How Much Is My Marketing Agency Worth?

I won't give you a number without knowing your business, and anyone who does hasn't looked at it. But there's a real, honest way to get close, and it starts with understanding what goes into the number, not just wanting to know it.

The starting formula, and why it's not the whole answer

At its simplest, agency value is normalized EBITDA multiplied by a market multiple. Normalized EBITDA is your reported profit with legitimate add-backs applied. For example, owner compensation above market rate, one-time expenses, and related-party costs, each one defensible. The multiple is where most of the variation lives. In the lower middle market, agency multiples commonly run two to five times EBITDA, with recurring revenue and a defensible client base earning the top of that range. Sophisticated, well-run agencies selling to private equity can land significantly higher, sometimes six to eight times, for the same underlying cash flow an unsophisticated buyer might value at two.

That gap is the whole point of exit preparation. The multiple isn't fixed. It moves based on the factors covered across this cluster: founder dependence, client concentration, revenue quality, documentation, and growth story.

For smaller agencies, the math looks different

Below roughly $2M in revenue, a strict EBITDA-multiple approach usually doesn't fit. These deals tend to run on an income approach using seller's discretionary earnings instead, since public-company enterprise-value methods don't translate well to small private transactions.

What moves your number

Read the companion posts in this section [1] on how agencies are valued and what multiple you can expect for the specific mechanics. The short version: fix founder dependence and client concentration before you fix the multiple, since a buyer prices those risks directly against whatever number you're hoping for.

Common mistakes

Founders anchor to a number from a peak year or a friend's exit, then get frustrated when their own deal doesn't match. Every agency's multiple is a function of its own revenue quality and risk profile, not a market-wide constant.

Recommended next steps

Build a real normalized EBITDA calculation for your trailing twelve months, with every add-back documented. That's the starting number everything else gets built from.

Frequently Asked Questions

Can I get an accurate valuation without talking to anyone?

You can get a directionally useful estimate by taking the M&A Readiness Assessment (on my site: https://quiz.coreyquinn.co/). A precise number requires someone who has reviewed your specific financials, client base, and risk profile.

Does revenue size alone predict my multiple?

No. Two agencies with identical revenue can have very different valuations depending on client concentration, revenue quality, and founder dependence. Revenue is an input, not the answer.

Is there a free way to estimate this?

Yes, by taking the M&A Readiness Assessment (on my site: https://quiz.coreyquinn.co/).

How often should I recalculate this number?

At least annually, and more often if you're within a couple of years of a planned sale. Watching the number move over time tells you whether your value-creation work is working.