Sakas & Company View RSS

Helping agency people make smarter decisions for smoother growth
Hide details



2030 agency predictions from industry expert Karl Sakas 8 Apr 10:23 AM (9 days ago)

What’s next for your agency in 2030? See predictions from agency expert Karl Sakas! 

Top Resources From the Live Event:

  1. How to reposition yourself as a “strategy-first” agency
  2. 9 Ways for Busy Agency Owners to Write a Book by Henry DeVries
  3. Increase your profits with the right agency business model: Think, Teach, Do
  4. Courses and Training at Sakas & Company
  5. Not doing that thing? You need Desire, Competence, and Capacity
  6. Choose the right marketing Agency Model: Should you be Front-End, Back-End, or Full-Stack?
  7. Want to create a more profitable exit? Get a copy of “Control (and Maximize) Your Agency’s Exit”

Add post to Blinklist Add post to Blogmarks Add post to del.icio.us Digg this! Add post to My Web 2.0 Add post to Newsvine Add post to Reddit Add post to Simpy Who's linking to this post?

How to tell your employees that you’re selling the agency 27 Mar 8:01 PM (20 days ago)

Most agency owners consider eventually selling the business, and some take action on that goal. Once you reach that point, you’ve likely spent months—maybe years—getting everything in order. And now you’re about to close the deal.

You’re ready to be done, but there’s a major step before you celebrate: How will you break the news to your team?

To most of your team members, this news is likely a shock. They weren’t part of the sale negotiations, and they’re now facing an uncertain future—that you’ve sold (or are about to sell) your agency.

The key? Put yourself in their shoes. Get ahead of their fears by answering two crucial questions:

  1. Why are you selling the agency?
  2. What does this mean for them?

Be careful. If you don’t handle this well, you risk hurting morale—with consequences for productivity and retention. It could even torpedo the sale, either before the closing or by hurting your earnout payments.

Tell employees why you’re selling

First, your employees need to understand your motivation for selling—why is this happening, and why now? If you founded the agency 20 or 30 years ago, people likely won’t be surprised that you’re selling. The same is true if you’re approaching a typical retirement age.

Barring obvious explanations, employees may assume the worst—that the agency is struggling or that you’ve lost confidence in the business. Neither assumption is good for retention; no one wants to stay on a sinking ship.

Frame the sale in a way that reassures them. For example:

Be honest, but ideally position the sale as an opportunity—for you and the team. This includes helping them meet the new owner(s), to hear directly about the new plans.

Explain what the sale means for them

Once employees understand why you’re selling, they’ll shift to what really matters to them: What does this mean for me? Or as they say, “What’s in it for me?” (WIIFM)

If you don’t address these questions proactively, employees will start imagining worst-case scenarios. Some may start job-hunting before they even hear the full plan… even if it might be a plan that’s great for their career. Don’t create an inadvertent leadership vacuum.

Give employees a reason to stay

One agency I worked with took a smart approach: they didn’t just break the news and hope for the best. Instead, they gave employees an incentive to stay.

Consider whether you can offer a similar incentive. Even a modest financial bonus tied to the sale can turn employees from anxious spectators into motivated partners in the process.

And if you have an executive team, they’re more likely to get phantom stock or other incentives to help you grow the business. They’ll have known about this for months or even years. You want them “rowing in the same direction.”

When you retain the right people after the sale, you’re more likely to collect your full earnout payment(s). Why? A staff exodus can prompt a client exodus, which would likely impact your earnout KPIs.

Tell your managers first

Before a company-wide announcement, meet with your leadership team first. Your managers will be the first people employees turn to with questions, and you need them aligned with the message. 

If your executives raise serious concerns, pause or slow the process to address things. You don’t want them to torpedo the deal later, especially during the already-stressful due diligence process.

Communicate early, often, and repeatedly

To communicate enough, it’s going to feel like you’re over-communicating. You already know what’s going to happen, but your employees don’t. Expect to repeat yourself—and anticipate that rumors will spread. 

For a smooth transition, plan for these six communication steps:

  1. Align with the buyer on what details you can share with the team. In general—the more the better. But don’t promise things you aren’t confident you can deliver.
  2. Tell your immediate team of managers first. Make sure they’re prepared to field questions. You might create an FAQ document to help them answer questions from employees, without having to ask you each time something comes up.
  3. Announce the sale in a company-wide meeting. Be honest, be clear, and focus on what it means for employees. Also, assume people will start recording whatever you say—so be careful about improvising.
  4. Provide written follow-up materials. An internal FAQ, email summary, or Wiki page will help reinforce key details. As an exercise, imagine people will forget 80% of what you initially share verbally. But coordinate with the buyer on language, since you’re no longer fully in charge; they may not want to have everything in writing.
  5. Introduce the new owner and address questions jointly. Share high-level answers to the two key questions: why you’re selling and what it means for employees.
  6. Continue communicating. The transition won’t be over in a day—keep employees informed throughout the process, and keep listening to their questions and concerns. Ideally, everyone can have a 1:1 meeting with their boss to ask questions they might not want to ask in public. Create a feedback loop so you know what managers are hearing.

Agencies usually wait ’til the deal is officially closed before telling the entire team. This makes it a “done deal” rather than a hypothetical. But you’ll need to do what makes sense for your culture.

Expect some challenges

No matter how well you communicate, expect some disruption. Productivity may dip initially, and some employees may leave—that’s normal. 

Selling your agency is a huge milestone, but it can feel like an earthquake for your employees. The best thing you can do to promote stability is to communicate honestly and transparently.

Focus on showing your employees why you’re selling and what it means for them. If you can answer their biggest questions, give them a reason to stay, and keep them informed, you’ll set the stage for a smooth transition.

Question: How do you plan to communicate that you’re selling your agency?

Add post to Blinklist Add post to Blogmarks Add post to del.icio.us Digg this! Add post to My Web 2.0 Add post to Newsvine Add post to Reddit Add post to Simpy Who's linking to this post?

Prepare now to sell your agency in the future (special guest Jonathan Baker): Agency Q&A with Karl Sakas 11 Mar 1:00 PM (last month)

See why your agency exit starts sooner than you think! Watch the 57-minute video from Agency Office Hours in March 2025. Click below to jump directly to each Q&A segment in the video, or listen in the background like a podcast.

[Free Template] Want to sell? Get free access to Karl’s Exit Plan template.

I spoke with special guest Jonathan Baker, M&A practice lead at Punctuation, on preparing for your agency exit.

Top Resources from the Live Event:

  1. What’s your agency Exit Strategy?
  2. Should you consider an Acqui-Hire exit for your agency?
  3. If you want to sell to a “search fund”
  4. Should you be front-end, back-end, or full-stack? ​​
  5. How much should you pay yourself as an agency owner?

Add post to Blinklist Add post to Blogmarks Add post to del.icio.us Digg this! Add post to My Web 2.0 Add post to Newsvine Add post to Reddit Add post to Simpy Who's linking to this post?

Should you consider an Acqui-Hire exit for your agency? 6 Mar 8:01 PM (last month)

If you’re an agency owner thinking about your exit strategy, you’ve probably envisioned selling your agency for a life-changing amount. But what if your EBITDA and other financials don’t support a high-multiple sale? Or what if you don’t want to go through years of restructuring and growth to make your agency more attractive to financially-minded buyers? That’s where an acqui-hire comes in.

With an acqui-hire, you’re not selling your agency in the traditional sense. Instead, you’re “selling” your reputation, book of business, and team. And the acquiring company is hiring you as an executive-level employee. This comes with pros and cons.

As for any big decision, consider these key questions: what’s your ideal outcome, what’s your minimum acceptable outcome, and what worst-case scenario do you want to avoid?

Acqui-hires are rarely a first-choice exit strategy—but for many agency owners, it’s the most practical way to cash out. This article will help you determine whether an acqui-hire is right for you and how to start navigating the process successfully.

1. What’s an acqui-hire exit?

An acqui-hire is a relatively small exit where the owners and their team go to work for the acquiring firm. The term is a portmanteau of “acquisition” + “hire.”

It will look and sound like a merger or acquisition to the public and other outsiders. The press release will say, “Firm ABC acquired agency XYZ.”

The difference is behind the scenes. Compared to a traditional exit, the outgoing owner receives a relatively modest payment from the acquirer. In my experience, acqui-hire payments rarely exceed $1 million. Smaller acqui-hires might involve payments of $500,000 or less.

The outgoing owner gets cash and a higher salary (plus keeping any excess cash from their former business). They usually negotiate a higher-paying job that’s closer to their liking. Sometimes, they might negotiate modest equity in the new firm if they see growth potential and are willing to give up some initial cash.

Acqui-hires are generally not the multi-million dollar exits that most agency owners envision. They likely won’t pay enough for you to retire permanently. But they might be the only viable option for a particular agency at a particular time.

2. When an acqui-hire might be the right move for your agency

Exiting via an acqui-hire makes sense when:

The alternative is seeking a financial buyer. They’ll likely be picky:

In contrast, a medium-sized agency might be quite happy to acqui-hire your smaller agency. Imagine the medium-sized agency is growing fast and they need to staff up:

Acqui-hire Anecdote: Loving not being the boss anymore

Jennifer ran her agency for over a decade and was exhausted from wearing all the hats. After an acqui-hire, she took on a leadership role in the acquiring agency and discovered she enjoyed not having to handle payroll, HR, and constant business development.

The contract required her to stay for two years to receive the full purchase amount, but she stayed for five years. Why? She was making more money and feeling less stressed. She also liked her new boss, who gave her a lot of autonomy in running the business.

This outcome was unusually positive. Most sellers don’t stay longer than the contract—and some leave early if they clash with their new boss.

3. Should you hire an M&A advisor for an acqui-hire?

When you’re on the acqui-hire track, you likely won’t hire a commission-based M&A advisor to conduct a full sell-side search—because traditional acquirers won’t like your financials. However, I recommend hiring an M&A specialist to provide narrower-scope advice.

Your lawyer, CPA, and business coach will also be involved. Since you’ll sell your agency just once, it’s worth getting advice from people who put your interests first.

Speaking of that, clarify confidentiality and conflicts of interest—especially if you’re talking to someone who hasn’t signed an NDA that puts you first. If you’re talking to the buyer’s advisor, assume that anything you say will get relayed to the buyer.

4. Key considerations before pursuing an acqui-hire exit

Before you start looking for an acquirer, ask yourself:

Acqui-hire Anecdote: Being “meh” on the new boss

Eric didn’t love or hate his new role; it just felt like a job. It reminded him of earlier in his career—but now he was more senior instead of a front-line individual contributor. He missed some aspects of running his own agency, but he liked the steady paycheck.

Eric negotiated a deal that doesn’t require him to stay to get the earnout, so he could theoretically leave at any time. However, he likes having the salary and health insurance. The new role isn’t quite what the acquirer promised, but he’s not in a hurry to leave.

5. Vetting the acquirer: Your new employer and your new boss

You’re not just selling your agency—you’re taking a new job. When you talk with the acquirer, think of them as a financial partner (in buying your agency) and as a boss (because you’ll be working for them).

Ask yourself:

Acqui-hire Anecdote: Hating your new boss

Lauren thought the acqui-hire would be a great fit—until she realized her new boss was a closed-minded micromanager. She missed being in charge and regretted not vetting her acquirer more closely.

She particularly regretted giving up her autonomy. A year later, she resigned, losing part of the earnout. It cost her six figures, but the peace of mind was worth it. She’s now self-employed as she considers her next move.

6. Finding and approaching potential acquirers

There isn’t a database of acqui-hire buyers. You can ask M&A advisors—and agency advisors like me—if they have a client who’d be interested in buying your firm. You might get some interest, but they don’t work for you. It’s like a job seeker reaching out to a contingent recruiter—the recruiter isn’t going to help right now unless they have a matching job requisition to fill.

As a result, you’re mostly on your own. But here are some places to look:

Making an approach tends to work best if the buyer brings it up first—for instance if a major client or partner agency asks if you’d ever consider joining them. This gives you more negotiating power than if you contact them first.

But eventually—if an acquirer hasn’t come to you, you’ll need to make the first move.

7. Negotiating the best acqui-hire terms

In M&A, the joke is that you get either the price you want or the terms you want—not both. Your results will depend on your negotiating position.

Here are points to consider if you don’t hire an M&A advisor directly. Most of these apply in any agency exit—but it’s more complicated when the acquirer doesn’t expect you to ramp down and be gone within a couple of years.

This isn’t a stock sale; the acquirer isn’t buying your corporate entity. That means you’re still on the hook to resolve any liabilities your current agency incurred. (But it also means you can keep excess cash in the current business, subject to your negotiations about working capital.)

That also means you must determine whether client contracts are “transferrable” to the new agency. Talk to your lawyer. Even if your MSA doesn’t include a transferability clause, some clients may be glad to move over if it means they keep working with you and your team.

8. Communicating the acqui-hire to your team, clients, and the industry

Plan on several layers of communication. You’ll tell your business advisors first (or perhaps your second-in-command), and then the rest of your employees, and then clients, and then the broader community.

Why that order of operations? It allows you to work out the details of your language through gradually larger audiences, in case you discover something that impacts the terms or timing of the deal.

Remember that you’ll need to coordinate with the buyer on what to say since you’re no longer fully in charge. Now, let’s look at communications with each stakeholder group.

Communicate to your team:

Be transparent but strategic. Look for ways to frame this as a growth opportunity for your team, but don’t promise things you can’t guarantee. It’s better to say, “I’m not sure,” or “I’ll get back to you” than to commit to something out of your control.

If applicable, acknowledge that not everyone will make the transition. Help those who aren’t joining find new roles. It’s the right thing to do, and people will remember this for a long time.

Want more advice on telling your team? I have a future article coming out later this month about how to tell your team you’re selling. Subscribe to my newsletter to get notified.

Communicate to your clients:

Frame the change as an acquisition because that’s how outsiders will see it. But focus more on them than you. Clients want to know, “What’s in it for me?” (WIIFM).

Reassure clients about continuity. Check contract transferability first to see how to navigate those conversations. Even if the contracts are transferable to the new firm, a poor transition process can make clients less likely to renew in the future, which can hurt your earnout.

Introduce clients to the acquiring company and their leadership. Odds are good that they’ll continue working with you and your current team, but they’ll want to meet your new boss(es). You may need to refer some of their questions to the acquirer.

Communicate to the broader industry:

Consider how this affects your reputation and personal brand. Seek to control the narrative. Even if an acqui-hire wasn’t your preferred exit, this is a new opportunity—not a failure.

Your joint press release will describe it as an acquisition, not an acqui-hire. The usual approach is for the press release to announce the merger (or acquisition), with quotes from you and the acquiring CEO talking about your excitement about the combination. The press release usually mentions your new title and how clients will benefit. Acquisition press releases are fairly templated; generative AI can help.

9. Common pitfalls to avoid in an acqui-hire exit

Watch out for these mistakes in agency acqui-hire exits:

10. Final thoughts: Is an acqui-hire exit right for you?

If you’re looking for a life-changing buyout, an acqui-hire exit likely isn’t your first choice. You wouldn’t be able to fully retire or start a new business following a short break. However, an acqui-hire might be the best option to help you move on to your next chapter.

Start planting the seeds now. That includes getting help reaching your goals. Want to see what it would take to scale your unique agency?

Question: Based on your circumstances, would you pursue an acqui-hire exit?

Add post to Blinklist Add post to Blogmarks Add post to del.icio.us Digg this! Add post to My Web 2.0 Add post to Newsvine Add post to Reddit Add post to Simpy Who's linking to this post?

Life after selling your agency: What’s next? 13 Feb 8:01 PM (2 months ago)

Selling your agency is a big deal. After years of hard work, you’ve reached a major milestone, both personally and professionally. But a big question looms: What comes next?

The transition from agency owner to “what’s next” isn’t just about financial planning or career pivots: it’s about redefining your identity, relationships, and lifestyle. This process can feel overwhelming, in part because there’s no “right” answer. But with intentional reflection and planning, this could become one of the most rewarding times of your life.

This article is your practical (and compassionate) guide to help you navigate life after selling your agency. Follow these steps to prepare for life after agency ownership:

  1. Reflect on your ideal future
  2. Plan for family and caregiving responsibilities
  3. Address health and aging considerations
  4. Refine (and redefine) your identity
  5. Revisit your living situation
  6. Create a financial plan for the long term
  7. Secure your legacy
  8. Protect your social and emotional well-being

Read on for details on each step. And if your exit is still years away, get my Control (and Maximize) Your Agency Exit on-demand training today to help you get there faster and more confidently.

1. Reflect on your ideal future

Before diving into the logistics, take time to envision your future. What do you want your life to look like? For years, your schedule and identity have revolved around running your agency. Now, you have the chance to start with a blank slate (or at least a semi-blank slate; the rest of your life is still there).

Ask yourself:

Consider your lifestyle goals:

These questions can help you start to outline your priorities and clarify what “success” looks like for this next chapter.

Facing writer’s block? Consider writing an Advance Retrospective about your ideal future; the free tool gives you a mix of structure and flexibility. And if you’re weighing two very different options, write an Advance Retrospective about both options. In my experience, you’ll likely enjoy writing one of them a lot more—which is usually a sign about which one to explore further.

2. Plan for family and caregiving responsibilities

Your family situation impacts your post-sale life, too. The money and freedom from your exit create new opportunities, but also require some new juggling.

These personal responsibilities aren’t just logistical—they’re emotional, too. Be realistic about how caregiving or family priorities will impact your time and energy in this new phase of life. Want to do a test run before you sell the agency? Consider taking a sabbatical to get a taste of what it’s like to be away from work.

3. Address health and aging considerations

Health impacts your post-sale life, too. If you’re in your 30s or 40s, you might have decades ahead to explore new ventures or hobbies. If you’re closer to retirement age, health challenges might impact your decisions.

Here are key questions to consider:

Coupled with time, your health is your least renewable resource. Now that you don’t have the “I don’t have time; I’m running the business” excuse, make a plan to prioritize your health in your post-agency life.

4. Refine (and redefine) your identity

Consider how you might redefine who you are. For many agency owners, their identity is tied to their role as CEO. After stepping away, it’s natural to feel a sense of loss or uncertainty about who you are without your business.

In the live edition of my exit-prep training, I surveyed participants about what they wanted do after their exit. Here’s how they responded:

Some agency owners report they want to start another agency. Others use their new chapter to try something new. If you want to work, hiring a life coach or career coach can help you navigate options.

As you explore your new identity, reflect on how your social circle might shift. Some sellers find it challenging to connect with friends or acquaintances who are still working full-time. You may need to seek out new communities or activities that align with this phase of life.

Speaking of communities, I recently interviewed Carl Smith at the Bureau of Digital about his post-agency life. He bought the Bureau and wound down his agency. Now, he helps 1,000+ agency leaders create better firms, through community and events.

5. Revisit your living situation

Selling your agency creates opportunities to change where and how you live. Ask yourself:

Your home is more than just a financial asset; it’s impacts your day-to-day lifestyle. Take time to evaluate how your housing aligns with your future goals, including whether you’ll need more or less space.

6. Create a financial plan for the long term

The proceeds from selling your agency can create significant financial freedom—but only if you plan carefully.

Some of your exit payments might be contingent, too. Say you received $4 million down, plus an earnout of an additional $2 million in the second year and a final $2 million in the third year. You might not receive the second or third payments. Don’t spend money you haven’t received; earnouts are never guaranteed.

Work with a financial planner to:

Proceed carefully if you don’t currently have a financial planner or want to change to someone new.

Also, consider the mindset shift from accumulation to spending. Many former business owners struggle with this transition—delaying retirement or avoiding large expenses because they’re used to building wealth rather than enjoying it.

A friend kept delaying his retirement from a job he’d grown to hate—until his financial planner pointed out that each extra year added almost nothing to his future income. He gave notice and retired… but didn’t tell most people right away, since he knew they’d start burying him in family and volunteer responsibilities.

7. Secure your legacy

For some, selling an agency is an opportunity to think about the legacy they want to leave behind. While this isn’t a priority for everyone, your exit creates a meaningful way to shape your future.

Some legacy-building options include:

Your legacy doesn’t have to be grand or public, although that’s certainly an option. It’s about creating something meaningful to you.

8. Protect your social and emotional well-being

Selling your agency is as much an emotional transition as a financial one. After years of high-stakes decision-making and constant activity, the slower pace may feel disorienting. You may also notice that people don’t call you for advice or help; it can sting to realize you’re more replaceable than you might have felt when you ran your agency.

Some strategies to support your emotional well-being include:

There are books and courses to help, too. I recently started reading Learning to Love Midlife: 12 Reasons Why Life Gets Better with Age by Chip Conley.

Conclusion: Your next chapter awaits

Life after selling your agency is full of possibility, but it requires thoughtful planning. You aren’t a billionaire but you have options beyond 95-99% of the general population.

From redefining your identity to managing finances, health, and relationships, this next phase is about creating a life that excites and fulfills you.

Remember, there’s no single “right” path after your agency exit—only the one that aligns with your values, priorities, and dreams. Take time to reflect, explore, and plan. Your best years may be just ahead.

What will your next chapter hold? Only you can decide—but the possibilities are endless. Congratulations!

Question: What’s your ideal life after you sell your agency?

Add post to Blinklist Add post to Blogmarks Add post to del.icio.us Digg this! Add post to My Web 2.0 Add post to Newsvine Add post to Reddit Add post to Simpy Who's linking to this post?

Writing a book to get clients (special guest Henry DeVries): Agency Q&A with Karl Sakas 11 Feb 12:42 PM (2 months ago)

Want to get clients by writing a book? Get insights via guest Henry DeVries from Indie Books International—in the February 2025 episode of Agency Office Hours with Karl Sakas. To “jump” to a specific Q&A segment, click the timecode links below.

I spoke with special guest Henry DeVries, the CEO of Indie Books International and author of Marketing With A Book For Agency Owners, on writing a book to strengthen your new business development pipeline.

Top Resources From the Live Event:

  1. One of Henry’s many books: “Marketing With A Book For Agency Owners: 22 Insights For Writing The Right Book To Find New Clients Now”
  2. Karl will be at Henry’s event, the Agency Rainmaker Forum, in San Diego on February 28 to March 1, 2025.
  3. Get Karl’s free Exit Plan Template to jumpstart your future planning today—your first step toward a smoother, more profitable agency exit.

Add post to Blinklist Add post to Blogmarks Add post to del.icio.us Digg this! Add post to My Web 2.0 Add post to Newsvine Add post to Reddit Add post to Simpy Who's linking to this post?

19 predictions for agencies in 2030, from agency industry veteran Karl Sakas in 2025 6 Feb 8:01 PM (2 months ago)

What will be different at agencies in 2030? Over the next five years, the answers could make—or cost—you millions of dollars.

First, there are no guarantees. But I’ve focused 100% on agencies since 2010. My colleague Diane has been in the industry for 40+ years. Nearly 30 years ago, my first freelance client was an agency. Our experience spans 600+ agencies on every inhabited continent. Like Farmer’s Insurance, we’ve seen a thing or two.

Second, evaluate how the 19 predictions apply to your agency. For most agencies, 3-5 predictions will make the biggest impact—so triage and focus on those. At the end of this article, I share a prioritization shortcut from my new book, Calm the Chaos. You’ll want to enlist your leadership team to help, since this is more than one person can handle alone.

Third, take action. Don’t get to 2030 and wish you’d acted more urgently. No one had answers when COVID started—but smart agencies pivoted fast. Get support from your leadership team and your advisors, and then do something.

What I predict in 2025 about agencies in 2030

I’ve separated my 19 predictions into six categories to make it easier for you to read the list. [Last updated: February 2025]

My predictions are a mix of good and bad, depending on where your agency is today and what you want from the future. Some may seem bleak while others will affirm your recent choices. Well-positioned and well-run agencies will get stronger… and mediocre agencies will struggle or fade away.

Client Expectations for Agencies in 2030

1. Clients continue pressuring agencies to cut costs.

Generative AI offers huge productivity gains. But it’s often really “cover” for cost-cutting.

Cost-cutting isn’t new; it’s gone on for hundreds of years. That includes the shift from individual artisans to assembly lines in the 19th century, time-and-motion efficiency experts trying to build widgets faster in the early 20th century, corporate consolidation and layoffs in the second half of the 20th century, and the accelerating information age in the early 21st century.

AI is an especially visible solution for cost-cutting. It’s like eating at Waffle House—yes, there’s often employee drama, but that’s not unique to the 24/7 diner; you just happen to see it because employees aren’t hidden in the kitchen.

This requires a complex combination of solutions. But for many agencies, they’ll switch agency models—from full-stack to front-end. Or if they continue to be a full-stack agency, they might increasingly outsource fulfillment to lower-cost countries.

2. Clients hire agencies instead of adding paid staff.

As companies continue to eliminate middle management layers, corporate employees are pressured to do more with less. This often means using individual contractors and agencies to get things done without justifying headcount to the CFO.

If you play your cards right, this can help you grow. But you’ll need a clear value proposition and potentially different hiring to build a “staff augmentation” team.

3. Agencies train clients that take work in-house.

If clients are going to do it anyway, you might as well get paid to help clients take things in-house. It also tends to take longer than you or they expect.

I worked at an agency that recommended for years that a particular client take things in-house. They finally agreed, with a retainer to handle training and coaching. However, the transition took another two years to complete, and my agency was paid the whole time. You can also charge to help recruit people for the client.

Agency Business Models & Growth Strategy in 2030

4. Agency owners question whether to continue owning an agency.

In my work across 600+ firms, rarely does anyone ask, “Should I own an agency?” It sometimes comes up as people consider whether to sell the agency to do something solo, especially if they don’t like managing people. But it’s rarely something people ask themselves before they start their agency.

For me, the first time was when a British ex-pat in Thailand booked a one-off ActionPath consulting call. His biggest freelance client offered to help him start an agency, and he was asking whether he should do it. I asked if he wanted to run an agency and summarized the pros and cons.

It’s hard to answer that question honestly once you have the agency income and infrastructure, even if they also involve debt, Wet Twine employees, and other headaches.

5. Industry consolidation accelerates.

When I was an equity research analyst, companies were always merging in search of higher profit margins. Although mergers often go poorly, that doesn’t stop people from trying.

As agency owners grow their EBITDA (or realize it won’t grow further without major effort), they’re inclined to sell. If you’re ready to sell, this can be lucrative for you and your leadership team. If you’re not prepared, you might miss the boat.

Unless an employee is a superstar who can write their own ticket, consolidation doesn’t bode well for “redundant” roles: sales and operations. But it’s likely helpful for people who join the leadership teams at acquisition-oriented agencies and investment firms.

6. Deeper agency specialization.

In a scarcity economy, most clients want specialists who know their industry. If you need heart surgery, you don’t want just any surgeon. You want the cardiac surgeon who has done your procedure 500 or 1,000 times before.

Shifting back to agencies, specialized expertise will be all the more important as AI models churn out low-quality marketing. Every client needs expertise; smart clients want it.

Semi-related, agencies won’t be called “digital” any more. Most people believe this already in 2025; we just haven’t found a new name for them yet. But we’ll have that largely sorted out in five years.

Agency Pricing & Services in 2030

7. AI creates new agency revenue streams.

Instead of solely replacing human work, AI will open up new services that agencies can monetize.

Your opportunity? Don’t just use AI to be more efficient; package it as a new high-margin service. CMOs want agencies to lead on AI.

Looking for new ideas and ways to up-level your team when it comes to using AI? Join me in San Francisco at AI & Your Agency 2025, for insights on both topics: using AI for clients and using AI for operations.

8. More performance-based contracts.

If you’re good at what you do, you might consider putting some of your clients on performance-based contracts. This would be true value-based pricing rather than the easier-to-do value-anchoring. If you make them an extra $1 million, you might get a base fee plus 10% of the increase. And if it’s an additional $5 million, you’re getting a percentage of that bigger number.

I wouldn’t shift 100% of your clients to performance-based contracts, but start looking at who’s a match. And then read Pricing Creativity by Blair Enns for advice on how to make it happen.

If your current services don’t lend themselves to performance-based incentives, it may be a sign that you want to add new services that are “closer to [client] revenue.” The same is true if you’re charging on a Time & Materials basis.

9. Time & Materials (hourly) pricing disappears.

Before the growth of AI, I was relatively agnostic on hourly pricing. Time & Materials doesn’t capture efficiencies like milestone (deliverable-based) pricing, but it matched what a lot of what agencies’ clients wanted. And it’s easier to fix scope creep in your existing milestone or hourly pricing model than it is to jump to value-based pricing.

AI killed hourly pricing. Once you’ve invested to build a custom model, you can accomplish a lot of marketing, creative, and technical work in a fraction of the time. Under hourly, you just charge for the hour it took to accomplish the task—not for the dozens or hundreds of hours it took to build the model.

Agencies might continue hourly pricing for things like post-launch website maintenance. But it’s a bad idea for new projects or ongoing in-depth retainers.

10. Implementation services continue racing to the bottom.

Clients have always valued strategy more than implementation. The problem for agency revenue growth is that clients aren’t going to sign strategy retainers. Each client shouldn’t need a new strategy every month.

This might lead to your splitting-out strategy work into separate projects. Then, you hire implementation-oriented agencies (white label or back-end agencies) to handle fulfillment, where you oversee the work as a front-end agency. Clients might sometimes hire the outsourced agency directly, but that assumes they can competently supervise the work.

11. Driving revenue via owned media.

Instead of just a lead-generation tool, agencies will turn their owned media into stand-alone profit centers.

Look at your content and audience as an asset—can you monetize it beyond client work?

Agency Staffing in 2030

12. It’ll be hard to find high-quality mid-career employees.

I’m a fan of remote work, and my own business is 100% remote. I sense that lots of the corporate “return to office” (RTO) mandates seem to be about control-freak bosses, corporate real estate commitments, and companies thinking in-person will fix a drop in profit margins. But the RTO promoters are right about one thing: it’s harder for early-career employees to develop remotely versus in-person.

Those who graduated from college during COVID in 2020 will have 10 years of work experience in 2030. But will it be the experience your agency needs? And will they want to work for you? This will be even more stark for senior employees.

13. Senior team members prefer to work fractionally.

I suspect employees will increasingly start in person and move remotely as soon as their career growth supports it. As 2025’s mid-career employees become [more] senior employees in 2030, will they want to work full-time at a single agency?

Agency life is hard. Not everyone wants to ride the roller coaster. If a fractional executive has a dysfunctional client, the executive can move on—whereas they’re stuck for a while if the dysfunctional organization produced 100% of their income.

This may requires shifts to your team structure, too. Look at what’s working now and what might “break” based on these predictions.

14. Agencies poach in-house talent, thanks to remote and hybrid work.

Consider three current trends: continued growth in corporate RTO, agencies paying a relative “discount” on salaries compared to in-house roles, and workers saying they’d take a salary haircut to be fully remote.

These will combine to create a labor arbitrage opportunity: by offering hybrid or fully remote work, your agency can afford to hire great employees who’d otherwise be in-house.

You’ll still need to pay fairly—or more than fairly, if you want superstars. But you might be able to hire people who wouldn’t have joined you before.

15. Employees will start unionizing.

Unionization likely won’t succeed during the current U.S. administration, but politics are cyclical. As the joke goes, “Companies that deserve unions usually get them.”

You’ll probably be fine if you treat employees fairly—and Millennial Managers help Gen Z employees find meaning in their work. If you’ve delighted in using downturns to squeeze employees, you’ll probably get a union. Or perhaps people will quit, rather than engage.

Agency Business Development & GTM in 2030

16. More self-marketing via live thought leadership.

As you consider your go-to-market (GTM) strategy, this includes in-person speaking and human guests on podcasts. Your prospective clients need answers to questions. However, some questions are too important to trust AI. They’re more likely to hire someone they heard at a live event or [recorded] live on a podcast.

I want my doctor to use AI to help them make diagnoses, but I don’t want the AI to make a diagnosis with zero human intervention. That might change in the more distant future, but probably not between now and 2030.

If you want to do more speaking or podcast guesting, get a copy of my first book, The In-Demand Marketing Agency: How to Use Public Speaking to Become an Agency of Choice. The tech recommendations (from 2015) are outdated, but the rest still apply.

17. Shift to “owned” media for self-marketing.

Plenty of articles have discussed the dangers of building on “rented” ground (like marketing via TikTok if the platform gets banned in the U.S.), and paid advertising will become noisier.

My marketing strategy is to share useful advice and then encourage people to join my email list. If you aren’t getting the tips, please subscribe; more than one agency leader has called it “the only email [they] read every time.”

For a framework to help you customize this to your agency, check out Gini Dietrich’s PESO Model® (Paid, Earned, Shared, Owned).

Earned media will continue to have potential but it’ll be hard without journalist relationships. As I shared via 4As, WSJ editor Suzanne Vranica has 72,000+ unread emails.

Agency Operations in 2030

18. AI will finally improve accurate resource-planning projections.

You probably use several different tools to run your agency—PM software, accounting, resource management, and more. Over the next five years, someone will find a way to tie together your systems to provide truly actionable insights.

Imagine an AI system fed with real-time data on your staffing, client work, sales pipeline, and more. Several companies offer the promise of that today. In 2030, it’ll all come together—either as single software, or as middleware that ties things together across multiple systems. Hopefully, they’ll also automate data compliance, instead of your PMs needing to remind people about their timesheets.

19. More DIY business advice via agency communities.

Regarding business advice about agency growth, leaders will continue to hire agency advisors. However, a growing part of the market will rely on DIY solutions for business advice.

This includes leaders asking AI tools for advice—and joining agency communities and associations like 4As, Bureau of Digital, Grow Your Agency, Nostos Network, and SoDA. If you’re in a storm, sticking together’s usually better than spreading out.

Recap of Karl Sakas’ 19 predictions for agencies in 2030

Here are my 19 predictions in a single list, summarizing the detailed version above.

  1. Clients continue pressuring agencies to cut costs.
  2. Clients hire agencies instead of adding paid staff.
  3. Agencies train clients that take work in-house.
  4. Agency owners question whether to continue owning an agency.
  5. Industry consolidation accelerates.
  6. Deeper agency specialization.
  7. AI creates new agency revenue streams.
  8. More performance-based contracts.
  9. Time & Materials (hourly) pricing disappears.
  10. Implementation services continue racing to the bottom.
  11. Driving revenue via owned media.
  12. It’ll be hard to find high-quality mid-career employees.
  13. Senior team members prefer to work fractionally.
  14. Agencies poach in-house talent, thanks to remote and hybrid work.
  15. Employees will start unionizing.
  16. More self-marketing via live thought leadership.
  17. Shift to “owned” media for self-marketing.
  18. AI will finally improve accurate resource-planning projections.
  19. More DIY business advice via agency communities.

OK, so what now?

How to prepare your agency: What next

Are you wondering what might happen that’s unique to your industry focus, but you’re not where to even start? Break through strategy writer’s block with this framework via Pete Caputa and his team at Databox. And don’t do it alone; rally your leadership team to help.

Triage the list

When it comes to risk management, I suggest looking at angles that I share in my Calm the Chaos book:

  1. What’s most likely to happen?
  2. What might not be as likely to happen, but would be catastrophic if it did?
  3. What if things go extremely well?

If one of my predictions is unlikely—but it would have a huge negative impact on your agency if it comes true—you probably want to create a contingency plan. That also includes preparing for things to go extremely well; that becomes its own kind of problem.

Focus on strong positioning and execution

Rather than big firms dominating, specialist agencies with deep niche expertise will command premium fees—especially as AI commoditizes generalist marketing.

Be bold. If you dare to make some tough choices now and over the next five years, you’ll be ready for what’s next.

Get my help at your agency

Want my expert help preparing for your agency’s unique future? Strengthen your agency today to give yourself extra runway. Check out my Agency Growth Diagnostic and then get in touch. You’ll get custom advice within 4-6 weeks of kickoff so you can start preparing for 2025 and 2030.

Want more advice on what to do about the predictions? Watch the video Q&A recap from my Agency Office Hours discussion.

Question: What else do you predict about agencies in 2030?

Add post to Blinklist Add post to Blogmarks Add post to del.icio.us Digg this! Add post to My Web 2.0 Add post to Newsvine Add post to Reddit Add post to Simpy Who's linking to this post?

[Guide] How to acquire another agency 23 Jan 8:01 PM (2 months ago)

Are you considering acquiring another agency? Whether you want to grow quickly, diversify your service offerings, or enter a new market, buying an agency can help you achieve your goals faster than organic growth alone. But as with any significant business decision, there are risks. The key is to approach acquisitions strategically and methodically.

Several agency owners have asked me to share advice on acquiring another agency. This can be a good way to grow revenue by accessing clients and skillsets you don’t currently have. However, it can also go poorly and waste your time and money. Be willing to walk away, and prepare for inevitable integration challenges.

How can you get better results if you want to acquire another agency? Read on for a thorough (but not exhaustive) guide about points to consider! Pour yourself a beverage; this is 3,500+ words.

1. Clarify Your Acquisition Strategy

Before reaching out to potential targets, take a step back and ask yourself: Why do I want to acquire another agency?

Your goals will determine your approach. Are you looking to:

This drives whether you’re doing a self-funded acquisition (e.g., an acqui-hire that might require just $500K down) versus something that requires a bank loan (e.g., an SBA 7(a) loan for up to $5 million) or something that requires institutional financing (which is beyond the scope of this article).

Also, read my advice on receiving unsolicited acquisition offers. It will help you imagine yourself in their shoes.

Define your criteria and get additional guidance

Once you’ve clarified your goals, define your criteria for potential targets. Consider factors like revenue size, EBITDA size, team size, service offerings, and client profile. This clarity will save you time and energy as you evaluate opportunities.

The book Buy, Then Build by Walker Deibel digs deeper into profiling your ideal acquisition target—and about organizing the entire process. It’s worth a read. You can also get advice via events, like the Entrepreneurship Through Acquisition (ETA) conference in Chicago—which recently drew 1,000 attendees.

Acquirers value agencies based on their adjusted EBITDA (net profit, plus and minus some adjustments). See my on-demand training for recent EBITDA multiple ranges—and consult with an M&A advisor on how far your budget might go. This also includes creative financing options, since few acquirers pay 100% down.

What’s your investment thesis?

Eventually, you’ll write an investment thesis. This describes what you’re looking for, to help you make “fast fail” decisions about acquisition targets. For instance, your thesis might be:

We will acquire a retainer-oriented agency that generates less than 10% of revenue from digital services to create cross-sell potential with its existing client base.

Or perhaps:

Acquire an agency with a maximum of $500K in EBITDA (assume a valuation of up to 3X multiple) and a strong XYZ team.

Or, be even more specific:

Acquire an agency with 20+ employees specializing in the ABC industry (with at least two blue chip clients in their portfolio) to kickstart our expansion into the industry, while adding at least $1 million in EBITDA to support our future exit.

The thesis makes it easier to enlist others to help since they can quickly decide whether it’s worth an intro.

2. Build Your Acquisition Pipeline

Identifying the right agency to acquire can take time. Start by building a pipeline of potential acquisition targets:

Look for signs that an agency might be open to acquisition. Owners experiencing burnout or exploring retirement are often more receptive to offers, especially if they’ve received unsolicited interest in the past. Their tenure might be an indicator, too; if they’re hitting 10, 20, or 30 years in business, they might be thinking about next steps.

Buyer beware: Brokers cost money but add expertise

As mentioned above, some people skip working with a broker. This can be penny-wise, pound-foolish. As I share in the Control (and Maximize) Your Agency Exit training, there’s usually just one broker during an agency exit (versus two brokers when you buy or sell a house). If you hire them, you’ll pay their fee… but that also means they work for you instead of the other party.

You should hire an M&A advisor at this point or soon—especially if this is the first time you’ve bought another agency. You need someone who’s done this before. At the latest ETA Conference, an attorney mentioned he wished acquirers had asked for his firm’s advice before sending the Letter of Intent (LOI)… because they made mistakes in the LOI that are now difficult to unwind without killing the deal.

3. Reach Out to Acquisition Prospects

Once you’ve identified a promising target, it’s time to reach out. Should you take a narrow approach (asking for warm intros) or a broad approach (cold-emailing many people)? I’d lean toward a narrow approach, but I’m also not urgently seeking to acquire a firm ASAP.

If you’re going cold, track down their email address or send a LinkedIn “In” message. If you don’t have it already, it’s probably time to upgrade to a paid LinkedIn account.

You can also contact prospective sellers via listings at broker websites or broker aggregators like BizBuySell and BusinessBroker.net. But expect more vetting (of you) before you can talk to the seller. And the broker might push you to buy their other listings.

Build a relationship

Seek to build rapport with the agency owner. Remember, this is likely a deeply personal decision for them. They’ve poured years of effort into building their agency, and they’ll want to feel confident that you’re the right person to sell to. Compliment what you like about their agency.

Ideally, frame the acquisition as a partnership rather than a mere transaction. Once you get on a call, share your vision for the future and how their agency fits into it. Ask questions. Be transparent about your intentions and take the time to listen to their priorities. Many sellers care deeply about preserving their agency’s legacy, caring for their team, and ensuring a smooth transition for their clients. Address these concerns early to build trust.

In your outreach, reinforce your seriousness—including how you have (or where you’d get) funding. Anyone can “say” they want to buy, but not everyone has money. If someone asks me if I know anyone who wants to sell, I’m curious how they’re funded; I don’t want to waste my clients’ time on intros to unqualified buyers. Volunteer your funding plans—including if you’re self-funded, pre-qualified for an SBA 7(a) loan, intend to get an SBA loan, or have other access to capital.

Prepare for hiccups

Be ready for acquisition targets to drop out. This can happen after the initial conversation, when it’s time to sign an NDA, or when it’s time to start due diligence.

A client received a cold pitch to sell his agency. You probably get those all the time. Yet this was a legitimate outreach; the acquirer was buying agencies. But as he talked to them—and even flew to their headquarters to get to know them better—they clearly had a very different culture. His team wouldn’t stick around, and he’d be antsy to leave ASAP, too. He backed out before getting to an LOI.

4. Evaluate the Agency’s Fit

Acquisitions are as much about the right fit as they are about financials. Once you’ve established mutual interest—including sending your LOI—it’s time to dig deeper through due diligence. This is a complex process; you’ll want to enlist an experienced CPA, M&A advisor, and/or others.

In his excellent primer, Selling Your Professional Services Firm, agency advisor David C. Baker notes that a quick “courtship” can lead to a painful due diligence process. In contrast, a longer preliminary process (e.g., more conversations before finalizing the terms) can go more smoothly in the end because the acquirer took the time upfront to see if things are truly a match.

Do the due diligence

At a high level, here are key areas to evaluate during due diligence:

A seller who has prepared their agency for acquisition (clean financials, well-documented processes, incentives to retain key employees, etc.) will make the transition much smoother. If they’re working with a broker, they’re more likely to be ready than a “for sale by owner” that you cold-pitched.

Your strongest negotiating power is your willingness to walk away. You might find serious concerns during due diligence—or maybe several medium-sized concerns. Don’t be afraid to walk away if red flags emerge during due diligence. But it’ll be harder due to the “sunk cost fallacy“—because you’ve invested time and money into the process.

5. Structure the Deal

Once you decide to move forward, it’s time to structure the deal. Again, consult an M&A advisor and your lawyer. But at a high level… there are several ways to approach this:

Negotiations should address more than just the price; terms are important, too. Consider terms like:

Money is important but sellers often care about more than money. Show them that you value their legacy and are committed—within reason—to preserving what they’ve built. But be sure you’re getting an appropriate discount or other concessions; if they expect you to treat the company like a static monument, that limits your ability to make improvements.

6. Create an Integration & Transition Plan

The real work begins after the deal is signed. A well-executed transition plan is critical to retaining clients, employees, and the value of the acquired agency. And the flip side—a poor integration—will lead to expensive departures and lots of stress.

You’ll pre-negotiate the seller’s involvement during the transition period. If it’s a two-year term, perhaps they’re full-time for a year as they focus on business development, thought leadership, and client renewals. Then they’re part-time for a year, referring sales leads to you or a full-time salesperson. After that, they might receive a referral fee for sales leads but no ongoing salary or benefits. This is all negotiable; you’ll need to determine what’s right for you and them.

Try to put yourself into the shoes of people at the acquired firm. I mentioned the client whose integration had gone poorly two years before I started working with them. When I spoke with employees at the acquired firm, they described feeling like they were the “loser” in the deal. The new CEO only visited their office when something went wrong; they hadn’t kept any of their old software platforms, and they now had to operate in the acquirer’s time zone, which required extra thinking every time they sent a calendar invite.

7. Mitigate Risks and Challenges

Acquisitions are inherently risky because sellers have an incentive to downplay or even hide problems. Even if someone is generally honest, they likely won’t disclose everything about running their business. (Acquisitions are risky for sellers, too; as a buyer, what if you can’t pay?)

In my work advising agencies, there are always post-acquisition surprises. If you’ve invested more time in the “get to know you” and due diligence process, those surprises tend to be smaller. If you’ve moved fast—and haven’t gotten to know the seller’s character or have ignored concerns about their character—the surprises tend to be bigger.

It helps to work with someone who’s been there before—but here are some risks to watch for and manage:

Schedule regular check-ins with key stakeholders. These can help you identify and address problems before they get worse. Ideally, you expand your leadership team to include new employees, too.

8. Measure Success Post-Acquisition

How will you know if the acquisition is successful? Beyond how it all feels, plan to track key metrics like this:

Schedule debriefs at 30, 90, and 180 days to evaluate progress and adjust your strategy. Stay flexible; integration is an iterative process, and unexpected challenges are inevitable. You—and the seller—probably want to schedule some PTO for after the deal closes.

Conclusion: How to Buy Another Agency

Buying another agency can be an effective way to grow your business, but it requires careful planning and execution. To increase your odds of success, clarify your goals, build a pipeline of potential acquisition targets, get to know the sellers, conduct thorough due diligence, and prioritize a smooth transition.

Ready to explore agency acquisitions?

Question: What goals would you accomplish by acquiring another agency?

Add post to Blinklist Add post to Blogmarks Add post to del.icio.us Digg this! Add post to My Web 2.0 Add post to Newsvine Add post to Reddit Add post to Simpy Who's linking to this post?

Life after agency ownership (special guest Carl Smith of the Bureau): Agency Q&A with Karl Sakas 14 Jan 12:32 PM (3 months ago)

Are you wondering about life after owning an agency? Get insights from guest Carl Smith on his experience on life after agency ownership—in the January 2025 episode of Agency Office Hours with Karl Sakas. Click below to jump directly to each Q&A segment in the video, or listen in the background like a podcast.

I interviewed special guest Carl Smith. He leads the Bureau of Digital, an amazing community for agencies that I’ve followed since 2014. We talked about life after agency owners, current trends across 1,000+ agencies, and whether the grass is greener:

Top resources from the live event:

  1. The Pause Clause
  2. Worried about going on leave? Do a Stress Test (or two) first!
  3. Get a free copy of Karl’s agency Exit Plan template
  4. Someone asks to buy your agency. What should you do next?
  5. Industry Niching Led This Agency to 6X Growth… and from 7-Figures to 8-Figures in Revenue

Add post to Blinklist Add post to Blogmarks Add post to del.icio.us Digg this! Add post to My Web 2.0 Add post to Newsvine Add post to Reddit Add post to Simpy Who's linking to this post?

Account growth, hourly vs. fixed pricing, and speeding the sales process: Agency Q&A with Karl Sakas 10 Dec 2024 1:13 PM (4 months ago)

Get insights on creating more predictable account growth, how to shift away from hourly pricing, and how to get clients to buy faster (with guest Jenny Plant—in the December 2024 episode of Agency Office Hours with Karl Sakas. To “jump” to a specific Q&A segment, click the timecode links below.

First, I interviewed Jenny Plant from Account Management Skills, on how to create predictable account growth.

Wondering how your agency compares… but don’t want to ask your direct competitors how they’re doing? We’ve partnered again with Databox, for The State of Client-Agency Collaboration survey.

Then, I shared advice on pricing models (including how to move away from hourly pricing), and how to get sales prospects to move faster.

Top Resources from the live event:

  1. Raise Prices at Your Agency with this Step-by-Step Approach
  2. Not doing that thing? You need Desire, Competence, and Capacity.
  3. New client CEO or CMO? We can predict what’ll happen next.
  4. Is your agency prepared for the next recession?
  5. Want to get paid to create a proposal? Time for Paid Discovery!
  6. Step-by-step advice to create a “Fast-Failure” Sales Process

Add post to Blinklist Add post to Blogmarks Add post to del.icio.us Digg this! Add post to My Web 2.0 Add post to Newsvine Add post to Reddit Add post to Simpy Who's linking to this post?