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How do I value my agency?
What really drives the value of an agency business – and where to start if you want to increase it.
Whether you’re actively thinking about selling your agency or just curious what it might be worth one day, one question comes up again and again:
“How do I value my agency?”
It’s a great question – and one that doesn’t have a single, simple answer. That’s because your agency’s value is about more than just your numbers. It’s about the strength, resilience, and potential of your entire business.
In this article, we’ll walk through what really drives agency valuation, why traditional valuation methods fall short on their own, and how you can begin assessing and increasing your value – whether or not you plan to sell.
TL; DR - How to Value Your Agency
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Start with your operating profit (adjusted EBITDA), then apply a valuation multiple – usually between 2x and 10x.
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That multiple depends on more than just profit – buyers also consider things like recurring revenue, team structure, and client risk.
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We’ve identified 12 key levers that influence your agency’s value. Want to know where you stand? Start here to sign up to our email mini-series, or book a call.
- Continue reading below for more tips...
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Why agency valuation isn’t just about revenue
Most agency valuations start with your operating profit (or adjusted EBITDA, to be technical). From there, a multiple is applied to calculate a potential sale price. But here’s the thing: that multiple can vary hugely – from as low as 2x to 10x or more. We’ve seen agencies achieve higher than this too, which is quite rare but achievable with the right approach.
What makes the difference? The numbers matter, but what really drives value is how dependable, scalable, and desirable your business looks from the outside.
At The Wow Company, we’ve helped many agencies navigate exit planning and valuation over the past 20 years. We’ve seen that valuation multiples increase when the buyer sees activity like:
- Recurring revenue and healthy gross profit margins
- A capable team that can operate without the founder
- A strong niche and reputation in the market
- Predictable performance and a balanced client base
Strong profitability is also a must – but real value comes from the foundations beneath it: how consistent it is, how you generate it, and how well the business runs without you.
What do buyers actually look for?
Buyers (or investors) are not just buying your past performance – they’re buying your future potential. That means they’re looking for indicators that your agency will continue to grow, even after you’ve stepped away.
Here are a few key things that influence how a buyer sees your business:
- Client concentration: If one client accounts for more than 20% of revenue, that’s considered high risk.
- Recurring income: Retainers and long-term contracts signal predictability.
- Team structure: Is the business reliant on the founder to operate or win new work?
- Specialism: Do you have a clear niche or a unique edge that sets you apart?
- Financial trajectory: Has your growth been consistent, or has it been stop-start?
- Intellectual property: Do you own any tools, frameworks, or products?
Each of these elements helps shape your valuation multiple. A business with strong fundamentals and low risk will command a higher multiple than one that relies on the founder, has patchy profits, or lumpy revenue.
Introducing the 12 levers of agency value
To help agency owners assess and improve their valuation, we’ve created a framework called the 12 levers of value. These are the areas that, in our experience, most influence what your agency is worth and how attractive it is to a buyer.
They include things like:
- The amount of profit you make
- Your agency’s niche and positioning
- Your recurring revenue model
- Your client base and exposure to risk
- Your management team and structure
Each lever on its own can influence value. But when you look at all 12 together, you get a far more complete picture – not just of what your agency is worth today, but of what it could be worth in the future.
Want to explore all 12 levers in more detail? We’ve created a free email series to walk you through them, one day at a time.
Free email series: 12 days x 12 levers
If you want to increase the value of your agency, the first step is understanding what really drives it.
Our email mini-series, 12 days x 12 levers, is designed to do exactly that. Each day, you’ll receive a short, practical email from Natalie Howarth, Head of Business Tax at Wow, covering one of the 12 levers that shape the value of your agency. It’s jargon-free, clear, and full of insight.
You’ll learn:
- How each lever affects valuation
- What buyers are really looking for
- The most common gaps and how to fix them
Whether you’re planning to sell in the next few years or just want to build a stronger, more profitable business, this series will give you the clarity and confidence to take action.
Sign up for the email series here.
When should I get my agency valued?
A lot of agency owners wait until they’re ready to sell before getting a valuation. But in most cases, that’s too late to make meaningful changes.
The best time to get a valuation is when you’re still a few years away from exiting. That gives you time to increase your profitability, strengthen your systems, and reduce the risks that pull your valuation down.
Even if you’re not looking to sell, a valuation can help you:
- Set clearer business goals
- Make smarter investment decisions
- Understand what’s holding you back
It also means you’ll be ready to act if an unexpected opportunity comes your way.
Want to know what your agency is worth?
If you’d like to get a clearer picture of what your agency is worth – and how to increase that number – we can help.
We offer bespoke valuations and exit planning support tailored to agency owners. We’ll help you assess where you are today, where you could be in the future, and what to prioritise to get there.
Or, if you want to start with insight you can action straight away...
Final thought
Valuation isn’t just a financial exercise – it’s a strategic one. When you know what drives the value of your agency, you can make better decisions now and create more freedom for the future.
The sooner you start thinking about value, the more options you’ll have – whether you decide to sell or simply create a business that’s more rewarding to run.
FAQs
Here are some common questions we're asked about the agency valuation process.
What does agency valuation really involve?
Valuing an agency isn’t just a matter of multiplying profit by a number. While operating profit (or adjusted EBITDA) is a starting point, your valuation depends heavily on how you generate that profit – and how sustainable it is. Buyers consider things like recurring revenue, client risk, team structure, market positioning, and how dependent the business is on the founder. A strong agency valuation reflects not just past performance, but future potential.
How do I calculate my agency's value?
Start with your agency’s annual operating profit, ideally calculated after you’ve paid yourself a reasonable salary for the work you do in the business. Then apply a valuation multiple based on factors like client concentration, recurring revenue, team structure, and market positioning. Most agencies fall between 2x and 10x profit, depending on how strong they are across these areas.
What makes an agency more valuable?
Agencies are more valuable when they have recurring revenue, consistent profit, a strong niche, a capable team, and low client dependency. Buyers also look at how reliant the agency is on the founder and whether the business can grow without them. For more information, sign up to our 12 levers of value email-mini series which will walk you through the detail.
When should I get my agency valued?
The best time to get a valuation is before you’re ready to sell. Ideally, this happens 2–3 years ahead of a potential exit so you have time to improve key levers and increase your value. Even if you don’t plan to sell, a valuation can help clarify strategic decisions.
