Is your company at risk of being bought out? | Agency Acquisition during a pandemic

Recent news headlines brought up Chesterson’s intent to go on an agency acquisition spree. This came after their recent acquisition of independent agency Morgan Randall last week. 

Chestersons has been on the lookout for smaller agencies to grab for about a year, since they announced that growth is driven by lettings.

With the current pandemic in motion, many smaller independent agencies are experiencing new faced difficulties sourcing properties in order to operate at an optimal level and reach their monthly target. Failing to do so leads their agency to be undervalued and become a prime target for agencies like Chestertons to acquire them.

Agency value driving factors

Whether you’re trying to sell your agency, or on the contrary trying to hold on to it, the value of your agency is a key factor that should be taken into account. Your business is valued based on the amount and value of the transactions that your agency is able to close each quarter. 

This is key when considering selling, is to maximise as many property transactions as you can in the coming term in order to get a valuation that reflects your business’s worth. 

This is also key if you’re trying to avoid being bought out, as by increasing your quarterly performance in the next term, you increase your valuation, deterring any potential hostile takeover or merger. 

Increasing agency value?

The question is, how can you increase performance, transactions and deals in a market that hasn’t been up to par with previous terms?

The pandemic has slowed the real estate market considerably, making it more difficult for agencies to thrive, but here are some good points to note: 

• Look beyond your postcode, broaden your scope and increase your chance of potential closures.. Since consumers are reacting to the current environment by looking for different boroughs, it’s best to take a broader look at the map in order to accommodate as many clients as you can while simultaneously outperforming your competition. To find out more about expanding your horizon, click here.

• Focus on lead generation. In a downturn it is an important element to focus on. Reaching out to customers is time consuming, especially when you have a reduced workforce. It takes away from the time you need to invest in closing your existing clients. To survive you have to diversify your lead generation methods. Make sure you’re not relying on just one source. Learn more about effective ways to lead generation here.

• If the lettings market is slow, perhaps consider the sales market. Following the announcement of a stamp duty holiday, sales have been ramping up, in some cases even more than lettings. Trying to increase your property sales could be a large factor in a more attractive valuation of your agency. To find out more about how to profit from the stamp duty holiday, click here. 

Utilise the correct tools to reach your target 

At XChange, we pride ourselves in being able to source you a match property in 48 hours. Our services are all about enhancing your revenue, which could be crucial to your agency in the coming months. XChange also serves you as a platform to source applicants, giving you all the necessary components involved in closing a deal, all while taking the difficult task of sourcing away from you in order for you to focus better on your agency growth.

The bottom line being that, with XChange, you don’t have to get bought out. We are able to provide you everything you need to salvage your business, and if you do choose to sell your business, with us you’ll be able to sell it at a higher price thanks to your boost in performance.