What Buyers Want to Hear About New Business at Your Agency

Earlier this summer, I had a conversation with David C. Baker on Just Ask Jody Live. (And you can see the episode here with a heads-up that we ran into technical difficulties and so reprised the convo here too ).

The conversation centered around what an agency needs to do today to prepare themselves for an acquisition tomorrow, specifically around business development.

I asked David, what do agencies need to get right before they can be taken seriously? If you know David (and many of you do), you might have expected him to say, “tighten your positioning.”

But instead, he talked about the importance of demonstrating that you have a process for attracting prospects and converting them into clients. 

Not surprisingly, I agree. After all, my business is built on one core idea: smart growth happens when you treat business development like a system instead of a series of disconnected tactics

OK, you might be thinking, “ugh, system, system, system… that sounds so boring.” 

Not to mention that it entails you investing your time and energy as the agency principal rather than farming the new business function out to someone else. And for agency leaders who find business development the most challenging part of running their agency, that can be hard to hear. 

But it’s 100% worth the investment because, according to David, what a potential buyer doesn't want to hear is that your new business plan is to rely on referrals and word of mouth. 

There's nothing wrong with a strong referral pipeline and robust word of mouth—in fact, they should have a place in every agency new business plan—but they depend on the founder’s network and relationships. That's not scalable or transferable. It’s a haphazard and unpredictable approach screams “risk” to the buyer. 

Buyers expect founders to move on within a few years of an acquisition and, if they want their investment to pay off, they need to know that the momentum will continue without the founder. 

A system, on the other hand, can be scaled. 

Here's what a potential buyer wants to hear: 

You have a current and active marketing plan built off your expert point of view. It spells out what gets done annually, quarterly, monthly, and weekly, and the plan is documented so that it doesn't live in one or two people's heads. 

You have a mailing list of qualified prospects, strategic partners, and current and past clients, along with a method for staying in front of them regularly. 

And when someone asks how the pipeline is actually performing, you can show them a report organized by stage of the sales cycle, with the typical inflow of leads and the conversion percentage from one stage to the next.

How confidently could you have this conversation today with a potential buyer?

If your answer is “not entirely confident”, here are a few things you can do right away: 

First, start with the core engine behind your new business operating system: core positioning and a messaging strategy designed to appeal to the types of businesses you work with best.

(See! It does always unspool back to positioning.)

Next, reassess the agency owner’s role in business development. David says he sees few successful firms without a principal involved in new business. This doesn’t mean the agency principal is solely responsible for new business, but the system will function better if it’s built around their strengths and professional point of view.

And, starting at this baseline, you’re able to look forward and create an elegant plan for the principal to step away from new business duties, retaining what they’re best at while delegating the rest to others.

To use a sports analogy, think of a coach who designs a system around the strengths of the players on a team roster. That system is what allows the team to keep winning after a star player moves on. A new business system works the same way, and it makes the owner's job easier, because the work shifts toward the activities that suit them while others carry the rest.

Whether or not an acquisition is on the horizon a strong system can put you in control of your new business destiny.

Building that system alone, especially while running client work, is where most agency owners get stuck. Not because the concept is complicated, but because it requires stepping back from the work long enough to build the thing that generates the work.