Maximizing the Value of Your Rep Firm
This article provides the highlights of the MANA special report on valuing your rep firm. You are in the best position to understand the factors impacting the value of your rep firm through your day-to-day management and operation of your agency. Where you and your agency stand on a number of valuation drivers will have a major impact on the cash flow and eventual value of your agency should you ever decide to sell it.
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Valuation Drivers
Having good relationships with multiple customers can significantly enhance the value of your agency. A simple phone call may provide you with the ability to present a complementary product that might create revenue, save cost, or save production time for a customer. If so, you and your agency stand well-positioned to use your preexisting relationships to grow the sales revenue of your supplier. Also, to the extent this relationship is built on the credibility of good engineering and technical knowledge, your value is further strengthened.
The strength of the agency’ s line card is very closely related. In each case the agency may represent the leading manufacturers in a particular industry and may be constantly on the lookout for product developments, both with its current manufacturers or emerging ones, thereby enhancing the value of the agency.
Conversely, agencies with a significant degree of customer or supplier concentration are subject to greater risks. Either the customers or suppliers could undergo a management or ownership