Welcome to a special recap of our latest Kaffeen Espresso podcast episode, where we dive deep into the world of mergers and acquisitions (M&A) for independent agencies. Our guest, Jonathan Baker, head of the M&A practice at Punctuation, brings a unique perspective as an Emory University graduate, former craft brewery owner, and seasoned consultant to small and mid-sized marketing services firms.

Below, we break down the highlights of our conversation, offering practical insights for agency leaders considering growth, succession, or sale.

From Craft Beer to Consultancy: Jonathan’s Journey

Jonathan’s career took a “steep left turn” from marketing strategy to launching Monday Night Brewing in Atlanta. After experiencing the M&A process firsthand—complete with its emotional highs and lows—he joined his father, David C. Baker, at Punctuation to help agency owners navigate their own exits. Over the past five years, Jonathan has built out Punctuation’s M&A practice, bringing rigour and empathy to a process that’s often more subjective than expected.

Why Focus on Independent Agencies?

Punctuation’s roots are personal: David C. Baker, Jonathan’s father, owned an independent agency in the 90s and saw a gap in support for agency owners. Over time, Punctuation has become a go-to resource for marketing firms, offering tailored advice and a deep understanding of the unique challenges faced by independents.

What Makes an Agency M&A-Ready?

Jonathan shared several key factors for agencies preparing for M&A:

– Clean Financials: Separate business and personal expenses, and present your accounts clearly.
– Tight Positioning: The more focused your agency, the higher your potential valuation.
– Market-Rate Compensation: Pay yourself a fair, market-based salary.
– Reduce Founder Reliance: Demonstrate that the business can thrive without you at the centre.

The Emotional Side of Exiting

Letting go is hard—especially when your agency is your “baby.” Jonathan emphasised that founders don’t need to disappear, but should focus on strategic direction, high-level financials, and business development. The key is to build systems and empower others, making the agency less dependent on any one individual.

Building Long-Term Value

The best way to build a sellable agency? Run a well-managed business. Jonathan recommends thinking long-term: “If you want this business to be here in 100 years, what do you need to do now?” Sometimes, this even means considering a name change if your agency is closely tied to the founder’s identity.

When to Start Planning Your Exit

Don’t wait until you’re ready to retire. Most deals require you to stay on for 2–3 years post-sale, so Jonathan suggests starting the process at least 4–6 years before you want to fully exit. This gives you time to show positive trends and make strategic changes.

Inbound Marketing: More Than Just a Lead Source

A strong inbound marketing strategy signals to buyers that your agency isn’t reliant on the founder’s relationships. It also helps smooth out revenue bumps and demonstrates a process-driven, resilient business. Jonathan and I agreed: the best time to start inbound marketing was a year ago—the second-best time is now.

Balancing Inbound and Outbound

For high-ticket creative services, inbound marketing builds relationships and shortens sales cycles. Outbound can be dialled up or down as needed, but should rest on a foundation of consistent inbound efforts. The most effective inbound tools are those that match the founder’s personality—whether that’s writing, speaking, or podcasting.

Overcoming Imposter Syndrome

Many agency owners hesitate to write a book or start a podcast, feeling they’re not “expert” enough. Jonathan’s advice: just start. You’ll learn and grow through the process, and the act of publishing—whether a book or a podcast—can be as valuable as the content itself.

UK vs US Agency Dynamics

Jonathan noted that UK agency principals tend to pay themselves less than their US counterparts, and that the US market’s size and appetite for risk create different opportunities. UK agencies often need to look internationally to niche down and grow.

Pricing: Value vs Time

While many agencies claim to have moved beyond time-based billing, most still estimate based on hours. The real issue is chronic over-servicing—giving away more hours than you’re paid for. Jonathan recommends first ensuring you’re paid for all your work, then gradually moving towards value-based pricing.

Common Growth Challenges

Agency leaders often get in their own way, whether by over-focusing on culture at the expense of business goals or by neglecting financial management. Jonathan encourages leaders to embrace accountability, structure, and financial literacy—even if it’s not their natural inclination.

Consistency is Key

Whether it’s marketing, business development, or culture, consistency underpins long-term success. Jonathan’s team practices what they preach, using staff feedback and their own experience to reinforce the importance of regular, sustained effort.