Business Valuation: What They Don't Tell You At Business School | Spencer Gallagher M&A Expert Interview
Most business owners treat their company like a chore. Spencer Gallagher spent years doing exactly that until a chance meeting changed how he saw his own business, and eventually helped him sell it for millions. In this episode of the Business Growth Podcast, powered by ActionCOACH UK, Spencer breaks down what actually makes a business valuable, and how to build one that someone wants to buy.
Spencer left school at 16 with no qualifications and started his first business in his mum's back garden shed after being made redundant three times in a year. He grew that digital agency 1,100% in five years, built Sky Media's first ever website and Liverpool FC's website, and put Andy Murray on the internet, before selling the business in his late thirties. He's since spent over a decade helping agencies scale and now runs an M&A advisory business.
His core message: understand exactly what makes your type of business valuable, then build toward that number, whether you plan to sell or not.
What You'll Learn:
- Chore vs Asset Mindset: The shift Spencer made after being made redundant three times before starting his own agency in a garden shed.
- How Businesses Are Valued: Operating profit versus EBITDA, and why tech and FMCG businesses often sell on revenue instead of profit.
- The Three 20s Rule: 20% annual growth, 20% EBITDA, no single client worth more than 20% of billings.
- The Now, Next, Future Framework: Mapping what clients need today, next, and in future to stay ahead of buyers' expectations.
- What Buyers Want to See: Why recurring revenue, leadership depth, and marketing sophistication matter more than growth alone.
- How a Sale Works: Valuation, an exit-readiness audit, an information memorandum, 50 dream acquirers, and due diligence.
- Exit Routes Compared: Trade sales, MBOs, employee ownership trusts, mergers, and private equity, and who each suits.
Key Quotes:
\"You've got to look at the business and understand what is it that makes it valuable.\"
\"When you retire, when you sell a business, you go on holiday, you get depressed, and then you die, unless you find new purpose.\"
\"Only the best businesses get bought for any real value.\"
\"Get a coach, get a plan, and get your coach to hold you to account to the plan.\"
Spencer Gallagher's Background:
Spencer Gallagher is an M&A expert who spent 11 years building one of the UK's fastest-growing digital agencies, a Deloitte Tech Fast 50 business, before selling it in 2008. He later helped agency owners scale for 15 years, then moved into M&A, where he now advises marketing and advertising agencies through the full sale process, with a network of around 600 buyers.
Action Steps:
If You Haven't Started: Get your business valued once you pass £1 million in revenue, even as a rough exercise.
If You're Already Growing: Track your three 20s - 20% growth, 20% EBITDA, no client above 20%. Build a list of 50 dream acquirers before due diligence.
For Everyone: Apply the now, next, future framework to your marketing. Invest around 5% of revenue in marketing and find an accountability partner.
Whether you're years from selling or just want a company that runs without you, Spencer's frameworks give you somewhere to start. Subscribe for weekly conversations with the entrepreneurs and experts building real businesses.
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