Selling an Advertising Business

An advertising agency is usually valued on profit from fees, not on total billings that include pass-through media spend. What drives the multiple is client retention, clean fee margins, and how much the founder is required to keep accounts and deliver. For a quick baseline, use Rejigg’s free valuation calculator, then tighten it by splitting fees vs media and backing up retention with real client history.

Most buyers remove pass-through media spend from “revenue” and focus on what the agency actually keeps: retainers, management fees, production fees, and the gross profit on those fees. If invoices blend media and fees, diligence takes longer, and buyers usually discount the numbers until you prove the split. The practical fix is a 12–24-month client-level schedule that shows media spend managed, fees billed, and fee gross profit. Store it in a due diligence checklist folder so every buyer reviews the same file.

Sometimes. SBA loans are easier when the agency has steady fee profit, clean books, and low “key person” risk, meaning clients and delivery do not hinge on the founder. Lenders also get nervous if revenue is mostly month-to-month with vague scope or if a few clients make up most fees. You can estimate payments with Rejigg’s SBA loan calculator, then improve lender-readiness by separating media pass-through from fees and documenting who owns client relationships.

No. Brokers typically charge 5–10% of the sale price for packaging, outreach, and process management that you can run yourself with the right tools. Rejigg gives you access to buyers, pre-vets them, collects digital NDAs, provides a secure data room, and keeps messaging and offers organized. You stay in control, and you do not pay a percentage just to route conversations through a middleman. Start with the prepare-to-sell guide.

Most agency sales take about 3–6 months from “ready to market” to closing, and it can be faster when financials and platform access are clean. The usual delays come from unclear retainer scope, messy account ownership, and buyer worries about churn after the founder steps back. If you run the process through Rejigg, you can move quicker because buyer vetting, NDAs, messaging, and the data room are built in. Use the due diligence and closing checklist early to avoid last-minute scrambles.

Have clean financial statements, a client list with fee type and start date, and copies of every client agreement or statement of work. Buyers also ask for contractor and payroll detail, plus proof of who owns and administers ad accounts, analytics, tag manager, and reporting dashboards. Expect churn history and a few anonymized reporting samples. Rejigg’s data room and QuickBooks integration help you assemble this without emailing attachments, and you can control which buyers see which folders after they sign NDAs.

Earnouts are common because client retention after the handoff is the main risk. Most fair earnouts tie to something both sides can verify, like fees collected from a defined list of clients over 6–18 months, with clear rules for pauses, downsells, and churn. Put the reporting method in writing so there is no debate later. Rejigg’s negotiation guide and offer comparison dashboard help you compare earnout terms side-by-side, not just headline price.

Seller financing means you take part of the sale price over time as monthly payments instead of receiving it all in cash at closing. It can help close deals when a buyer’s lender or equity check is tight, but it also adds risk if the buyer mishandles the client handoff. In agencies, it often comes with a defined transition period and regular reporting so you can see how accounts are performing. Rejigg’s deal tracking helps you compare offers with different mixes of cash, seller notes, and timelines in one view.

Buyers usually ask for a non-compete because they are buying client relationships and team stability. Practically, it limits you from starting or joining a competing agency for a set period, often within a geography or niche. The exact terms matter because overly broad restrictions can box you in after the sale. Most sellers push to align it with the clients being purchased and their real post-close role. Work this into your deal negotiation prep early so it does not become a late-stage fight.

A working capital adjustment makes sure the agency has enough cash and short-term assets at closing to operate normally, instead of being “emptied out” right before the sale. In agencies, the swing factors are usually accounts receivable, prepaid software, and timing gaps where you owe contractors before clients pay you. It’s worth modeling what a normal month-end looks like in your shop so you can negotiate from reality. Keep billing and collections tight going into close, and store AR and AP support in a diligence folder.

They review termination terms, notice periods, and how clearly scope and deliverables are defined because vague month-to-month agreements make revenue easier to cancel. They also check whether contracts can be assigned to a new owner or if client consent is required after close. In advertising, the “contract” is often a statement of work plus email threads, and that creates confusion during diligence. Centralize every signed agreement and scope version in a secure data room so you can answer quickly and consistently.

That’s common in smaller agencies, but buyers will treat it as risk and usually adjust price or structure. Most of the time, the fix is a lightweight agreement or a statement of work that matches what you already deliver and bill. Keep it simple: scope, billing, payment timing, termination, and who owns the work product. Once it’s signed, upload the final versions to your Rejigg data room and share them only after buyers sign NDAs.

Run a controlled process and share information in layers. Most agency owners do not tell clients early, and they share sensitive details only after buyers are vetted and NDAs are signed. Rejigg supports that workflow: buyers are pre-vetted, NDAs are signed digitally, and you control access inside the data room by buyer and folder. When you’re ready to disclose, a client-by-client plan from the transition guide helps you sequence client and staff communication.

Contractor-heavy delivery is normal in advertising. Buyers focus on whether contractors are replaceable capacity or critical talent, and whether quality control sits with an internal lead who will stay. Prepare a simple map of who does what, how work gets reviewed, and what your backup bench looks like if a key freelancer disappears mid-project. If you have long-term contractor agreements, organize them and show how you handle continuity. A clear contractor plan reduces the buyer’s “what breaks in month one” worry.

Buyers don’t expect you to predict platform changes. They want proof you have navigated them without losing clients. The agencies that hold value can show how they communicated uncertainty, how they adjusted creative and targeting, and how they retained accounts through a rough quarter. Bring 2–3 anonymized examples of platform shocks and the concrete actions you took. Keep those case notes in your data room so every buyer sees the same proof, not a different story on every call.

Yes. Clean books are one of the fastest ways to move an agency from “interesting” to financeable, especially if a buyer wants a lender. Start by separating pass-through media spend from agency fees, categorizing contractor costs consistently, and removing personal expenses from the business. Rejigg’s QuickBooks integration can import financials into your data room so you are not rebuilding reports by hand. Use the prepare-to-sell guide as the checklist.

Add-backs are owner-specific or one-time costs that a buyer will not keep paying, like personal travel run through the business, a one-time legal bill, or above-market owner pay. In agencies, buyers scrutinize “labor add-backs,” like unpaid founder delivery work, because that often turns into a real hiring cost after the sale. Document each add-back with a short note and support so it holds up in diligence. Start with Rejigg’s free valuation calculator, then pressure-test anything tied to labor.

A common transition is 30–90 days of active handoff, followed by a lighter advisory period, and the length usually depends on how founder-led key relationships are. Buyers want continuity through a few reporting cycles and a budgeting moment, because that is when churn risk often shows up. The cleanest plans are client-by-client: who gets introduced, what stays the same, and when responsibilities shift. Rejigg’s transition planning guide helps you map it clearly.