Every business gets worse to run over time. But agencies are different: they can generate $5 million to $20 million in annual cash flow, and once they hit $10 million to $30 million in profit, they sell for 15× multiples, meaning $100 million to $200 million even in a downturn.
Every business sucks. Over time, as you learn more about it, it just sucks and you decide how much pain you want to deal with. But the great thing about an agency is if you grow it really big, maybe you can cash flow $5, $10, $15, $20 million. That's an exit every year. Right. Not only that, if you do get it to $10, $20, $30 in profit, your multiple, even today's day and age, you can maybe sell for 15x or so. So people think agencies, maybe you can only sell it for 3x. Let's say you do $1 million, you can only sell for $3, $4 million, which is decent, but If you get it to $10 million, maybe you can sell it for $100 million, $150 million, or maybe even $200 million or so, even in this bad economy right now.
