Pre-build the agency

A founder came to me in May last year, half convinced he had already missed his window. Everyone had told him the same thing: valuations get averaged over three years, so nothing he fixed now would register, and his choice was a markdown or a long delay.

That advice is half true, and the half that's wrong costs founders a lot of money. The financials do get averaged. But most of what discounts an agency's multiple never appears in the accounts. Succession, client concentration, a proposition a buyer can repeat back to you, systems that run without the founder. Buyers price those on what they see in the room during diligence, not on a three-year average. Improve them and the multiple moves within the year.

We started working together last August. A year was enough to put a proper leadership team and management rhythm in place, sharpen the proposition to the point where a buyer can repeat it back, and take the founder out of the day to day. He is fielding offers now, from a position he was told would take three years to reach.

The expensive mistake is concluding you have left it too late and stopping altogether. There is no point in an agency's life when working on the discount factors does not pay. Sell this year and it protects the price. Sell in three and it multiplies it. Never sell, and you own a calmer, more profitable agency that runs without you, which was rather the point of starting it.

That work, at whichever speed your timescale demands, is the board work I do with a small number of agencies at a time.