How to Sell a Marketing Agency: The Number Comes Before the Multiple

An agency deal hits the headlines and every owner asks what multiple they got. Usually nobody knows, and it wouldn't be your number anyway. A buyer pays a multiple of the profit they can prove after rebuilding your books. As a CPA who works with more than 70 marketing and advertising agency owners every month, here's how to sell a marketing agency starting with the number, not the multiple. Craig Cody is a CPA, Certified Tax Coach, and former NYPD lieutenant. CHAPTERS 0:00 What multiple did they get? Wrong question. 0:15 Who I am and who this is for 0:45 Why does the multiple come last? 1:47 Test one: can the number be proven? 2:44 What share of AGI are your top three clients? 2:55 Test two: will the number last? 3:45 Test three: does the number turn into cash? 4:30 Does the agency make money without you? 5:06 What can you do Monday? 5:27 The close THE THREE TESTS 1. Can the number be proven? Adjusted EBITDA that ties to 12+ monthly accrual closes, add-backs that cut both ways, one story on the P&L and the tax return. 2. Will the number last? Top three clients as a share of agency gross income (AGI), renewal and notice terms, revenue sorted into recurring, repeat and one-time. 3. Does the number turn into cash? WIP, deferred revenue and receivables reconciled monthly, a written approval policy for credit memos and write-offs. Then the owner question: does the agency make money without you? MONDAY: pull your top three clients as a share of AGI. If you can't get it in an hour, that's your first answer. I also wrote a book for agency owners. You can request a free copy at the link below. https://www.craigcodyandcompany.com/f... This video is general education, not advice for your specific situation. Confirm your own facts with your advisor before acting. #HowToSellAMarketingAgency #SellYourAgency #AgencyValuation #MarketingAgency #AgencyOwners #DigitalMarketingAgency #BusinessValuation #AgencyAcquisition #AgencyExitStrategy #SellingABusiness #AdjustedEBITDA #EBITDA #BusinessProfitability #AgencyGrowth #AgencyProfitability #CashFlow #RecurringRevenue #ClientRetention #FinancialReporting #ExitPlanning #BusinessExitStrategy #MergersAndAcquisitions #AgencyFinance #CraigCody