When it comes to acquiring businesses, the best (and most fun) way to do it is to think outside the box.
On today’s episode, host Roland Frasier sits down with Joey Gilkey, Founder and CEO of Sales Driven Agency, a company that builds sales operations specifically for digital marketing agencies. Historically, marketing agencies are creative strategists, Joey says, not sales people. They’ve never built a sales operation or hired salespeople successfully. The agency space is unique in that they don’t have the same kind of margins as other companies and need to operate differently. They need the kind of help Joey has to offer.
There’s more to Joey than what he’s doing now. He says he picked this niche because he has a grander plan than just helping agencies with sales. His big plan involves acquiring businesses in some pretty creative ways.
Listen in and be inspired.
The Bigger Plan
Joey has been in the agency space for a decade. He knows agencies super well. He even has a mastermind for 7- and 8-figure agencies. He knows how to grow revenue. He can add 7 figures to an agency by building out a sales operation, but there are areas where he can’t help—operations and fulfillment, for example. That’s his next problem to solve. He personally doesn’t have that background, but he can buy a company that does.
His bigger picture is to become a super company for agencies. He wants to do it all—sales operations, fulfillment, sourcing fractional accounting that serves agencies, etc. He’s acquiring for growth.
Someone else has put in the hard work of building an audience and trust, and they don’t know how to use/monetize it. Joey has plenty of offers. He would love to cut a deal and work something out, where they either drive their people to his offer or he just takes it over completely.
The Offer In the Works
He’s done a lot of creative deal structuring. For example, he once bought a Facebook group from someone. Talk about an innovative way to acquire someone’s work and audience. How did he structure the deal? He offered them 10% of everything he makes from people in the group.
He’s under contract right now with a company that does fulfillment and operations. They serve the same clients he does, but they have a bigger list. They’ve been working together so well that he thought to himself: instead of making a referral fee, why not own the company I refer people to?
He threw out a simple offer to get the ball rolling ($3.9 million), and they came back with $4.2 million. He said it wasn’t worth that and got creative. He offered a 10-year seller finance, 10% down payment, 5-year balloon, 4% interest, at a $4.5 million valuation with a 6-month deferred down payment. They said it was too complex, and they went back to his original offer but kept some commissions. They made a few other compromises and had a deal.
Moral of the story? Get creative and get it done.