Buying a marketing agency in Florida

Small agencies do some mix of digital advertising, search and social media management, websites, branding and graphic design, video, public relations and printed materials. Clients pay in three ways.

• Monthly retainers cover ongoing work like managing ads or social accounts. They're the most dependable income.
• Projects (a new website, a brand identity, a campaign) are billed by the job and have to be sold again each time.
• Media spend is the money clients pay for the ads themselves. Some agencies pass it through and add a fee or markup, which can make revenue look much larger than what the agency really earns.

Clients are often local businesses: medical and dental practices, home service companies, real estate offices, restaurants, law firms. Agencies that focus on one industry tend to find clients more easily. A typical team has account managers who talk to clients, specialists (designers, ad buyers, writers, developers) and freelancers for overflow. In many small agencies, the owner brings in most new clients and is the face of the work.

• A large share of revenue from retainers, with clients who have stayed several years.
• A niche: a clear type of client or service that brings referrals and work the team can repeat.
• Margins measured without media spend, so you can see what the agency actually earns.
• Account managers, not just the owner, who have their own relationships with clients.
• Written processes, and reports that clients actually read.
• Client ad accounts, websites and domains set up in the client's name, with access given to the agency, which avoids fights later.
• No single client making up a large share of revenue, and top clients who came from different sources.
• Prices that have gone up over time, with the scope of work written down so extra requests get billed.

Florida doesn't license marketing or design agencies. Expect a local business tax receipt; there's no state license to transfer in a sale.

The rules start to matter when an agency calls or texts consumers for its clients. The Florida Telephone Solicitation Act (section 501.059 of the Florida Statutes) requires prior express written consent before automated sales calls or texts. People who get unlawful ones can sue for their actual damages or $500, whichever is more, and up to three times that if the violation was willful. For texts, they must first reply STOP and give the sender 15 days to comply. Calling consumers to sell them goods or services may also need a commercial telephone seller license from the Florida Department of Agriculture and Consumer Services (section 501.605), unless an exemption in section 501.604 applies.

Federal rules apply on top of these: the Telephone Consumer Protection Act, the CAN-SPAM Act for email, and the Federal Trade Commission's rules on endorsements and fake reviews. If the agency runs calling or texting campaigns, have a lawyer review how it collects consent.

• Revenue by client for three years: how much comes from the biggest clients, and how long clients stay.
• Media spend separated from agency fees, and how markups are disclosed to clients.
• Client agreements: notice periods, who owns the creative work, and whether the agreements can be assigned to a new owner.
• Who does the work. Leaning on freelancers is flexible, but it raises questions about whether they should be employees and who owns what they create.
• The owner's role in selling and in client relationships, and how long a handover you'll need.
• Any disputes over results, billing or ownership of work.
• Dependence on one advertising platform's rules or partner status, which can change overnight.
• Software subscriptions and tools in the owner's personal name that need to move to the business.

• Which clients would leave if you left?
• How much of your revenue comes from retainers, and how long do retainer clients usually stay?
• How do new clients find you?
• Does the agency make calls or send texts for clients, and how do you get consent?
• Who owns the ad accounts, websites and domains you manage?
• Which clients did you lose last year, and why?
• What work goes to freelancers, and do they sign agreements handing their work over to you?