s not, you know, atypical. So we look at a trail 12 digit for retainer located business. If they’ve got a model down for get brand-new business, right. And their last-place month of MRR is higher than the average of, you know, what the previous years sure. We’ll hold ascribe for that purchasers sometimes push back a little bit, but we will perfectly give credit for juttings. It depends on the time of year two, if you’re midway through its first year and you’re projecting out the current year, it it’s an easier, you are familiar with, event to compile to a purchaser than if you’re finishing up, you know, 20, 21. And you’re saying, but 20, 22 is gonna end up doubled hard to do evaluation off of that.

John Jantsch( 07:48 ): Is there a right time or a title size? And maybe it ha has to do with like, what are your objectives in life? You know, but you are familiar with, is there such a, like, do you get too big? Do you get like too clumsy? I symbolize, I, I wonder if you look at agencies and lead, yeah, “its like” the sugared spot.

Amanda Dixon( 08:06 ): Yeah. So the easiest agencies to sell are between five and 15 million. Okay. And that’s BEC and, and in total slew value. So that puts you at EBIDA right. O starting right at about a million. Once you hit hundreds of thousands of in E you are significantly less risky to buyers. Now we sell lots of agencies that are smaller, but once you touched a million, anybody you’re significantly less risky to buyers, you’re now valuation is, you are familiar with, five to 6 million or higher, which then becomes real life changing money for folks. So formerly you have that million, but that’s a, it’s a great time to think about the conversation. We frequently cover out somewhere in 7 million and it’s 7 million in EBIDA simply because there aren’t that countless authorities that are that immensity that haven’t previously gone through a transaction, the, the five to 15 scope. There’s just so many more customers. When you get above 20, 25, 30 million, the buyer pool declines and you lose the strategic buyer. Yeah. So strategic customers or other agencies that are looking to bolt on a smaller yeah. Uh, those types of purchasers, founders love because they understand the culture, they get the, you are familiar with, what it takes to be successful in the agency space. And they’re not just making decisions based on financial returns. So, you know, I’d sell on that five to 15 array, but again, to each a zone. And

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John Jantsch( 10:26 ): to that detail you just made do people, um, are you seeing anybody selling components that, you are familiar with, it’s like, Hey, I, we I’ll only throw out an idea. We, we need a squad of, you know, YouTube, you are familiar with, averages professionals or social advertising experts. And we don’t have that. So we want to acquire a house that just does that as kind of a part rather, you are familiar with, kind of an AC buy hire.

Amanda Dixon( 10:49 ): Yeah, precisely. So we discover customers do that all the time, and that’s what strategic buyers do. You could be a really great, like e-com web dev shop and say, okay, we need performance marketing to drive eCommerce leads to our patients. We develop these immense concoctions, but we’re not able to drive traffic to them. And our purchasers “re asking for” that. So that’s actually what strategic customers are doing in this ecosystem. Sellers are not typically ever selling precisely a part of their business though, are really selling the whole thing.

John Jantsch( 11:20 ): So talk to me a little about how hard it is. If you are familiar with, a very common model today is beings are outsourcing a lot of the implementation fulfillment. So does that make it actually harder to sell because you don’t really own that part of it?

Amanda Dixon( 11:33 ): Yes and no. So if your assignment based organization and cash is challenging to manage, and the method that you work through that is by outsourcing, deter doing it because bringing in house and then having cashflow publications are not being rewarding because you’re overstaffed for assignments is worse than having outsourced proletariat. If you retainer located , no, raising those people in mansion. There’s no reason to, you can scale up if you’ve got the, if you’ve got the retainers,

John Jantsch( 12:01 ): Talk to me a little about the expert consultants versus agency simulate. I work with a lot of, of consultancies, or at least that’s kind of how they refer to themselves, who I think are, are tactical. They’re providing more approach and not definitely fulfillment is that, it, it, I, I do suppose a lot of terms that is a harder model to sell because it is typically, you know, even if it’s a$ 5 million firm, it’s often about the people that they’re buying or the people’s affinities or the people’s knowledge is that hard to sell than fulfillment engines.

Amanda Dixon( 12:36 ): You know, it’s interesting the market alters, right? Like every busines does relevant agencies M and a market shifts very. We’ve seen over the course of the last couple of years, huge business realize they need a seat at the programme table. Yes. To do the realization. So large those institutions and fiscal buyers are saying, okay, we need to bring on management consulting, whether it’s merely around sustainability or diversification equity inclusion, or whether it’s around just labelling, the approach fragment has become a very desirable because oftentimes strategy is backed by data. And, and so have yes. Having a seat of capable when you’re in the C-suite, which those folks frequently are, it, it is valuable. I wouldn’t say it’s harder. Uh, simply the purchasers are a little bit

John Jantsch( 13:22 ): Different. Yeah. Well, that makes a lot of sense though, because I represent, one of the things that’s going on in the world of fulfillment is you probably know is it’s sort of a scoot to the bottom financially. Yeah. You know, I can get a website or somebody will promise to develop a WordPress for me for 500 bucks. I mean, I who’s to say exactly what it’s gonna be exactly. But I think it’s get tougher to sell hasn’t

Amanda Dixon( 13:40 ): It? Precisely. Well, and look at what happened in the influencer agency opening. Yeah. Influencer enterprises 5, 6, 7 years ago, were making a killing. They were brand new. Yeah. Uh, you are able to time a standalone influencer authority. Now with the rise of the influencer tech feels like a little bit of a hasten to the bottom. And some of those agencies are really struggling to, you are familiar with, remain profitable.

John Jantsch( 14:01 ): Well, “thats happened” 10 years ago, social media, simply agents. Exactly. You know, and then all, all of the general agencies figured out Twitter’s not actually that hard. We could just do that for them. Can’t we, do you have a success story or two that you, I’m not sure how much you can divulge in terms of lists and dollars, but do you want to talk about something that you put together maybe that could grant an, an beings an idea of the best interests of the really going to somebody who specializes?

Amanda Dixon( 14:29 ): Absolutely. Well, uh, there’s, there’s no question that whether it’s us or someone else, everyone going through this process needs to have an advisor on their slope. There are a lot of quirks that go into an M and a transaction. So the, the historic data, you know, and one of the purposes of the swap makings for M and a groups is that nine and 10 enterprises that are listed, never sell. And our fraction of, of marketing marketings is exactly the opposite. We sell 90% of what we bring on, and that’s largely because we’re, we’re hyper nation this infinite and actually understand the business and the buyers. But the other side of that is, you know, you simply need an advocate to guide you throughout the process. So success stories for us are, you know, inexhaustible, we get to help people change “peoples lives” every day. Right. So, you are familiar with, as we look at, at our the enterprises and, and really the specific objectives behind that, we really stick to that core value in that, you are familiar with, everyone that we’re be allowed to get across the finish line is forever grateful to members who us.

Amanda Dixon( 15:25 ): It’s like being married, having a baby and, you know, selling your business. Most of the most people tr trying, just do that, that once. Um, so yeah, I necessitate, success narratives for us live in, in the stories of our clients and the merriment that they feel and the, you know, the phone calls and the text senses and the, you are familiar with, the email and the press about a, a close transaction and someone’s life changing. And the, you are familiar with, it, it’s not just the phone. It “couldve been” the key hires the hell is minted as millionaires at those, the time of those transactions, or, you are familiar with, they is to continue to a much larger ecosystem and followed up with do great things. Those, those are all, you know, wonderful terms of this business. So

John Jantsch( 16:06 ): We’ve talked truly, or, or at least I envision all we’ve actually talked about is the idea of, you are familiar with, having a advisor, but does that advisor come too with the, the legal sides and the financial advisors and the cuz, uh, you are familiar with, somebody let’s say somebody has a successful deal and they, they walk away with two and a half billion dollars, you know, before their make out or whatever. I necessitate, all of a sudden they’ve get, I hate to say their problems, but they’ve got different troubles. Right. I represent, so are you really hiring a squad with your organization or is it more like, oh, we tell people they need to get all those people.

Amanda Dixon( 16:41 ): Yeah, accurately. Sorry. I was,

John Jantsch( 16:43 ): Yeah. I, I tried to extend my question because I could tell you, you were struggling. Could you

Amanda Dixon( 16:48 ): See me contending? I’m muted for a minute. Sorry about that. Yeah. So “weve been” is an attempt do all of that in house. Tribes still need to have their own counsel yeah. To go through the process. They need to, you are familiar with, the purchasers causes closing documents, but at the end of the day, every dealer needs to have a, you are familiar with, an lawyer on their back who can help review those documents. It’s part of a law house. We have an shocking residence council who cures with that process and, you know, will help guide the due diligence process. But eventually the, the vendors do need to have, you are familiar with, an advocate. Yeah. Outside of that, I make, we’ve just got an amazing team of parties that come from the finance industry, but then tribes that don’t, um, beings that come from the agency space, beings that are industrialists and, you are familiar with, our job is to handhold throughout this, what can be a very stressful, feelings process. And, you are familiar with, there’s various components to that from business to, to law and, and some of it’s only psychological regiman. All right.

John Jantsch( 17:48 ): So one last-place question, cuz we’re gonna run outta time. Have you ever knowledge a transaction where a founder sold the company to their existing crew?

Amanda Dixon( 17:56 ): No, that’s ever that, that in a number of cases has been a scenario that parties believed they want to do, but then when they realize that there are other opportunities for their squad, that could be better and could be yeah. They realize that that’s probably not the most wonderful alternative for anyone.

John Jantsch( 18:12 ): Yeah. It probably, it would probably be rare to have, uh, in many cases, a crew that’s even a, something they want.

Amanda Dixon( 18:18 ): Right. Yes, exactly. So that, yeah, we find that, yeah. We find that a lot that, that folks that are, you know, senior leaders at the team don’t want to, you know, own it, they’re happy, you are familiar with, kind of in the real that they’re filling and evoked to go join a larger ecosystem.

John Jantsch( 18:32 ): So short of looking for the purple, uh, dinosaur, could you tell people where we could find you Amanda and your work? Yeah,

Amanda Dixon( 18:39 ): Yeah, exactly. Yes. LinkedIn is a great place to reach me, Amanda Dixon and our website. We are barney.com.

John Jantsch( 18:46 ): Awesome. Well, Amanda, thanks so much better for stopping by. This was a great conversation and uh, hopefully we’ll run into you one of these days out there on the

Amanda Dixon( 18:53 ): Road. Awesome. Thanks John. All

John Jantsch( 18:56 ): Right. So that covers up another incident. I wanna thank you so much better for adjusting in and you are familiar with, we desire those reviews and observes. And merely generally tell me what you think likewise did you know that you could offer the passage tape sell organisation, our plan to your client and build a ended sell consulting coaching business, or maybe level up an agency with some additional works. That’s right. Check out the pipe strip marketing consultant system. You got to find it at ducttapemarketing.com and only scroll down a little and find that offer our organization to your clients’ tab.

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