Buying & Selling Digital Agencies

Client concentration, people dependence and recurring-revenue considerations for agencies.

Start with the business model

Different digital businesses create different diligence questions. Recurring-revenue software, inventory-heavy ecommerce, SEO-dependent content and app businesses should not be evaluated with the same checklist.

Map model-specific risk

Identify the systems that make the business work: acquisition channels, customer retention, suppliers, platforms, code, content, people and owner involvement. Then determine what happens if one of those systems changes.

A practical review checklist

• What claim is being made, and what primary evidence supports it?
• Which revenue, traffic, customer or operational factor is most concentrated?
• What must transfer to the buyer for the business to continue operating?
• What work currently depends on the owner or a single employee, vendor or platform?
• Which assumptions would materially change the price or the decision to proceed?

What to do next

Continue with the most relevant diligence, valuation or marketplace guide before making a transaction decision.