A guide to buying, selling and growing your PR firm, from Michael Murphy

Welcome to the PRmoment Podcast. On the show today, we’re chatting with Michael Murphy and we’re going to talk about Michael’s guide to buying, selling and growing your PR firm.Michael is an advisor and non-executive for a range of PR firms. Notably, he’s helped WE since 2014. He also currently works with Coverdale Barclay, Alfred, and Lodestone, amongst others. Previously, he was CEO of APAC and CEO of International at Weber Shandwick from 1993 – 2000,  CEO of Trimedia International from 2004 – 2009 and Global CEO of Grayling from 2009 – 2013.Before we start, a plug for our new subscription training service for senior folks within agencies' PRmoment Leaders. The line-up of speakers for the first semester is now complete. Do take a look - I think you'll be impressed!Also, thanks so much to the PRmoment Podcast sponsors the PRCA.Here is a summary of what Michael and I discussed:2 mins What advice would Michael give to PR agency owners who are thinking of selling their business?“Most business owners believe their business is worth more than it often is…many have inflated ideas of their worth.”“No offence to the trade media, but often the maximum possible price (the earn-out figure) is talked about as the price in the (article) headline.”“I know lots of agency owners who have sold their business and it has been a success. I know others where it has been an unmitigated disaster. You have to remember, you’re giving up your baby. You’re giving up your freedom. “You're likely to only sell your business once in your life, so you better get it right.”6 mins Why do PR agency owners want to sell their businesses?“The (PR agency) market is littered with small and medium-sized firms.”“You need to build around you people who will challenge you.”“PR is a tough game. If you don’t enjoy it - get out.”12 mins What are PR firms' owners' exit options? Who are their likely buyers? Michael gives us an insight into the advantages and disadvantages of each.“There’s never been a better time to sell your business. There is so much interest in the sector. So much money.”13 mins What’s the rough ratio to profit that PR agency owners can expect to get upfront, compared to what they get in an earn out?“The cultural fit of who you sell to is at least as important as the cash.”“Private equity is much more prevalent in the sector than it used to be.”PR owners exit options are:Trade buyersPrivate equity buyersManagement Buy Outs (MBO)Employment Ownership Trusts (EOTs)Don’t sellBecome an acquirer of other PR firms.“So many people think about selling, don’t do it and wait until it’s too late…they have something that’s worth a pittance to what it was worth a few years ago.”23 mins What skills should agency owners look for when they choose an advisor for a sale?25 mins What do PR agency acquirers look for when purchasing? Or, conversely, how can you prepare your PR agency for sale?29 mins How do you get to a sensible valuation of your PR firm?31 mins The likes of W Communications and The Romans are UK PR firms trying to increase their international offer, but Michael remains surprised that more UK firms don’t utilize the UK’s access to finance to more aggressively to scale their businesses globally.“We’re (the UK) is the number two centre for comms and PR and public affairs outside North America - we’re renowned for our scale, our expert