An agency owner who sold his company and then bought ten more tells owners what their business is actually worth: the five roles between doing the work and owning the asset, and why earnouts are where sellers lose money.
Most agency owners are the bottleneck in their own company and the last to know it. Jason Swenk was one of them, sold anyway, and then spent years on the buy side acquiring roughly ten agencies. He runs Agency Mastery and wrote Operator to Owner, and in this episode he tells Doug Foley what a buyer sees in a business that the founder never does.
They get specific. Jason names the five identity shifts a founder moves through: operator, manager, architect, CEO, owner. Anyone still sitting at architect or below won’t sell at a number they like. He gives the valuation math he used as a buyer: under a million in EBITDA is worth one to two times net profit, and the topline number owners quote is usually media spend running through the P&L.
He breaks down the terms that cost him money on his own exit and why a broker paid on the close will always tell you to close. Two things end a conversation with a buyer for him: a rollup structure, and anyone he couldn’t survive a road trip with. And he makes the case that AI is 1999 again. The agencies afraid of it are the ones with something to lose, and nobody is going to keep paying you the same money for the same deliverable.
If you run an agency or a service business you expect to sell one day, this is the conversation from someone who has sat on both sides of the table.
In this episode: the five identity shifts from operator to owner, the two questions in a NASCAR interview that rewrote his job description, hiring the right people before becoming the right person, delegating outcomes and the 1-3-1 method for problems that land on your desk, what happens the month after you sell, why earnouts are designed for the seller to miss, real multiples for service businesses and where ego numbers come from, client concentration as a valuation killer, rollups and the road trip test for a buyer, AI as a repeat of the early internet and why it still needs a director, and living off half of what you make so you never have to sell.
Disclaimer: All expressions of opinion in this podcast are subject to change without notice and are not intended to be a forecast of future events or results. Valuation ranges and multiples discussed are general guidelines only and do not constitute a valuation of any specific business.