Build a more valuable agency.
Revenue is not enterprise value. Here is what makes a marketing agency worth more to a buyer and easier to run in the meantime.
See which of the six factors is costing you the most.
Revenue is only part of the story
Revenue matters. It just isn’t what a buyer is paying for.
When I work with an agency, the question I keep coming back to is whether the business would keep producing cash if the founder stepped away. Buyers ask the same question. They’re paying today for profit they expect in the future, so they want to know that profit doesn’t depend on you.
The profit you’ve already earned is yours to keep. What a buyer is really buying is the next few years, and how much of that would happen without you in the room.
Two agencies with the same revenue can sell for very different prices. Most of the difference comes down to how much the business depends on its founder.
Growth can make the problem more visible.
An agency that grew 30 percent last year but can’t run a week without the founder has a problem. A buyer sees it in the first conversation and prices it in, either as a lower multiple or an earnout that pushes part of your money into the future.
Closing that gap is not about dressing the business up for a sale. It is the same work that makes the agency better to run today: less dependent on you, more predictable, more profitable.
What drives agency value
Buyers underwrite an agency on a handful of factors. The size of the top line is just one of them.
Founder Dependence
Could the agency sell, deliver, and keep clients for six months without you? Is there a second layer of management with real decision authority?
Client Concentration
How much revenue sits with one or two accounts that could leave? Buyers start discounting when one client passes 20 percent.
Revenue Quality
How much is recurring and under contract, versus project work you re-win every quarter? Buyers want at least half recurring, with contracts that transfer.
Profitability
What is the real EBITDA once add-backs are documented, defensible, and still hold up under new ownership? Buyers look at a three-year average, not your best year.
Specialization
Is there a clear reason a specific kind of client picks you over a generalist, or are you competing on price against everyone?
Operational Maturity
Is there a leadership team and documented process that runs the business, or does it live in your head?
The same agency can command radically different outcomes. Higher-paying buyers pay more for recurring revenue, documented processes, and a team that doesn’t need the founder.
6–8×Build for the buyer you want.
Building a more valuable agency is the foundation for everything else. Whether you eventually acquire other agencies to grow faster or sell in the next few years, this work has to happen first.
You can’t buy your way to enterprise value if the platform you’re buying with is shaky. And you can’t sell well if you skipped this step.
Specialization, predictable growth, and sales that don’t depend on the founder are what getting ready to sell looks like.
Agency Value Creation
Revenue and enterprise value aren’t the same thing. Here’s the thesis behind building, acquiring, and selling a more valuable agency, and where to start.
Programmatic M&A for Agencies
Buying agencies isn’t a one-off event. Here’s how programmatic M&A works, why it beats organic growth alone, and how to run it as a repeatable system.
How to Sell a Marketing Agency
Selling a marketing agency well takes years of preparation, not a phone call to a broker. Here’s the complete guide to getting ready and navigating the process.
Start here
Seven posts, in the order most founders find useful.
The complete series / 7 articles
What Makes a Marketing Agency Valuable to Buyers?
The six factors buyers underwrite, and how to move each one.
How Founder Dependence Affects Agency Valuation
Why an agency built around you gets discounted no matter how much revenue it makes.
How Client Concentration Affects Agency Valuation
Where the 20 and 30 percent lines sit, and how to fix it before a buyer finds it.
How to Improve Agency EBITDA Before a Sale
What normalized EBITDA means, which add-backs hold up, and where you have room to move.
Why Revenue Quality Matters More Than Revenue Alone
Why a dollar of retainer revenue is worth more than a dollar of project revenue.
How Specialization Can Increase an Agency’s Strategic Value
Deep Specialization™ is a growth strategy, and it also shows up in the multiple a buyer pays.
How to Build an Agency That Can Operate Without Its Founder
The practical path to taking yourself out as the single point of failure.
I’ve helped build them. Now I help founders get them ready to sell.
I was CMO at Scorpion while it grew from $20M to over $200M in ARR. Before that, I was the top enterprise seller at The Search Agency for 21 straight quarters.
I wrote Anyone, Not Everyone, a book about why specializing gives agencies a stronger foundation for growth than trying to serve everyone.
Today I advise founder-led agencies from the board side on growth, acquisitions, and getting ready for an exit.
Explore the bookFrequently asked questions
Is this only relevant if I’m planning to sell?
No. Every lever here also makes the agency easier to run and more profitable now. Founders who do this work and never sell still end up with a better business.
How long does it take to meaningfully increase enterprise value?
Plan on 18 to 24 months before the change shows up in numbers a buyer will trust. Buyers look at a three-year average of your earnings and want a track record, so the sooner you start, the more of that window works in your favor.
Does specialization affect valuation, or is it just a growth story?
Both. A specialized agency has a clearer buyer, a defensible position, and pricing power a generalist doesn’t have. Pricing power shows up in your margin. Defensibility shows up in the multiple, because a specialized agency carries less risk.
I’m not talking to buyers yet. Should I still care?
Yes, and this is the best time. Doing this work on your own timeline with no deal on the table gives you a stronger business and negotiating position than trying to do it after an unsolicited offer appears.
Know what your agency is worth—and what to fix first.
Get your Exit Readiness Score. See where your agency stands across the six factors buyers care about most.
