Is there good time to sell your business? Experts talk about timing and the importance of making sure you are on top of the cycle, but the truth of the matter is that no one really knows what the best time to sell a business is. However, there are a few reasons why we decided to sell the business in 2016.
I am in the advertising and communications business, which is a service industry that is highly cyclical. Because of technology, advertising has completely changed and has become much faster paced in 2016, faster than it has ever been. As a result, unless you innovate, you will become irrelevant to clients very quickly. Someone smart told me that your best year and your worst year are two clients away, and unless you deliver value in this insanely dynamic world, the two major clients might not be there tomorrow.
Here are the reasons why we sold in 2016.
Business growth is the only indicator of success. If you do not grow, you are in the lifestyle business, which means you are comfortable with the status quo. U.S. gross domestic product (GDP) grew 2.6% in Q3, which indicates a healthy growth for the U.S. economy. However, according to Euromonitor, advertising revenue growth globally is expected to hit 6% this year. The advertising industry has become much more global than ever before. Therefore, for Gravity Media, the company I co-founded, growth meant going global and leveraging resources of a bigger marketing and communications holding company. All to make sure that we continue growing with our clients. Global clients require international resources and capabilities, hence gaining both was critical for us.
Our team is multicultural. We have over 20 languages spoken in our office and everyone is extremely passionate about culture and how it affects the business environment. Many of Gravity employees are immigrants with high ambitions. For them, not being able to grow means the end of the road. So unless we create an environment where employees feel that they can grow professionally and work on exciting clients and projects, they will look for other opportunities. It is especially true about millennials who are used to high paced environments and quick change. A global advertising network allows for employee mobility and better access to interesting projects. Collaboration is encouraged and the ability to help your team members grow professionally helps attract and retain top talent.
The New America
The change in American demographics has created a significant opportunity for highly diverse companies like ours. The fact that according to Nielsen and the U.S Census 35% of the U.S. population identifies as multicultural proves why it is important to invest in culturally-diverse ad campaigns. The most recent ANA multicultural conference attracted the second highest number of attendees in its history, which was an encouraging sign for its attendees. However, as the American demographics changed, so did the approach to multicultural marketing. Back in 2009 when we started, there were general market ad agencies and multicultural ad agencies. In 2016, the line has blurred completely. These days, most general market agencies now refer to themselves as Total Market agencies. This means that unlike in the past, multicultural projects are currently mostly being handled by the Total Market agencies, which is nothing more than rebranded general market agencies with a few non-white employees on staff.
We always wanted to build a company that represented America - black, white, Hispanic, Asian, gay, lesbian, etc. Different on purpose. Hence, our recent move to join a large marketing and communications agency network helps us promote this idea of multicultural America not just through words, but also through practice. This move will allow us to continue partnering with clients who believe in this New America.
If you are contemplating selling, ask yourself three questions: Is your business growing fast enough? Is my team growing professionally? Has the environment changed significantly since you started the business? Answers to these questions will help you determine whether the time is right. Once you decide, move forward without hesitations.