The Exit Plan: Mergers and Acquisitions for Creative Entrepreneurs

Punctuation's co-owner Jonathan Baker discussed the company's function as an adviser focusing on small to mid-sized marketing services organizations on this episode of "The Exit Plan" podcast. During the interview, Jonathan discussed their twin...

Show Notes

Punctuation's co-owner Jonathan Baker discussed the company's function as an adviser focusing on small to mid-sized marketing services organizations on this episode of "The Exit Plan" podcast. During the interview, Jonathan discussed their twin strategy of offering M&A activities, including buy-side and sell-side searches, valuations, and advising services encompassing positioning and lead generation.

Baker emphasized the difficulties in valuing companies, especially those with revenues between $1 and $10 million, and stressed the significance of owner wages and the enterprise's long-term viability after a sale. The discussion also included internal transfers, where Punctuation helps customers negotiate sales with staff members and look into innovative deal arrangements.

Using a sizable newsletter subscriber list, cold emailing, referrals, and careful research were among the market outreach tactics described. Baker recognized the M&A market's cyclical character and the importance of timing in locating qualified purchasers.

The session ended with some insights into typical transaction arrangements, including an earn-out term of two to three years, contingent on performance measures, and an upfront payment of forty to fifty percent. Baker emphasized innovative transaction strategies for purchasers with tight budgets, looking at possibilities like seller-funded working capital and future profit-based payments. In 2024, Punctuation intends to rebrand, launch a digital benchmarking tool, and remain dedicated to offering its customers high-quality service. Emphasizing sound financials and a unique market positioning, the conversation offers insightful guidance to entrepreneurs preparing for a potential sale.

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Creators and Guests

Host
Barnaby Cook

What is The Exit Plan: Mergers and Acquisitions for Creative Entrepreneurs?

The Exit Plan is for business owners that are interested in learning more about how to sell their business. Each episode Barnaby Cook interviews someone who has bought or sold a business - either a creative agency, or a production company. The conversation gets under the skin of why they wanted to sell, or were looking to acquire, how the deal was structured, how they agreed upon a valuation and what lessons they learnt along the way.