Most digital marketing agencies with revenues over $8M sell for about 8–12x EBITDA. Agencies with revenues under $8M generally sell from about 1.5X-4X EBITDA. Sophisticated strategic buyers look much deeper.
How is the sale of a book of business taxes?
You will be taxed on the profit you make from selling the business. Profit received from the sale of the business assets will most likely be taxed at capital gains rates, whereas amount you receive under a consulting agreement will be ordinary income.
Is there a way to sell an insurance agency?
There is little resemblance in selling an insurance agency to selling an insurance policy… and it’s much more complicated. There is no “cookie-cutter” method for selling an insurance agency and what works for one seller may not work for another.
How does the sale of an insurance company work?
Price is the number of dollars agreed to between the buyer and seller, as what it will take to transfer ownership. Net proceeds from the sale are the actual dollars the seller can put in his or her pocket–after taxes, and after other expenses. The question is: “should the owner sell the stock or the assets?”
Who is responsible for the sale of an agency?
Attorneys should review the sale of any business. Often, the buyer is the party that drafts all the legal documents. The seller’s attorney is the final advocate for the seller in making sure that all is fair. Many agency owners describe the value of an agency in terms of a multiple of revenue or commission.
Do you need to plan for the sale of an agency?
The agency is part of the owner’s life and it is not a simple commodity to trade. Snap decisions to sell usually result in long drawn out negotiations or other complications. When an owner spends some time planning the sale of the business, many common problems are minimized or avoided.
