When it comes to selling your WordPress agency, you don’t want to attract just any buyer. Being open to all types of candidates can result in wasted time or lead to obstacles further down the line.
That’s why it’s important to build a buyer profile to narrow down your search to qualified prospects who are serious about acquiring your business. This means assessing buyer motivations, financial capabilities, and industry experience.
In this post, we’ll explore six factors to help you build a buyer profile. Then, we’ll show you where to find buyers for your WordPress agency. Let’s get to it!
How to identify your ideal buyer (six factors to consider)
When it comes to selling your WordPress agency, you need to think about the criteria in which to measure potential buyers against. This can help you pick out the right candidates and ensure a smooth transition. Here are six factors to consider.
1. Buyer motivations
One of the best ways to vet potential buyers is to find out what they intend to do with your business post-sale.
Your ideal buyer should have a clear goal and a long-term vision that they’re willing to share. Then, you can see whether their plan aligns with your own objectives.
Typically, you’ll be fielding inquiries from the following types of buyers:
- Strategic buyers often own a business that may be in competition with yours. Therefore, acquiring your agency is a strategic move to eliminate competition, tap into new markets, or absorb extra resources.
- Financial buyers are usually only suitable if you’re not bothered about your company’s legacy. These buyers tend to purchase businesses, add value, and then sell them for a higher price to earn a profit. Common examples include investor groups like private equity firms.
- Operator buyers are quite rare. They usually have the least amount of experience in owning and managing companies. The goal of acquiring the business might be to leverage it as a source of income. Or, they might purchase the agency to secure a specific job role.
Naturally, if you aren’t interested in what happens with your business post-sale, you might be open to buyers who plan to restructure your agency. However, if you’ve worked hard to obtain long-standing clients and dedicated employees, you might be more invested in the buyer’s intentions.
Another good reason to assess buyer motivations is that it helps weed out people who aren’t serious about acquiring your agency. For example, the sale of your company might attract unwanted attention from competitors looking for insider information or trade secrets.
2. Geographic reach
Another factor to consider when profiling your ideal buyer is geographic reach and expansion.
Your WordPress agency may be located physically in a certain country. Even so, you probably serve a country-specific audience like a U.S. market. This means that you need to consider buyers who are aware of certain nuances and values that help them understand key team members and appeal to your demographic.
Dealing with a buyer who doesn’t know your market isn’t always bad news. But you might be interested in how they plan to accommodate existing contracts if they intend to live out of the country.
In today’s digital age, running a company from different parts of the world is certainly possible. However, it can be useful to find out how the buyer plans to deal with cross-border challenges. On top of this, candidates may present innovative ideas about geographic expansion to respond to demand in a new region.
Not only will this require knowledge of cultural and regional nuances, but you’ve also got to consider localization, currency fluctuations, and consumer behaviors. Plus, there might be additional regulatory and compliance considerations such as VAT and data protection laws.
3. Financial capability
One of the biggest mistakes when selling your agency is failing to look into the buyer’s financial capacity.
In fact, we highly recommend that you conduct relevant financial checks early in the negotiation process. This can prevent wasting time on candidates who can’t afford to purchase your business.
For starters, you need to know that the buyer has the funds for the acquisition. Therefore, you’ll want to see that they have enough capital to make a down payment. If not, you need to know how they’ll finance the rest of the cost.
This might involve gathering information about their assets, liabilities, and credit history. You can even request a Personal Financial Statement which enables you to verify whether buyers have the capital held in their assets.
Alternatively, prospects may secure funding via business loans or similar. But you’ll want to see evidence of this agreement/contract before you proceed.
For some sellers, covering the cost of the business won’t be enough. You might also like to see proof of extra funds, which will enable the buyer to invest in the agency after the sale to support future growth.
If the buyer doesn’t have the funds to purchase your agency at this moment in time, you don’t necessarily have to disregard them. Experienced buyers may present a suggested deal structure to work around cash flow issues. Although this can be risky, it demonstrates a strong understanding of the acquisition process, so it doesn’t have to be a deal-breaker if the buyer ticks all your other boxes.
4. Industry experience
The buyer’s familiarity with your industry can lead to a smoother transition and significantly impact the success of the agency after the sale.
Experience in the WordPress space shows that prospects are knowledgeable about things like market dynamics and operational challenges. This can be a sign of a qualified buyer who’s in good standing to run the company effectively and make informed decisions when you’re no longer around.
Therefore, it’s important to get a clear idea of who you’re dealing with by asking questions like the following:
- What is their background?
- Have they worked with the WordPress CMS platform before?
- Do they have any specific expertise in areas like web design, ecommerce development, or something else?
These questions can help you determine whether you’re dealing with the right type of buyer.
Note that different backgrounds aren’t always cause for concern. However, you at least want them to have an understanding of the industry or possess transferrable skills.
5. History and reputation
If you’re targeting first-time business owners, this may not be as relevant. However, most sellers prefer to deal with candidates who have a demonstrable track record of successful acquisitions or mergers.
For first-time buyers, we recommend inquiring about relevant qualifications, licenses, or certificates that might speak to the applicant’s ability to take over your company. Otherwise, you should conduct thorough research on the buyer’s reputation in the industry and previous history as a business owner.
This is especially relevant if you’ll be handing over key employees and clients. You’ll want to ensure that they will be taken care of properly.
It might be useful to gain insight into the buyer’s management style and success rates. This can be done by accessing public records that detail a company’s net income and ROI. You can also gauge employee satisfaction using job boards and even social media.
Additionally, you’ll want to know the following: if the buyer does have experience running a business, is it comparable to the size and operations of your company?
Before making a final decision, you should also ask buyers to provide references from previous business acquisitions or even business partners.
6. Transparency standards
A lack of communication and transparency can significantly slow down the sale of your WordPress agency, particularly when it comes to due diligence and negotiations.
Where possible, we recommend evaluating the standards of open communication and honesty. Naturally, buyers need to retain a level of confidentiality (as do sellers). But as the sale gets underway, sensitive information can be protected using non-disclosure agreements (NDAs).
In the early stages, all you have to go on is the initial discussions. That said, there are still some key signs of a trustworthy buyer:
- Do they respond to your messages in a timely manner?
- Are they willing to speak on the phone?
- Do they answer all of your questions?
- Do they acknowledge business failures/challenges or weaknesses in their application?
As you move further down the line, you can also assess the buyer’s willingness and promptness in supplying the relevant statements and resources, including financial and legal documents. The more transparent a buyer is, the more likely you are to secure a smooth, speedy sale for your agency.
Where to find buyers for your WordPress agency
Now that you know how to assess qualified buyers for your WordPress agency, you’re ready to look for potential candidates. But first, we recommend valuing your agency to determine a fair asking price.
If you’ve worked in the WordPress industry for a while, you might be able to leverage existing contacts to sell the agency yourself. Or, you can use online marketplaces and auctions.
Note that marketplaces are not the best place to sell general-purpose agencies since you’ll be in direct competition with lots of similar businesses. Meanwhile, auctions can result in a much lower sale price than what you hoped for.
A better move is to sell your business to an established WordPress agency like Freshy:
Freshy has over 15 years of dedicated WordPress experience, spanning a range of disciplines like WordPress development, web design, search engine optimization (SEO), ongoing maintenance, and more.
Better yet, you’ll hand your business over to a highly skilled team of over 40 WordPress professionals. Our in-house support staff provides a tailored onboarding process to promote a smooth transition for every one of your clients.
Freshy has a strong track record of successful mergers and acquisitions of WordPress agencies of every size, niche, and specialism. You can check out our previous projects to determine the standard of work.
To begin discussions, all you have to do is fill out this simple form and a member of the leadership team will get in touch with you.
Conclusion
Putting your agency up for sale is a major move, but the work doesn’t end there. In fact, one of the most important post-listing checks is to determine whether a buyer is the right fit for your company. This can lead to a smoother transition overall and impact the success of your business once you step away.
To recap, here are six considerations to help you identify your ideal buyer:
- Buyer motivations
- Geographic reach
- Financial capability
- Industry experience
- History and reputation
- Transparency standards
At Freshy, we have a long (and successful) history of acquiring all kinds of WordPress agencies, regardless of the size, niche, client base, or revenue. Fill out this quick form to get started!
Featured image credit: Pexels.
