How to Sell Your Digital Agency
There is no standard acquisition multiple for agencies — the multiple needs to be determined and agreed on by both parties. This is why agency valuations are so damn subjective.
Understanding EBITDA Multiples
If you're under a million in EBITDA, your multiple is usually going to be one to three X. So, if your agency's $200,000 in EBITDA, you might be worth from $200,000 to $600,000 in valuation.
Key Factors Affecting Valuation
- Profitability: A $10m agency with 2% EBITDA isn't a good sign. Buyers want healthy margins.
- Debt: Being in debt will decrease your value. In all honesty, you shouldn't have debt as an agency (aside from minor credit cards).
- Brand and Goodwill: These matter and should be accounted for in your valuation.
Preparing for Sale
The key to selling your agency for maximum value is productizing your services, building systems that don't depend on the founder, and demonstrating consistent profitability over time.
The Acquisition Process
Selling a digital agency involves finding the right buyer, negotiating terms, and managing the transition. The process can take months and requires careful preparation to maximize your exit value.