Actively running a WordPress agency requires a lot of time and effort. If you don’t have the bandwidth or motivation to continue, you might want to sell your business. But do you know how much your agency is worth?
There are various factors that prospective buyers will take into account when valuing your WordPress agency. While revenue is certainly important, they’ll also be looking at your client base, brand reputation, and much more.
In this post, we’ll help you decide whether now is the right time to sell your WordPress agency. Then, we’ll explore eight key factors to consider, and show you where to find a buyer. Let’s get started!
Why should you sell your WordPress agency?
You might be looking to free up capital, or maybe you don’t want the hassle associated with running an agency. If you have multiple businesses, you might prefer to drop one from your portfolio to focus your efforts on a project that you’re more interested in.
That said, the thought of selling your agency can be scary, especially if it’s something you’ve put so much time and effort into building, or you have long-standing clients that you enjoy working with.
It can be tempting to let the business lapse into a form of passive income. However, failing to give your agency proper attention can lead to a dwindling client base, which can significantly reduce the value of your business when you do come to sell it.
With that in mind, there are ways to increase the value of your agency (which we’ll discuss in the next section). If you’re not in a hurry, it can be worth doing this to drive up the sale price.
8 things to consider when valuing your WordPress agency
Now, let’s take a look at eight factors to consider when valuing your WordPress agency.
1. Revenue
Naturally, you’ll have worked with different clients throughout your time. You can increase a buyer’s confidence when you’re able to demonstrate a high return on investment (ROI) on past projects.
Recurring revenue is particularly sought-after. Rather than one-off projects, buyers are interested in long-term contracts since they provide stability and predictability. These may include recurring arrangements like retainer agreements or monthly ongoing maintenance fees.
But revenue isn’t the only appealing factor. In some cases, your agency doesn’t even have to be profitable.
Some buyers are more focused on signs that the company can grow. Other factors like an enthusiastic team or intellectual property can help seal the deal.
2. Intellectual property
If you’ve developed a product like software or technology, it can help you secure a higher sale price. Any intellectual property (IP) that’s associated with your service will be viewed as a major asset since this can be used to maximize income in the future.
Intellectual property is protected by patents, copyrights, and trademarks, which means that others aren’t able to financially benefit from your creation without your consent. This means that buyers will gain exclusive access to your creation which can be a huge perk.
3. Client base
There are various ways that your client base will be assessed by buyers. For starters, the number of clients will impact your agency valuation since this is far less risky than purchasing a WordPress agency that relies heavily on one single client.
The type of clients that you’ve accumulated is also of interest to buyers. High-quality partnerships that have been sustained over a long period of time will often be looked upon more favorably than those you’ve just acquired.
Some buyers may also consider your churn rate (the rate at which you lose clients). If you struggle to keep hold of clients, this might indicate that there’s a problem with the quality of your work.
4. Brand reputation
A strong reputation will also have a positive impact on your agency’s valuation. There are various ways that buyers can determine this. As you might expect, most interested parties will look at past testimonials, case studies, and online reviews to gauge client satisfaction.
Some buyers might also judge your online presence to evaluate customer loyalty and engagement. They might look at your social media activity and marketing campaigns to determine your outreach and see the kinds of messages you align with your business.
Additionally, your search engine optimization (SEO) efforts may be examined to see how authoritative and competitive your website is. Having an idea of your organic traffic levels will help buyers understand how much they may need to invest in paid advertising.
Corporate social responsibility (CSR) is another important part of brand reputation since many customers nowadays prefer to do business with companies they believe to be socially responsible. Plus, there are more technical checks that might be carried out to assess your domain reputation and website history.
5. Size of business
The size of your WordPress agency is also an important factor during valuation. As you might expect, bigger tends to be better. In the eyes of buyers, it demonstrates a strong track record and shows that the foundations are already in place to expand upon.
Small agencies can still sell for a high price if there’s evidence of high-quality work, complex projects, and great results. Plus, the scope of services can also increase worth, since this shows buyers that they can cater to a broader variety of customers.
Many journalists and business brokers often depict large companies being acquired by even larger companies. But, there are lots of opportunities for small and mid-sized agencies. For example, many WordPress agencies tend to expand by purchasing smaller ones to access more clients, employees, and assets.
6. Niche specialism
Having a niche won’t always win you favors with prospective buyers, but it can give you a competitive edge when valuing your business. This might refer to in-depth knowledge within specific areas, but it might also refer to the market you serve.
Compared to other general WordPress agencies, it makes your service look more unique. Plus, offering more specific services (that competitors may not), makes your agency more in-demand.
This gives the buyer access to an established but highly targeted audience. Meanwhile, niche agencies tend to charge higher fees too, so they can be more profitable.
7. Expertise and knowledge
Many agency owners forget how valuable the team can be. Do you have a solid group of experts at the top of their game? If this is the case, your agency will be worth more than if you rely on freelancers.
But having specialist expertise can also add more value, especially if the buyer believes they could leverage your knowledge into extra revenue streams. Perhaps your team can provide insights into new trends or markets. This can lower the risk for buyers looking to venture into new territories where they lack experience.
8. Management team
A strong team of key employees and managers will also increase the worth of your WordPress agency. This is especially true if your management staff are highly experienced in running day-to-day operations with minimal interference from you (the owner).
This proves to buyers that there are people in charge who already possess the leadership skills and capabilities to manage the agency. Plus, it demonstrates that the business isn’t completely reliant on you as an individual.
If success is dependent on your industry contracts or specialist skills, this makes it more of a risk for a buyer since it isn’t obvious how the business will function when you’re no longer around.
How to find a buyer for your WordPress agency
Once you’ve valued your WordPress agency and you’re ready to sell, you might want to use a broker or explore marketplaces. However, this can often be a long-winded process and it doesn’t guarantee a smooth transition for your clients.
That’s why it can be better to sell your agency to a dedicated team with a long track record of successful mergers and acquisitions. For example, Freshy has over 15 years of experience with WordPress development, design, ongoing support, maintenance services, and retained service agreements:
With Freshy, the process is seamless and efficient, and we treat all your clients with professionalism and respect. The in-house support team carries out a personalized onboarding procedure to help everyone settle into their new normal.
Freshy isn’t just focused on large agencies with a massive roster of clients. Whether you’re a general-purpose agency or you occupy a specific niche, Freshy is equipped to handle all your clients’ needs.
If you’re not yet convinced, you can check out an extensive portfolio to view the quality of Freshy’s work.
You can begin discussions about selling your agency by filling out a quick form. You’ll then be contacted by a member of the leadership team.
Conclusion
If you’re not able to dedicate enough time to running your agency, your client base may shrink and make your company less valuable in the long run. Therefore, if you don’t want the hassle of day-to-day operations, or you’re looking to free up some capital, it might be the right time to sell your company.
Here are eight key factors to consider when valuing your WordPress agency:
- Revenue
- Intellectual property
- Client base
- Brand reputation
- Size of business
- Niche specialism
- Expertise and knowledge
- Management team
Freshy ensures a smooth process and a seamless transition for your clients. With over 15 years of WordPress experience and a dedicated team of professionals, we have the skills and knowledge to serve a diverse range of clients. And, we’re open to agencies of all shapes and sizes. Fill out this quick form today to discuss selling your WordPress agency!
Featured image credit: Pexels.
