What can you do when you really want to grow fast?

time to grow your agency fast

Put your agency in overdrive.

Do a cross-town merger. This way you add important services you don’t have or bulk up fast and perhaps more inexpensively than you thought. Ad agency mergers can be complex, only if you make it that way. A cross-town merger can be an easy first step. And you can bring in experienced personnel to add to your management team. That’s all possible if you grow by acquiring.

Why Cross-town Merger vs. Out-of-town Acquisition?

Cross-town mergers are often quicker, easier and more profitable immediately. Back office, administrative, production and more can be streamlined with little problem. This simplifies management issues and produces fewer hassles. In addition, a cross-town merger is usually less expensive and is a good place to start. Few executives know the full extent of the many attractive opportunities within their own city.

So how does one go about a cross-town merger?

First you have to decide to seek a merger partner. It’s important not to tell any outsiders about your decision. The search needs to be done in isolation. Second, do a strategy session to look at all the options. What type of firm should we be looking for? Any specialties we are missing? Or what market do you want to get into? Third, organize a proper search to see where the best fit is. Keep your name out of the initial conversation with any prospects. And lastly, use an experienced, outside point of view that will keep the process on track.

Typical Cross-Town Merger Situations We Find:

1. The Cherry A perfect fit where everything goes right from the beginning and continues on through the deal. If everyone is reasonable, Cherry deals can be found and made. Cross-town mergers make these even sweeter.

2. The Slot This is another perfect fit where you can slot the acquired operation into your firm without missing a beat. It’s usually in a service area where you have little experience but solid potential. The acquired firm gains from your resources, your new business opportunities, and the organic business you can place from your existing accounts.

3. The Escape The search phase has located a firm in trouble and the owners want to crash the company, not pay the creditors and move themselves and several key accounts to your operation. You buy nothing. You take on some staff. You pay for what sticks.

4. The Exit The search phase has located an owner who wants out, will stay for a year or two to work the accounts and help maintain AGI. But the owner is phasing out but willing to stay around to help the transition. And is willing to work hard to make the deal happen.

5. The Key Guy One firm is not very good at new business, for example. The other firm is bad at operations but great at growth. The buying firm brings the other firm on board mainly to get the key person and the expertise to help them grow. The other guy wants to sell because he or she is having troubling managing the business already on hand and can’t wait to dump the operational side of things so he or she can go chase new business.

How To Get Started: Not sure a cross-town merger is right for you? We suggest a “Power Hour.” This is a one-hour, no-cost discussion by phone on the best way forward. It’s a chance to check chemistry, analyze costs and investments needed, and discuss possible options and strategies for moving ahead. Give us a call at 412.897.9329 or email info@sandersconsulting.com for more information on how to get started and how to set up a Power Hour on mergers and acquisitions.

When advertising agencies are strategically and creatively driven they can be dramatically successful. Success translates into profitability when the business is operated efficiently. How is your business doing?

Profitability Services Include:

  • Strategic Planning Success Strategies
  • Mergers: Integration, Sales and Acquisitions
  • Profit Improvement Plans and Fee Structures for Medium and Small Agencies
  • Agency Operations Designed for Profitability
  • Managing Growth
  • Cross-Town Mergers

 

 Photo by KrnBrdMnNix