Ever wonder why one agency sells for 2× EBITDA while another gets 8×?

Here’s why: buyers don’t just look at your revenue. They look at the quality of that revenue.

Factors that influence valuation include:

• Profitability – healthy margins matter more than top-line revenue.
  
• Retention – do clients stay year after year, or churn quickly?
  
• Growth – is your revenue trending upward consistently?
  
• Niche – are you specialized in a valuable segment, or a generalist?
  
• Team & Systems – can the business run without you?
  

I’ve seen two agencies, both doing $5M in revenue, sell for wildly different prices. One had sticky clients, strong margins, and a leadership team. The other had flat growth, founder dependency, and shaky books. The result? A 3× multiple vs. a 7× multiple.

Valuation is math, but it’s also storytelling. The story you can tell about your revenue, your clients, and your future potential matters just as much as the spreadsheets.

👉 Which of these factors do you think your agency is strongest in?

Contact us if you’re and agency owner and have considered selling or joining something bigger.

Not all buyers are created equal — and knowing who’s across the table matters as much as the price they’re offering.

Here are the big categories:

• Strategic Buyers – another agency, platform, or marketing services firm. They want synergies: your niche, your clients, your geography.
  
• Private Equity Buyers – financial investors who back roll-ups or platforms. They care about returns, but also about building value over a 3–7 year period.
  
• Individual Buyers / Search Funds – entrepreneurs looking to buy themselves a business instead of starting one.
  

Each has different goals:

• A strategic buyer might want to integrate your team and brand.
  
• A PE buyer may want you to stay on and help grow a platform.
  
• An individual might want you to stick around short-term to show them the ropes.
  

The same agency could get very different offers depending on the buyer type. Which means you need to think beyond “the multiple” and ask: What do I want my agency’s future to look like after the sale?

Contact us if you’re and agency owner and have considered selling or joining something bigger.

Selling your agency isn’t one conversation — it’s a journey.

A typical deal flows like this:

#️⃣ Initial Outreach – a buyer expresses interest (or you decide to explore options).

#️⃣ Intro Conversations – light discussions about fit, strategy, and goals.

#️⃣ Letter of Intent (LOI) – a non-binding document that outlines headline terms.

#️⃣ Due Diligence – the buyer digs deep into your financials, operations, customers, and team.

#️⃣ Final Agreement & Closing – lawyers paper the deal, both parties sign, and money changes hands.

Each stage has its own rhythm and pressure points. Intro calls feel exciting. The LOI feels like a milestone, but it’s just the start. Diligence can feel invasive, like an audit crossed with a marathon. And closing can drag on with negotiations over details you never thought mattered (like working capital adjustments).

Owners who know the roadmap go in prepared. They’re less likely to be blindsided, and more likely to keep control of the process.

👉 If a buyer approached you tomorrow, would you know what happens after that first call?

📧 If you’re an agency owner, have you ever considered selling or joining something bigger? Contact me if you’d like to learn more about what an acquisition could mean for you, your employees and your clients. 📧

Most agency owners hear “M&A” and think:

👉 Complicated Wall Street stuff

👉 Billion-dollar deals splashed in the headlines

👉 Not relevant to a 20-person shop in Austin or Denver

Here’s the reality: M&A simply means a transfer of ownership. That could be one founder buying out another, a strategic buyer rolling you into their platform, or a private equity firm backing your next stage of growth.

For agency owners, M&A is about creating options:

💠 Cashing out after years of hard work.

💠 Bringing in a financial partner to scale faster than you could alone.

💠 Merging with another firm to expand capabilities and win bigger clients.

In other words, M&A isn’t just for the big guys. The middle market — agencies doing $2M–$20M in revenue — is where most of the action happens.

The key is knowing that you don’t have to wait until you’re ready to sell to learn about M&A. In fact, the earlier you understand the mechanics, the stronger your position when that buyer email inevitably lands in your inbox.

Curious about how M&A could apply to your agency? Start a conversation by contacting us at https://www.herringbonedigital.com/contact.html