Bob Weissman, Your Agency Specialist Consultant

Mergers and Acquisitions For Growth

By on July 17, 2014 in Uncategorized with 0 Comments

Mergers and Acquisitions For Growth – A 3rd Approach to Achieve 20% Growth for Your Agency

In previous posts, I’ve discussed various alternatives to growing your agency using an organic growth strategy and/or a partnering for growth strategy. Now let’s have a look at a third scenario: Mergers and Acquisitions for growth – the third of the three key pathways to achieving a 20% rate of growth for your agency.

Advantages of Mergers and Acquisitions for Growth

The primary reason for growing via M&A or roll-up is bringing added value to your clients. By combining the unique positioning of various agencies you potentially differentiate yourself and position yourself for growth. The ability to do so, of course, is dependent on resources – primarily capital. That’s why many mergers today are equity deals of one kind or another.

The greatest advantage of a Mergers and Acquisitions for Growth approach may be time to market – remember, you’re in a highly competitive arena. You bring talent and capability into your organization much faster than you could ever develop it from within.

By providing economies of scale (eliminating redundant functions) you’re able to build greater margins and potential profitability. As we discussed previously, with Partnering, you most times have to share margin with your partners. With M&A, you’re building the capabilities into your newly expanded agency and keeping the margin and profitability in-house by doing so.

By pursuing a Mergers and Acquisitions for Growth strategy, you’re building long-term value into your agency. By, improving scale, increasing capability, and broadening the range of clients you can serve, you build a strong position if selling your equity is part of your long-term exit strategy.

Challenges in Mergers and Acquisitions for Growth

So, what’s the downside? As mentioned above, acquisition requires resources. Even if this strategy is equity based (requiring less cash), it requires a lot of negotiation between the principals of the merging businesses. And managing egos can become one of the greatest challenges in this approach. For entrepreneurs starting their business to be their own boss, working with or for others can be problematic.

Is Mergers and Acquisitions For Growth The Right Approach For You?

In over 10 years of consulting, I’ve had the opportunity to work with a wide range of agencies, 50+, and in quite a number cases working with a mergers and acquisitions for growth strategy. As an agency specialist, I’m uniquely qualified to help you understand the pros and cons of various growth strategies as applied to your highly specific circumstances.

As this series of blog posts and videos continues, I’ll walk you through alternative agency growth strategies that can be applied alone or in conjunction with others. So make sure you get on my email notification list using the form in the right hand column on this page.

And if you’d like to have a personal chat about how your agency is dealing with growth (or the lack thereof) then please contact me directly. I’d be happy to provide you with a free consultation.

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About the Author

About the Author: Bob Weissman has consulted with more than 50 marketing, advertising, PR, and technology agencies. He's helped them develop an agency growth strategy targeting a 20% minimum growth rate. He is a board member of the Philadelphia Ad Club and has been a consultant with the AAAAs and Ben Franklin Technology Partners. .


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