Agency Valuation Calculator
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Result
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The agency valuation calculator gives a quick estimated value range for your agency from four numbers: annual revenue, EBITDA or owner profit margin, the share of recurring retainer revenue and year over year growth. It is built for agency owners planning a sale, a partner buy in or growth targets. It runs in your browser and is free with no sign-up.
Enter your numbers below
Your output will appear here.
Uses revenue, profit margin, recurring revenue share and growth, the numbers buyers look at first.
Returns a low, mid and high value plus an implied revenue multiple, not one falsely precise figure.
Shows the EBITDA multiple used, a low and high estimate and the implied revenue multiple, with a note that agencies often sell for 2 to 5x EBITDA.
Change margin, retainer share or growth to see how improvements could change what your agency is worth.
Three steps from a blank form to a result you can use.
Type your annual revenue and your EBITDA or owner profit margin as a percentage.
Enter the share of revenue that comes from recurring retainers and your year over year growth rate.
Click Calculate to see the estimated value range, the EBITDA multiple used and the 2 to 5x EBITDA benchmark, then try other scenarios.
Most agencies are valued as a multiple of profit, and that multiple moves with how predictable and how fast growing the business is. This calculator puts those factors together into a quick range you can use for planning, before you pay for a formal valuation.
The form starts with example values. Replace them with your own figures, ideally from your accounts rather than from memory.
Buyers and brokers mostly use one of three measures, depending on the size and structure of the agency.
| Measure | What it is | Usually used for |
|---|---|---|
| EBITDA multiple | Earnings before interest, tax, depreciation and amortisation, times a multiple | Larger, process driven agencies with a management team |
| SDE multiple | Seller's discretionary earnings: EBITDA plus the owner's salary and benefits, usually with a lower multiple | Smaller, owner operated agencies |
| Revenue multiple | Annual revenue times a multiple | Smaller agencies or those with uneven profit, often as a floor |
Before any multiple is applied, buyers normalise the numbers. They add back one time expenses, such as a one off legal bill, and owner specific costs. They also remove one time income, such as a single windfall project. FE International gives a case where treating one time relief income as recurring inflated a valuation by $400,000.
Published multiples differ widely, which is why the calculator returns a range. FE International lists digital agencies at 6 to 12 times EBITDA, while Productive lists digital marketing agencies at 2 to 5 times. Size explains much of the gap. Productive's figures by revenue band show it clearly:
| Annual revenue | Revenue multiple | Earnings multiple |
|---|---|---|
| Under $1M | 0.8 to 1.4x | 2 to 4x |
| $1M to $2M | 1 to 2x | 4 to 6x |
| $2M to $5M | 1.5 to 3x | 6 to 12x |
| Over $5M | 2 to 4x | 8 to 15x |
We read these as rough market bands, not prices. The multiple a real buyer offers depends on the factors listed under What Raises or Lowers Your Multiple.
The calculator values your agency as a multiple of EBITDA. It starts every agency at 3.0x and moves that multiple up or down for recurring revenue and growth.
EBITDA = annual revenue x margin % Multiple = 3.0x + recurring adjustment + growth adjustment Mid value = EBITDA x multiple Low value = mid value x 0.8 High value = mid value x 1.2 Implied revenue multiple = mid value / annual revenue
| Input | Condition | Change to multiple |
|---|---|---|
| Recurring (retainer) revenue % | 50% or more | +0.75x |
| Recurring (retainer) revenue % | Under 20% | -0.5x |
| Year-over-year growth % | 20% or more | +0.5x |
| Year-over-year growth % | Below 0% | -0.5x |
Between those thresholds the input leaves the multiple unchanged. The low and high values sit 20% either side of the mid value, so the range reflects uncertainty rather than precision.
Example: these are illustrative numbers. An agency has $1.5M in annual revenue, an 18% EBITDA margin, 70% of revenue on retainers and 15% growth.
Now suppose the owner lifts the margin to 22% at the same revenue. EBITDA becomes $330,000 and the mid value rises to $1,237,500, a gain of $225,000. If growth reached 20% instead, the multiple would rise to 4.25x and the mid value to $1,147,500. Productive's band for $1M to $2M agencies is 4 to 6 times earnings, so we read the tool's 3.75x as a cautious planning figure for an agency this size.
| Factor | What buyers want to see | What the sources say |
|---|---|---|
| Recurring revenue | Retainers and long contracts | FE International: retainer or subscription revenue can add 25 to 40% versus project based agencies |
| Client concentration | No single dominant client | FE International: one client above 25% of revenue typically triggers a discount. Productive flags any client above 10% |
| Owner dependence | A team that runs without the founder | FE International: founder led sales can reduce value by 15 to 30% |
| Margins and growth | Healthy profit and rising revenue | FE International: EBITDA margins above 20% and growth above 10% add value |
| Operations | Clean financials and documented processes | Freshy Sites lists clean financials and documented operations as value drivers |
The calculator uses margin to set EBITDA and adjusts its multiple for recurring revenue and growth. It cannot see client concentration or owner dependence, so adjust your expectations for those yourself.
Quick answers about the Agency Valuation Calculator.
Most agencies sell for a multiple of earnings, adjusted for size, recurring revenue, growth and risk. Enter your revenue, profit margin, retainer share and growth in the calculator to get an estimated range. Published multiples vary widely, so treat the result as a planning figure and get a professional valuation before a sale.
It depends on size and quality of earnings. Productive lists digital marketing agencies at 2 to 5 times EBITDA, while FE International lists digital agencies at 6 to 12 times. Productive's revenue bands run from 2 to 4 times earnings under $1M revenue to 8 to 15 times above $5M.
EBITDA is earnings before interest, tax, depreciation and amortisation. SDE, seller's discretionary earnings, adds the owner's salary and benefits back onto EBITDA. FE International notes SDE suits small owner operated agencies and is usually paired with a lower multiple, while EBITDA is the standard for larger agencies.
Retainer income is more predictable, so a buyer takes less risk. FE International says retainer or subscription revenue can add 25 to 40% compared with project based agencies, and Productive notes yearly contracts are worth more than monthly ones. Moving clients onto longer retainers is one of the clearest ways to raise value.
It gives a fast, formula based estimate: a 3.0x EBITDA multiple adjusted for retainers and growth, with a range 20% either side. It cannot weigh client concentration, owner dependence, contracts or debt, which buyers check closely. Use it for planning and scenario testing, then confirm with a broker or M&A adviser.
Yes. The agency valuation calculator is free with no sign-up and no account. It runs in your browser, so you can test as many revenue, margin, retainer and growth scenarios as you like. Copy the result and breakdown to share with a partner, adviser or accountant.
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