Laying the Right Foundation for Eventually SELLING YOUR AGENCY with Ronik Patel | Ep #720
Are you thinking about an eventual exit from your agency? Curious about how to prepare for selling your agency down the road? Preparing for a potential sale well in advance can be beneficial, even if you ultimately decide to retain your business. Our guest had a clear vision of his goal: to grow his agency while waiting for an opportune moment to sell. He shares valuable lessons on how coaching accelerated his growth and why he wishes he had joined a mastermind group sooner to establish the necessary systems for a successful sale. He shares insights into building a thriving agency and navigating the industry with a strategic approach.
Ronik Patel is the founder of UnlimitedWP, a white-label WordPress Development company recently acquired by the white-label agency and longtime friend of the Smart Agency podcast, E2M Solutions. He shares his journey in the agency space, from starting Unlimited WP to its recent merger with E2M, and discusses the unique approach of productizing white-label services for digital agencies and the inspiration behind it.
In this episode, we’ll discuss:
Building a sellable agency from scratch.
The impact of agency peer groups.
Preparing for an agency sale.
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Sponsors and Resources
E2M Solutions: Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions, a web design, and development agency that has provided white-label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service.
Building a Sellable Agency from Scratch
Ronik has been in the agency space for eight years, when after completing his master’s degree in entrepreneurship, he faced the challenges of a failed startup and recognized the need for a venture that required minimal initial investment. While operating an agency is not without its complexities and uncertainties, it offered him the opportunity to launch a business independently and with no capital, allowing him to gradually develop it into a lifestyle enterprise.
However, Ronik's ambitions extended beyond merely creating a lifestyle business; he aspired to build an enterprise with the potential for future sale. To achieve this, he engaged with agency coaches to explore alternative models that would allow for rapid scaling and eventual sale. Inspired by design firms that successfully productized their services, Ronik noted the absence of similar strategies within the agency sector at that time. Determined to innovate, he set out to implement this approach in his own agency.
Accelerating Success: The Impact of Agency Peer Groups
Reflecting on his personal journey, Ronik believes that one of the most impactful decisions he could have made earlier was to seek out a mentor and join a mastermind group. His experience has shown that being part of an agency group and learning from industry experts can dramatically accelerate growth and success.
By being part of a community of like-minded individuals, a step he took during his third year of owning an agency, entrepreneurs can gain valuable insights, advice, and support that can help them navigate challenges and make informed decisions.
However, changes don’t happen overnight. It took Ronik a couple of years to learn and implement what he learned, so he could have potentially achieved his goals in half the time if he had joined sooner. Ultimately, engaging with others and sharing experiences, helped him gain the confidence to try different things and improve his business strategies.
Moreover, things won’t just happen unless you challenge yourself to actively participate in these communities to reap the full benefits of membership. Ronik stresses the importance of showing up, asking questions, and seeking help when faced with challenges. Being proactive and engaging with other members is the best way to leverage the collective knowledge and expertise of the community to overcome obstacles, find solutions, and achieve their goals.
Building Value for Buyers: Lessons in an Agency Exit Strategy
When it came time to sell, Ronik didn’t have one particular reason to take this step. The timing was right, the offer was just right, and he had always envisioned he would sell at some point.
Outside of just waiting for the right moment, he does recommend preparing for that moment by making a shortlist of potential buyers and initiating conversations with them to understand what they are looking for in a buyout, as well as actively seeking out potential buyers and making introductions early on in the process. By building relationships with potential buyers and understanding their criteria for a buyout, entrepreneurs can better position themselves for a successful sale when the time comes.
Ronik also highlights the importance of understanding where the weightage will go in a potential buyout. He shares his experience of not knowing initially that factors such as the team, revenue, brand, and marketing channels would be crucial in the eyes of the buyer. By knowing this information ahead of time, entrepreneurs can tailor their efforts and focus on strengthening these aspects of their business to make it more attractive to potential buyers.
Ultimately, it’s always good to set up your agency for a possible future exit even if you don’t end up selling because it creates freedom either way.
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