Every conversation about selling an agency in this industry is a conversation about the multiple. Three times. Four. Six, if the business is clean and someone is feeling strategic. It's the number traded at conferences, the number in the offer email, and the number an owner repeats to himself on the drive home.
It deserves the attention. It just isn't the only number that decides what you walk away with.
There is a second number, it moves the outcome nearly as much, and most sellers never negotiate it: the share of the price that actually shows up when you sign.
The multiple gets all the attention, and it should get some
Start with why the multiple matters at all, because the case for preparing your business is not subtle.
Brad all day would pay you 2.83×. He might pay a little bit of a premium if the company has other features he likes. I think everyone here, after working your ass off — we all deserve at least a 4 or 5×, if not more.
That gap, between the 2.83× on earnings that Brad Ziemer at Window Still cites as the industry norm and what a genuinely well-built business is worth, is the reason preparation is worth years of unglamorous work. Closing it is the single highest-return project available to most owners in this industry.
But suppose you close it. Suppose you do the work, clean the books, build the sales function, and get an offer at a multiple you can be proud of. You can still sit at your kitchen table two years later feeling like you got less than you agreed to, because the multiple sets the price and the structure sets the payout.
The number you hear is not the number you get
Deal structures in this industry commonly deliver 40 to 70% of the purchase price at close. The remainder is paid over one to three years, tied to the business hitting revenue or EBITDA targets after the acquisition.
Run that against a real headline. A $6 million offer at signing may mean $2.4 million to $4.2 million in immediate liquidity.
Sit with how wide that is. Same business, same headline price, same handshake, and a $1.8 million difference in what actually clears when you sign. That is more than many agencies in this industry are worth in total. And it is decided by terms most sellers skim, in a document they read carefully only after they have already emotionally accepted the price.
The rest of the money is a bet, and you are the one placing it. You are betting that a company you no longer control will run your business well enough, for long enough, to pay you the balance of your own purchase price.
Two numbers, not one
Once you see the second number, some deals invert.
A higher multiple, paid mostly later, contingent on targets inside someone else's company, can be worth less to a seller than a lower multiple paid mostly in cash at close. Sellers almost never run that comparison, because the multiple is the part you can tell people about and the structure is the part buried in the definitions section.
It is the same question you would ask about any other asset you own. How much, how certain, and when.