Business Valuation Guide
Most marketing agencies sell for 1.8x to 3.3x Seller's Discretionary Earnings, with the midpoint near 2.5x. A marketing agency with $250,000 of SDE would typically fall between $450,000 and $825,000.
Marketing agencies carry a specific risk buyers know well: the founder is frequently the reason clients signed. Add project-based revenue and short notice periods, and you have a business that can lose a large share of revenue quickly. Agencies that sell well have fixed the first problem before going to market.
Start with Seller's Discretionary Earnings (SDE): net profit plus the owner's pay and perks, interest, depreciation and one-time costs.
Then apply the industry multiple. For marketing agencies that band runs 1.8x to 3.3x, and where a specific business lands inside it is decided by the factors below. Typical SDE margin for this category runs around 20% of revenue, which is a useful sanity check: if your margin is far off that, the multiple moves with it.
Above roughly $1M to $2M of EBITDA the buyer pool changes. Individual buyers give way to private equity platforms and strategic acquirers, and pricing restates onto an EBITDA multiple of 4x to 6.5x rather than a multiple of SDE.
Larger agencies and holding groups acquiring capability or accounts, private-equity-backed marketing platforms, and senior agency staff buying out a founder.
A typical sale runs 5 to 10 months from going to market to closing, assuming your financials are ready when you start. Agencies are discounted harder for owner dependence than almost any other category, because clients often hired the founder rather than the firm. The year before a sale should be spent moving relationships onto account leads.
Most small agencies sell for roughly 1.8x to 3.3x Seller's Discretionary Earnings. Retainer-based agencies with account leads owning relationships reach the top of that band. Founder-dependent project shops sit at the bottom, and some are effectively unsellable.
Because clients frequently hired the founder rather than the firm. When the founder leaves, the relationship can leave with them. Buyers underwrite that risk directly, which is why moving relationships onto account leads is the highest-return preparation available here.
No, and inflating revenue with it is a common mistake. Buyers value gross profit or agency fee income, not billings. An agency reporting $5M of revenue that is mostly client ad spend is valued on the fee, not the $5M.
There is no single average, because price tracks earnings rather than revenue. At the midpoint multiple of 2.5x SDE, marketing agencies at $500,000 of SDE sell around $1,275,000, and at $1,000,000 of SDE around $2,550,000. Typical SDE margin in this category runs near 20% of revenue, so a marketing agency doing $1,000,000 in revenue would often carry about $200,000 of SDE and land near $510,000.
Take your Seller's Discretionary Earnings and multiply by 1.8x to 3.3x. Where you land inside that band is decided by owner dependence, customer concentration, recurring revenue and the quality of your books. A marketing agency at the top of the range looks materially different from one at the bottom, and most of those differences can be improved in the twelve months before a sale.
SDE multiples of 1.8x to 3.3x apply to owner-operated marketing agencies. Once earnings pass roughly $1M to $2M of EBITDA the buyer pool shifts to private equity and strategic acquirers, and pricing restates onto an EBITDA multiple of 4x to 6.5x. The two are not comparable: SDE includes the owner's compensation and EBITDA does not, so the same business shows a higher SDE multiple than EBITDA multiple.
Typically 5 to 10 months from going to market to closing, assuming financials are ready. Agencies are discounted harder for owner dependence than almost any other category, because clients often hired the founder rather than the firm. The year before a sale should be spent moving relationships onto account leads.
SDE times the industry multiple. For marketing agencies that multiple is 1.8x to 3.3x, so $250,000 of SDE points to $450,000 to $825,000. Recorded sales of similar businesses serve as a cross-check, and the equipment and inventory value usually sets the floor.
Yes, at the top of this page. It applies the 1.8x to 3.3x band for marketing agencies, adjusted for owner hours, margin and years in business, and returns a range rather than one number.
To decide whether to sell a marketing agency, a market valuation: what a buyer would likely pay. A certified appraisal is usually needed only for divorce, estate, tax, litigation or a buyer's SBA loan, and costs far more.
Multiples reflect broker transaction data including the BizBuySell Insight Report and aggregated 2024-2025 USA small business sales, and mirror the bands used by the Exit Ready valuation calculator. They are planning estimates, not a formal appraisal, and not investment advice. Market multiples move; this page was last updated 2026-08-19.