How Selling Your Digital Agency Can Be a Strategy for Scaling Not Just an Exit with Todd Taskey

Scaling a digital agency is no easy feat, especially when it comes to deciding whether to sell or expand. On the latest episode of the Garlic Marketing Show, we had the privilege of speaking with Todd Taskey, the mastermind behind Potomac Business Capital and host of The Second Byte Podcast. Todd shared invaluable insights on how digital agencies can leverage the sale of their business as a strategy for growth—an often overlooked concept.

 

But before we proceed, don’t forget that this episode is brought to you by videocasestory.com. Click here if you need help collecting, crafting, and delivering customer stories.

 

Why Selling Your Agency Can Be a Growth Strategy

 

When most people think about selling a business, they think about stepping away from it. But what if selling could actually help you grow your agency? Todd explains that selling doesn’t have to be the end of the line. Instead, it can be a powerful way to bring in the resources you need—whether that’s capital, personnel, or strategic support—to take your agency to the next level.

For agencies generating between $1 million and $5 million in EBITDA, selling part of the company to a larger entity or private equity firm could provide the exact leverage needed to scale. Todd explains how founders often maintain equity in the new, larger company and how this can significantly increase the value of their holdings as the larger company grows.

 

The Key Factors That Attract Buyers

 

According to Todd, two primary factors affect an agency’s attractiveness to potential buyers: recurring revenue and retention. Buyers want to invest in agencies that generate stable, recurring income and retain their clients over time. Todd emphasizes the importance of building these elements into your business model long before you consider selling.

“If your financials aren’t strong, the deal won’t close,” Todd advises. “You need to have your financials in order and a plan to retain clients if you want to make your agency attractive to buyers.”

 

What Can Make or Break a Deal

 

Todd shares real-world examples of what works—and what doesn’t—when it comes to selling a digital agency. One story he shares involves an SEO agency generating $2 million in EBITDA that struggled to sell because they didn’t have the right growth strategies in place. On the flip side, Todd discusses the success of Power Digital, a company that went from $5 million to $30 million in EBITDA in just three years after partnering with private equity.

The lesson? If you want to sell your agency for top dollar, it’s crucial to have a clear growth path and a business model that can scale.

 

How Sales and Marketing Play a Crucial Role

 

Many agency owners underestimate the importance of sales and marketing when preparing for an exit. Todd notes that private equity firms and large agencies look for strong sales and marketing teams as a sign of future growth. Founders who invest heavily in these areas are much more likely to attract lucrative offers.

Private equity doesn’t just want a business that’s coasting; they want to see a machine that’s generating leads and converting them into long-term clients. If your agency lacks a strong sales function, now is the time to build it.

 

Todd’s Biggest Takeaway for Agency Owners

 

Todd offers one final piece of advice for agency owners: Know your risk tolerance. “Not everyone needs to scale rapidly,” he says. “If you’re content with steady growth and a solid bottom line, there’s no shame in staying the course. But if you want to scale quickly, selling part of your business could be the fastest way to get there.”

 

Watch the full episode now, and make sure to leave any questions or comments you have about the episode.