A multiple is a measure of confidence

Your multiple is not a reward for twenty years of hard work. It is a measure of the buyer's confidence, and nothing else.

Founders tend to treat the multiple as a grade: for the reputation, the awards, the sacrifices, the quality of the work. Buyers do not grade any of that. A buyer is asking one question: how confident am I in this agency's cash flow over the next three to five years, after the founder has gone? The multiple is the number that confidence produces.

Sit with the arithmetic for a moment. A buyer who pays four times EBITDA is on a five-year mission just to break even if your agency does not grow. That is the bet you are asking them to make. Every risk they can see (the client that is 30% of revenue, the founder who does all the selling, the team that has never run the place alone) shortens the odds against them, and they price it in. Sellers call this being low-balled. It is not. It is risk being removed from the calculation, line by line.

The good news is that every one of those discount factors is fixable, and fixing them is worth more than a year of new business wins. You just cannot fix them during due diligence. You fix them in the two or three years before, which is board-level work, and it is the work I do.