If you are looking to acquire an agency, there is a lot of work that needs to be put into place. First, you will begin by doing some housekeeping, i.e. focusing on cultural fit, strengthening the leadership team, and cleaning up the financial picture. However, once the groundwork has been put in, you can’t simply dive right into making offers. You need to have a plan in place before you can move forward. This requires research and a well thought-out strategy, after which you can execute it and start making offers.
Putting Together an Acquisition Strategy
You may be wondering what an acquisition strategy actually is. This is basically a collection of specific guidelines, which state your approach and appetite regarding deals – the origin, execution and integration of them. This should be put together in a detailed yet clear document, which clearly states your approach and empowers all of your employees to get on board with the strategy.
This strategy needs to be given to all of your staff members, and you need to discuss it with anyone that is going to be involved in the process. Consider it as part of your overall business plan; don’t segregate it.
So, what should be included? Of course, there are no set guidelines, as this will change from business to business, and acquisition to acquisition. However, we can take a look at a general overview of a basic structure. So, firstly, your plan should indicate who is going to be the leader. Then, you need to state your appetite, as discussed earlier. After this, incorporate plans for the execution of the acquisition – this means the origin, pricing, negotiation, and closing the deal. Finally, integration is the last part to include.
Developing an Appetite
Let’s round up by taking a further look at developing an appetite, as this is an area a lot of people struggle with. They don’t understand what it really means. But don’t fret; it is actually simple. Appetite simply indicates the types of businesses you are targeting.
Let’s say you want to expand your firm geographically, for example, then your appetite may be to target an agency that is located around 200 miles from your flagship office. You will probably be looking for an agency that already has impressive service capabilities, production, and local leadership. Alternatively, your appetite may be to expand your current offering and, therefore, you may be looking to move into different niche areas, hence targeting a firm that specialises in a different area than yours.