Creative Agency Success Show

By: Summit Virtual CFO by Anders
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  • Summary

  • Has your business scaled beyond $1 million in annual revenue? Do you employ a staff of 20 or more people? If so, you've likely experienced a whirlwind of highs and lows that come with growth. You're not alone in your journey. Since 2002, Summit CPA Group, now Summit Virtual CFO Services by Anders, has helped businesses and creative agencies across America and the globe by providing Virtual CFO Services, cash flow management, business tax planning, financial forecasting, and much more. We've also performed hundreds of 401(k) audits and provided CPA firms with accounting outsourcing services and Virtual CFO consulting. This podcast seeks to help service-based business owners dive deep into the financial side of their business to achieve growth and financial success. Tune in bi-weekly as our hosts—Jamie Nau, Director + Virtual CFO, and Jody Grunden, Partner at Anders CPAs + Advisors—interview special guests to share knowledge in the digital and creative agency industry, as well as Jody’s experience as a service-based business owner and entrepreneur.
    2023 Summit Virtual CFO by Anders
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Economics Leadership
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Episodes
  • Navigating Mergers and Acquisitions in Creative Agencies with Jonathan Baker

    Navigating Mergers and Acquisitions in Creative Agencies with Jonathan Baker
    Nov 18 2024
    “We try to help the sellers understand what the buyer's long-term vision is, what changes they expect to make, and over what period of time, because all of these things have implications on the business but also on emotions.” – Jonathan Baker The finer details of this episode:Overview of mergers and acquisitions (M&A) in the creative agency sector.Importance of preparation for agency owners considering M&A.Insights on valuation factors influencing agency sales.Discussion on the current M&A landscape and market trends.The significance of maintaining clean financial records for M&A readiness.Exploration of deal structures and their implications, including Employee Stock Ownership Plans (ESOPs).The role of agency owners post-acquisition and the need for clear communication with buyers.Timing considerations for initiating the M&A process.The impact of economic changes on agency valuations and buyer interest.Recommendations for agency owners to proactively prepare for potential sales. Episode resources:Summit Virtual CFO by Anders website: https://www.summitcpa.net/Love our content? Sign up for our newsletter: https://www.summitcpa.net/summit-newsletterDigital Dollars and Cents: A Virtual CFO’s Playbook to help Digital Companies Create a Financial Roadmap to Success, is now an audio book! Download it here: https://vcfo.summitcpa.net/ddcConnect with Jonathan here: https://www.linkedin.com/in/jonathandavidbaker/Check out Punctuation here: https://punctuation.com/ Timestamps: Welcome to the Creative Agency Success Show (00:00:00)Introduction to the podcast's purpose and focus on agency owners looking to scale. Discussion on M&A Preparation (00:00:15)Insights from Jonathan Baker about the importance of preparation for mergers and acquisitions. M&A Landscape Insights (00:00:39)Hannah reflects on the evolving trends in the M&A landscape and its implications for clients. Importance of Understanding M&A (00:01:13)Discussion on how understanding the M&A process can aid clients in their decision-making. Preparation Equals Easier Transition (00:01:39)Jimmy emphasizes that being well-prepared leads to a smoother M&A process and better outcomes. Introduction of Jonathan Baker (00:02:52)Jonathan Baker shares his background and expertise in helping firms prepare for M&A. Jonathan's M&A Journey (00:04:07)Jonathan recounts his personal experience with M&A, highlighting its complexities and emotional aspects. Valuation Nuances in M&A (00:06:19)Discussion on non-financial factors influencing valuation in the M&A process. Timing for M&A Conversations (00:07:51)Jonathan advises when clients should start preparing for M&A, ideally 3-4 years in advance. Post-Sale Involvement (00:09:22)Exploration of the buyer's perspective on post-sale involvement and its implications for sellers. Preventative Maintenance in M&A (00:11:33)Strategies to help owners navigate the transition and maintain business integrity post-acquisition. Deal Structure Non-Negotiables (00:14:01)Jonathan outlines his strong recommendations against certain deal structures, particularly ESOPs. Understanding ESOP Risks (00:15:07)Discussion on the potential pitfalls of employee stock ownership plans (ESOPs) in M&A. Navigating ESOP to M&A (00:18:01)Jonathan shares the challenges and processes of transitioning from an ESOP to an M&A deal. Preparing for M&A (00:19:11)Advice on steps companies should take to prepare for a potential acquisition. Importance of Accurate Financials (00:21:20)Emphasis on maintaining clean financials to facilitate smoother due diligence during M&A. Understanding Accrual Basis Accounting (00:22:01)Importance of running financials on an accrual basis for effective M&A preparation. Trends in M&A Post-COVID (00:22:57)Discussion on inflated valuations post-COVID and current market dynamics affecting M&A. Current Market Conditions for Sellers (00:24:24)Analysis of the current M&A landscape and advice for potential sellers. The COVID Boom and M&A Opportunities (00:24:49)Reflections on the opportunities presented during the COVID boom for agencies. Fun Question About Brewery Towns (00:25:17)A light-hearted discussion on top microbrewery towns in the U.S. Cultural Significance of Local Breweries (00:26:26)Exploration of how local breweries reflect community identity and culture. Contacting Jonathan for M&A Insights (00:27:54)Information on how listeners can reach out for M&A advice and brewery recommendations. Conclusion of the Episode (00:28:05)Wrap-up of the episode and appreciation for Jonathan’s insights on M&A.
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    29 mins
  • Unlocking Exit Readiness: How to Prepare Your Agency for a Successful Sale with Phil Daniels

    Unlocking Exit Readiness: How to Prepare Your Agency for a Successful Sale with Phil Daniels
    Nov 4 2024
    “It's never too early to start planning because you never know when that end is going to be. Operate with optimism. There's a lot of activity that's really unprecedented in the industry right now, and I think for the years ahead, it's going to be very good for agency owners who build really solid, predictable, nice operating practices.” – Phil Daniels The finer details of this episode:Overview of mergers and acquisitions (M&A) in the agency sector.Insights on exit readiness for agency owners.Discussion of motivations for agency owners considering a sale.Current trends in the M&A market and their implications.Importance of a strong management team in enhancing agency value.Evolving dynamics of purchase agreements and deal structures.The role of private equity in the agency landscape and common misconceptions.Strategies for presenting a compelling narrative to potential buyers.Importance of early planning and preparation for agency sales.Common pitfalls during the due diligence process and how to avoid them. Episode resources:Summit Virtual CFO by Anders website: https://www.summitcpa.net/Love our content? Sign up for our newsletter: https://www.summitcpa.net/summit-newsletterDigital Dollars and Cents: A Virtual CFO’s Playbook to help Digital Companies Create a Financial Roadmap to Success, is now an audio book! Download it here: https://vcfo.summitcpa.net/ddcConnect with Phil here: https://www.linkedin.com/in/phillipdaniels/Check out Season Advisors here: https://seasonadvisors.com/ Timestamps:Welcome to the Show (00:00:00)Introduction to the "Creative Agency Success Show" and its focus on helping agency owners. Discussion of Topics (00:00:14)Overview of the episode's topics: mergers & acquisitions and basketball, highlighting guest Phil Daniels. Phil Daniels Introduction (00:01:20)Phil shares his background in M&A and agency ownership, setting the stage for his insights. Early Career in M&A (00:01:35)Phil discusses starting his career at JP Morgan, focusing on acquiring and integrating businesses. Transition to Agency Ownership (00:02:20)Phil recounts his journey to starting his own agency, motivated by low barriers to entry. Agency Sales Experience (00:03:22)Phil explains his experience with agency sales, emphasizing the emotional aspects of selling. Motivations for Selling (00:04:46)Phil explores various reasons agency owners consider selling, including burnout and lack of succession planning. Exit Readiness Concept (00:07:18)Phil introduces the idea of exit readiness, emphasizing the importance of preparation before selling. Trends in Purchase Agreements (00:09:34)Discussion on recent trends in M&A agreements, including structure and incentives for sellers. Incentivized Buyouts (00:10:57)Phil talks about the common structure of incentivized buyouts and the importance of owner involvement post-sale. Valuation Gaps in Sales (00:12:19)Challenges in aligning seller expectations with buyer valuations, and strategies to bridge gaps. Timing for Cleaning Up Books (00:15:11)Phil advises on the optimal timeline for preparing financials before selling an agency. M&A as a Marathon (00:16:39)Discussion on the lengthy and complex nature of the M&A process for agency owners. Private Equity Perspectives (00:17:18)Phil shares insights on agency attitudes toward private equity investments and their implications. Private Equity in Agency M&A (00:17:24)Discussion on the impact of private equity in agency valuations and the changing landscape of M&A. Understanding Buyer Types (00:18:09)Exploring different types of buyers, including private equity, family offices, and strategic buyers, and their implications. Owner Objectives and Planning (00:18:58)The importance of understanding owner objectives when considering potential buyers and planning for agency sales. Strategic Buyers vs. Financial Buyers (00:20:10)Ranking the desirability of strategic buyers over financial buyers in agency sales. Management Team Retention Strategies (00:21:39)Ways to incentivize management teams to stay through the transition during an agency sale. Common Due Diligence Pitfalls (00:22:50)Identifying key reasons why due diligence fails, focusing on net working capital and owner dependency. Phil's Experience as an NBA Ballboy (00:24:39)Phil shares memorable experiences from his time as a ballboy for the Indiana Pacers. Michael Jordan's Comeback Game (00:26:47)Phil recounts witnessing Michael Jordan's return to the NBA and the unforgettable moments that followed. Final Thoughts on M&A (00:33:30)Phil emphasizes optimism in the current M&A landscape for agency owners and shares contact information. Planning for Agency Sales (00:34:22)Phil emphasizes the importance of early planning for agency sales, as circumstances can change unexpectedly. Eliminating Add Backs (00:35:10)The discussion highlights the negative perception of add backs by investors and the benefits of clean financials. Importance of Due Diligence...
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    36 mins
  • Spooktacular Showdown: A Halloween Movie Draft Special

    Spooktacular Showdown: A Halloween Movie Draft Special
    Oct 31 2024

    In this special episode of The Creative Agency Success Show, four speakers with Halloween-themed personas—Jamie Nightmare, Hannah Hexed Hood, Adam Haunted Hale, and Joey Killing Kenny—engage in a lively draft-style discussion about their favorite Halloween movies. Jamie, the enthusiastic host, sets the stage and outlines the draft rules. Hannah humorously admits her limited horror movie experience, while Adam and Joey share their deep knowledge and personal anecdotes. The conversation is filled with playful banter and passionate debates as they each select and defend their top horror film picks, creating an engaging and entertaining Halloween-themed episode.
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    47 mins

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