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Jason Swenk is the Founder of Agency Mastery 360, a company dedicated to helping digital agency owners grow and scale their businesses. With over 20 years in the agency space, he has built and sold his agency, and he now leverages his experience working with brands like AT&T, Hitachi, and Lotus Cars to mentor other agencies.

In addition to hosting the Smart Agency Masterclass podcast, the #1 podcast for digital marketing agency owners, Jason has developed a framework for growing agencies from nothing to eight figures. His unique perspective, shaped by his extensive experience and monthly interaction with over 100 agencies, provides valuable insights into navigating market disruptions and achieving sustained growth.

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Here’s a glimpse of what you’ll learn:

  • [02:22] The importance of EBITDA over revenue for agency valuation
  • [04:47] Jason Swenk’s Elf on the Shelf story of a missed opportunity
  • [06:05] KPIs that go beyond just revenue numbers
  • [08:28] Tips for assembling a winning team
  • [09:54] Republix’s unique approach to acquiring and nurturing digital agencies
  • [16:54] The financial strategies behind Republix’s acquisition deals
  • [18:46] The key trends and challenges in the current agency acquisition landscape
  • [21:38] Jason’s advice for entrepreneurs aspiring to sell their agencies

In this episode…

In today’s rapidly evolving business landscape, agency owners face the daunting challenge of sustaining profitability and positioning their agencies as attractive candidates for acquisition. What factors set apart those agencies that thrive in the competitive market, and how can agency owners ensure they maximize their potential for growth and sale?

This recap dives deep into Jason Swenk’s strategies for growing a digital agency poised for acquisition. A seasoned expert in the agency space, Jason focuses on crucial performance indicators beyond revenue, highlighting profitability, MRR, customer loyalty, and strategic team-building as fundamental metrics. Jason emphasizes that agencies often inflate their revenue to appear more successful, but the true value lies in their profit margins and operational efficiency. Through real-world examples and a personal anecdote about missing out on the Elf on the Shelf phenomenon, he shares a unique acquisition strategy that prioritizes culture fit, autonomy, and shared success.

In this episode of the Inspired Insider Podcast, revisit Dr. Jeremy Weisz’ earlier interview with Jason Swenk, Founder of Agency Mastery 360, about mastering agency growth and acquisition. Topics include the importance of EBITDA over revenue for agency valuation, acquisition KPIs, Republix’s unique approach to acquiring and nurturing digital agencies, and the key trends and challenges in the current agency acquisition landscape.

Resources mentioned in this episode:

Related episode(s):

Quotable Moments:

  • “Profitability, not revenue, is the hallmark of a truly successful agency.”
  • “Building a strong team is about recognizing what you’re not good at and hiring people who are.”
  • “Cultural fit and shared vision are just as critical as the financials in a successful acquisition.”
  • “Understanding your motivation for selling is crucial to avoid feeling lost post-sale.”
  • “A solid legal and financial team is like having bodyguards for your business during an acquisition.”

Action Steps:

  1. Focus on building profitability over revenue: EBITDA is a key metric that showcases an agency’s financial health and potential for acquisition.
  2. Measure success with performance indicators beyond revenue: By tracking key performance indicators like MRR and churn rate, agencies can build a reliable and client-centric business that’s appealing to buyers.
  3. Assemble a team that complements your weaknesses: A well-rounded team allows for agency owners to focus on their strengths, ensuring the agency runs efficiently and remains attractive in the eyes of potential acquirers.
  4. Align agency culture with potential acquirers: Cultural fit is crucial for a successful acquisition, as it fosters a smooth transition, employee satisfaction, and sustains the agency’s legacy post-sale.
  5. Prepare for a sale with transparency and organization: Being organized and transparent during the due diligence process builds trust with potential buyers and ensures all aspects of the agency are accurately represented, leading to better acquisition terms.

Sponsor for this episode

At Rise25, we’re committed to helping you connect with your Dream 100 referral partners, clients, and strategic partners through our done-for-you podcast solution.

We’re a professional podcast production agency that makes creating a podcast effortless. Since 2009, our proven system has helped thousands of B2B businesses build strong relationships with referral partners, clients, and audiences without doing the hard work.

What do you need to start a podcast?

When you use our proven system, all you need is an idea and a voice. We handle the strategy, production, and distribution – you just need to show up and talk.

The Rise25 podcasting solution is designed to help you build a profitable podcast. This requires a specific strategy, and we’ve got that down pat. We focus on making sure you have a direct path to ROI, which is the most important component. Plus, our podcast production company takes any heavy lifting of production and distribution off your plate.

We make distribution easy.

We’ll distribute each episode across more than 11 unique channels, including iTunes, Spotify, and Google Podcasts. We’ll also create copy for each episode and promote your show across social media.

Cofounders Dr. Jeremy Weisz and John Corcoran credit podcasting as being the best thing they have ever done for their businesses. Podcasting connected them with the founders/CEOs of P90xAtariEinstein BagelsMattelRx BarsYPOEOLending TreeFreshdesk, and many more.

The relationships you form through podcasting run deep. Jeremy and John became business partners through podcasting. They have even gone on family vacations and attended weddings of guests who have been on the podcast.

Podcast production has a lot of moving parts and is a big commitment on our end; we only want to work with people who are committed to their business and to cultivating amazing relationships.

Are you considering launching a podcast to acquire partnerships, clients, and referrals? Would you like to work with a podcast agency that wants you to win?

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Rise25 Cofounders, Dr. Jeremy Weisz and John Corcoran, have been podcasting and advising about podcasting since 2008.

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Episode Transcript

Intro  0:15

You are listening to Inspired Insider with your host, Dr Jeremy Weisz.

Jeremy Weisz  0:22

Dr Jeremy Weisz here, founder of inspiredinsider.com where I talk with inspirational entrepreneurs and leaders. Thanks for tuning in to this special episode where we revisit a previous conversation I had with Jason Swenk. Jason helps agency owners grow their agencies faster. He has created the resources he wished he had when he ran his agency and sold it. Visit jasonswenk.com to learn more. This episode is brought to you by Rise25. At Rise25 we help businesses give to and connect to their dream relationships and partnerships. How do we do that? We do that by helping you run your podcast. We’re an easy button for a company to launch and run a podcast. We do the accountability, the strategy and the full execution. We call ourselves the magic elves that run in the background and make it look easy for the host so they can develop amazing relationships and run their company. For me, the number one thing in my life is relationships, and I’m always looking at ways to give to my best relationships, and I found no better way, over the past decade, than to profile the people and companies I most admire and share with the world what they’re working on. So if you thought about podcasting, you should, if you have questions, go to rise25.com or email us at support at rise25.com

Speaker 1  1:39

Hey everyone, welcome back. Today, we’re gonna be going deep, taking a deep dive into the world of digital agencies. Really deep, specifically what it takes to build one that’s so successful that people are lining up to buy it. Our guide for this journey is a fascinating interview with Jason Swenk.

Speaker 2  2:00

Oh yeah, Jason Swenk.

Speaker 1  2:01

An agency owner who has been there, done that, and now the guy else others do the same.

Speaker 2  2:06

He really knows his stuff, and he doesn’t hold back. Okay, Jason’s got some pretty strong opinions, all right, about what really drives agency value, and it’s not just about hitting a certain revenue number.

Speaker 1  2:19

Okay, so spill the tea. What’s the secret sauce?

Speaker 2  2:22

Profitability, profitability. It’s all about profitability. Okay. Jason uses this term, EBITDA. EBITDA, which stands for earnings before interest, taxes, depreciation and amortization. Okay, think of it as the agency’s true profit muscle.

Speaker 1  2:39

All right. I’m following so far, but give me an example. Why is EBITDA so much more important than just looking at revenue?

Speaker 2  2:45

Okay? Picture this. You’ve got two agencies, okay, both pulling in ten million in revenue. Okay, that sounds impressive, yeah, that sounds pretty good. But agency a has an EBITDA of $3 million while agency B is only at 500,000 Oh, wow, see the difference?

Speaker 1  3:02

Yeah, that’s huge. Agency A is way more efficient, even though they’re bringing in the same amount of top line revenue.

Speaker 2  3:09

Exactly That’s what makes agency a much healthier business and a much more attractive target, for acquisition makes sense. It shows they’re not just burning cash to hit a revenue target, right? They’re actually running a tight ship.

Speaker 1  3:23

So are you saying that some agencies might be inflating their revenue numbers just to look good?

Speaker 2  3:29

It happens more often than you think.

Speaker 1  3:31

They’re not actually.

Speaker 2  3:32

Jason even suggests that Gary Vaynerchuk.

Speaker 1  3:35

Wait, Gary V.

Speaker 2  3:36

Yeah, that Gary V, oh, wow, might be running his agency at a loss.

Speaker 1  3:40

Hold on. Are you saying Gary V might be losing money on his agency?

Speaker 2  3:44

It’s possible.

Speaker 1  3:46

Everywhere. What’s the strategy there?

Speaker 2  3:48

Well, it’s all about the bigger picture. Jason’s theory is that Gary might be using the agency as a loss leader to fuel other parts of his business empire. Oh, okay, it’s a way to build his brand, attract clients, right, generate buzz, okay, even if the agency itself isn’t, yeah, a huge profit center.

Speaker 1  4:08

Okay, that’s pretty smart, actually, it is, but it makes you wonder, how many other seemingly successful agencies, right, might be struggling with profitability behind the scenes.

Speaker 2  4:19

It’s a good reminder that you can’t judge a book by its cover, right? Or, in this case, an agency by its revenue alone.

Speaker 1  4:26

Speaking of judging books by their covers, Jason shared this wild story about an opportunity he had early in his career. Oh, and you’re not gonna believe this. Okay, it involved Elf on the Shelf, Elf on the Shelf, Elf on the Shelf, the holiday toy. Yes, the holiday toy?

Speaker 2  4:44

What does that have to do with digital agencies

Speaker 1  4:47

Well, early on, yeah, Jason was offered the chance to be part of the Elf on the Shelf phenomenon, really, before it blew up. And guess what? He turned it down. Though the whole idea was silly and missed out on what became, wow, a massive holiday tradition.

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