Sell your Development or Digital Agency to Fruition You started a hosting, Drupal, Magento, WordPress, MVC, IoT, and/or SEO business with a few key producers and a couple of clients. Then your projects started getting more complex, your team had to grow to meet the demand, and you began to feel the pain. You love your work, but the difficulty and the risk of hiring the right developers, designers, or SEO team members while continuing to do what you love to do is not easy. You may have been through this difficult cycle a few times. You may now have hundreds of team members and a full service agency but you’re ready to take a bigger leap than you can organically. Fruition’s agency acquisition plan can help. Dev Shop / Agency Growth Trajectory Many agencies start with a strong founder and a few key team members which provides 160-240 hours of work to fill during a week. As the projects grow you add developers or designers which adds an extra 50 hours a week of production time. The biggest pain points are when your projects did not go well or you have to hire to stay out in front of incoming projects. The fun times are shipping the cool product, getting great search rankings for clients, and working with great people. These cycles of fun and pain are part of growing a business. Unfortunately, they tend to get harder and riskier as you grow. Founders reach a point with their business where they consider how to reach the next step and if it is a step that they want to take. Fruition’s criteria is an agency or firm with $1m to $10m in revenue. Fruition’s fast evaluation is painless and minimizes disruption to your ongoing business. Together, we can ease those painful times and provide better services for our clients. The painful early stages of growing digital agencies The place you want to be in is near the inflection point of creativity and financial risk. I know, I’ve been there on several occasions and I expect to be there again in the future. When you find yourself more stressed than you think you should be you know that you are in that uncomfortable spot. Getting out of the danger zone is the key to enjoying your work again. However, that is not easy. Growing your Drupal, WordPress, Magento, or SEO business while keeping your clients happy, managing the risks of hiring new people, dealing with HR issues, and keeping your finances in order is never easy. The chart on the right shows the typical growth path for a digital agency. An example WordPress, Drupal, or Magento shop might start with a team of 1-5 producers – producers are workers that spend more than 90% of their time on client work. Producers include PHP and Ruby developers, designers, SEO specialists, etc. The high overall agency utilization begins to go down as the agency’s headcount of managers and support staff grows. Start-up Agencies – Teams of 3-10 If you have a startup agency you’re probably struggling with accounts receivable, finding office space, and hiring. It includes starting small, gradually adding full-time employees (FTEs), then getting into the hiring of full-time professional managers. Teams of 11-20 As you get into teams of 11-20 you’ve likely hired project managers or you need to hire more. You probably have a basic org chart, you might be offering some benefits, and you’re web dev or seo contracts are getting better. But your legal bills should be adding up and the cost of having more employees is likely outgrowing what you’re billing clients. Teams of 20-80 As you grow into 20+ team members you are building out your management team with experienced managers, finance leads, and possibly a legal team. Your ancillary services are also growing including hosting, dev-ops, and other support staff that are expensive and difficult to bill for Thus, you have to build it into client contracts and be able to justify a high enough billable rate to cover these more experienced members of the staff. Options Aside from Selling your Dev, Design Shop to Fruition For the typical digital agency or Drupal, WordPress, Magento or Ruby website development shop that is founded by 1-3 talented individuals, there are three paths out of this unpleasant place. Option 1 – Fire Clients First, you can fire clients and limit your business to just a few manageable clients. At this point, you are essentially an employee of your clients. If things go south you are left scrambling for more work. This is the easiest path but also the riskiest in terms of stable income and in most scenarios job security. Option 2 – Hire, Cash Crunch, Hire, Fire, Hire The second option is hiring your way out of the pain. You hire sales people, bookkeepers, and producers (developers, designers, SEO PMs, Analytics Specialists, etc). This requires capital, great hiring skills, and managerial wherewithal. This is the most common option that web dev shops take. The typical path is you get a new client and then you hire a new person to help with that account and grow from there. Yet, hiring is tough. It is is even more difficult to keep your processes and systems up to speed with the projects that you are servicing. This causes client satisfaction problems which lead to team member turnover. It is not easy, but a lot of digital agencies have grown this way. The third option, and the one that I’m proposing is for you to consider joining FRUITION. FRUITION, a 13+-year-old full-service digital agency. You, your team, and your clients can join Fruition and we can grow together. Option 3 – Sell your dev or SEO shop to Fruition By joining Fruition, the stresses that you do not like can largely go away. What you like to work on can remain. You might like sales or giving speeches at conferences, or you might like coding all day long. What is important is that you begin to focus on what you love doing. Steps in selling your web development or design shop The first step in selling your digital agency or web development shop is to see if there is a good cultural fit. Culture is a trendy word that gets thrown around a lot. To Fruition, culture is the common mission that we’re working toward. That mission encompasses the environment we work in, the clients we help, and the people we work with. We also like to say that we have grit. We’ve lived through some lean times (2008 crash) and some meaty times but we continue to plug away, being aware of the macro forces around us (we started before iphones were around), while not being swayed by false starts and misfires (Google glasses). Once the cultural fit is largely established the plan of seeing how the financial aspect of selling your web development or SEO shop is figured out we begin working on the finances, the systems integrations, and the process integrations. Figuring out how all of these pieces fit together is challenging and getting a working model in place well before you, your team, and your clients officially join Fruition is critical to a successful transition. While joining a bigger team that has a common mission of making digital our client’s competitive advantage. What does option 3, Joining Fruition, Look Like? Fruition has successfully acquired and merged smaller web dev agencies with great success. The preferred path is for you, as the founder or partner in the firm, to join Fruition and we grow the business together while providing improved and additional services for our clients. Example teams that could join Fruition: Ruby Dev Shop Sale – If you own a Ruby on Rails shop with a handful of paired developers working their tails off to get products out the door and then moving on to the next product, you can join Fruition and gain a full scope digital team to back you up, along with all of the required support staff. As a combined company we now have top notch rails guys or gals and the client gets access to full-service digital services. Selling Your WordPress Shop – Your WordPress shop may be focused on backend or frontend but not have both or have a limited SEO team. By joining Fruition, you’d take away the headaches of finding the right team and you’d be able to focus on the client. SEO Agency Sale – Fruition’s core is SEO and digital marketing. We’ve been doing it for a long time and would love to expand by having more talented teams join us. Dev/Ops / Security – Fruition has a very strong digital security practice that includes CMS pen testing for WordPress, Drupal, and full network security solutions for health care organizations. If you’re a digital security specialists with a handful of clients or a shop that is growing we’d love to chat with you. Social, SaaS, and other digital businesses – There are a lot of potential digital agencies that would be a great fit for Fruition. Just contact us if you’re interested in discussing. Next Steps in Joining Fruition and Growing Together We have a solid process for evaluating the types of companies that our team can help and that we can continue to grow together. Our process of determining if Fruition and your company are good fit is low stress and fast. On the following page, we a simple form to get more information on your Digital Agency / Web Development Business / security business. By joining Fruition you gain an experienced digital team including project managers, developers, UX designers, IT security, devops, account managers, and more. You also get very experienced support staff including in-house legal, in-house accounting, and professional leadership that has grown businesses for many years. We’ve experienced the painful cycles on several occasions, we want you to join us to skip those first few cycles, and help us through the coming fun of growing a business together by working on bigger projects, with an extremely talented group. Closed Acquisitions Fruition has purchased the following companies. Jan 2015 DS2 Hosting – An enterprise level Magento development and hosting company. Contact Fruition Today to chat more.