How to Value an Agency Beyond Its Billings
Agencies are valued on profit, not top-line billings, and heavily on how much runs without the founder. Businessappraisal estimates your worth and shows exactly what discounts it.
Estimated business value
Method breakdown
What moves this number
Estimate, not a certified appraisal. Your figures are not stored.
In short
To value an agency, apply a multiple to its seller discretionary earnings or EBITDA rather than its billings, then adjust for revenue recurrence and how dependent the work is on the owner. Businessappraisal estimates your agency worth on an SDE or EBITDA multiple, cross-checks it with a revenue multiple and a discounted cash flow, and benchmarks against comparable agency sales. Most agencies land in the 2x to 3x SDE range, with recurring retainers and a team that delivers without the founder pushing toward the top and project-based, owner-led shops sitting lower. The result is an educational estimate shown as a range, not a certified appraisal.
Questions
Agency valuation questions people actually ask
How much is my agency worth?
Most owner-operated agencies sell for 2x to 3x seller discretionary earnings. Recurring retainers, a delivery team that runs without the founder, and low client concentration push you toward 3x and above, while project-based, founder-led shops sit at the bottom of the band or below it.
What is an agency appraisal?
An agency appraisal is an assessment of what the agency would fetch from a buyer, based on its earnings, revenue recurrence, and how transferable the client relationships are. A certified appraisal from a credentialed appraiser can cost thousands; a self-serve estimate built on the same earnings-multiple logic gives you a defensible range in minutes for planning and negotiation.
What EBITDA multiple do agencies sell for?
Small agencies are usually priced on SDE at 2x to 3x. Once an agency clears roughly $1M in EBITDA with a management team in place, buyers switch to EBITDA multiples, commonly 4x to 6x, with strong recurring revenue and specialization commanding the premium end.
Do retainers increase agency valuation?
Yes, meaningfully. Contracted recurring retainers are the closest thing an agency has to subscription revenue, and buyers pay up for revenue that arrives without being re-sold every month. An agency at 70 percent retainer revenue will typically command a visibly higher multiple than the same P&L built on one-off projects.
How does owner dependence affect what my agency is worth?
It is the classic agency discount. If the founder owns the key client relationships and leads delivery, the buyer is really buying a job, and the multiple drops toward 1.5x to 2x SDE. Documented processes, a second tier of client owners, and clients who rarely talk to the founder all push the number back up.
Are billings or profit used to value an agency?
Profit. Billings include pass-through media and contractor spend that never reaches the owner, so buyers strip them out and price the agency on SDE or EBITDA. Two agencies with identical billings can differ several-fold in value once real margins are visible.
Why it fits
Agency founders who want a worth estimate that accounts for recurring revenue and owner dependence.
Profit, not billings
The estimate is driven by owner earnings and EBITDA, so pass-through media and billings do not inflate the number.
Recurring revenue lifts it
Retainer-based revenue and low client concentration push a 2x SDE agency toward 3x; project work and one big client pull it down.
Owner dependence discount
The drivers show how much a founder-led delivery model discounts the range, and what a real team would change.
More use cases
Related features
Find out what it is worth
Enter your numbers and get an estimate from three methods in minutes, benchmarked against comparable sales, with the drivers explained. An educational estimate, not a certified appraisal.