How to Sell a Service Business Without an Earn Out

Built To Sell Radio Episode # 292

In 2011, Jodie Cook started an eponymously named social media agency, JC Social Media. Over the next nine years, Cook built the business up to 16 employees. Then, she decided to sell at the end of 2020 and thought her company could be worth in the 5-7 times EBITDA range.


Cook’s first offer was five times EBITDA, with approximately 20% of proceeds tied to a three-year earn-out. Cook realized she had failed to make it clear that she would not be accepting an earn-out. Cook pushed on, explaining why she was redundant and made the case to potential acquirers why her business would do better without her. Cook received two additional offers and accepted one at the top end of the range she was hoping for. She left two weeks later.


In this episode, you’ll discover how to:

  • Make your company’s brand bigger than your own.

  • Document processes people will use.

  • Transfer something Cook calls “tacit knowledge” onto your team.

  • Make everyone in your company a leader.

  • Get clear on what you want from a team.

  • Distinguish between a lifestyle vs. performance team.

  • Think about “chemistry” meetings with potential acquirers.

  • Merchandise your “second-tier” management to your potential acquirers.

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More About Jodie Cook

Jodie Cook built and sold her social media agency and now writes books and articles about entrepreneurship. Stop Acting Like You’re Going To Live Forever, volumes one and two with accompanying guided journals, cover how to run a business without it running you.

How To Raise Entrepreneurial Kids combines childhood stories from 150+ entrepreneurs and was co-written with Daniel Priestley. Children’s storybook series, Clever Tykes, gives entrepreneurial role models to 6-9-year-olds and is read in every UK primary school.

Jodie contributes articles for Forbes on the topics of entrepreneurship, happiness, and lifestyle design and gave a TEDx talk with the title Creating Useful People. Jodie’s work empowers others to find the happiness and success they seek. Find all books and articles at: jodiecook.com/writer.

Have You Figured Out wHAT yOU wANT tO dO After You Sell Your Business?

Part of Jodie's success was that she knew exactly what she wanted from selling her business and went for it. If you're still not certain, go ahead and download our eBook - The Exit Checklist: A 5-step Personal Action Plan For A Happy (And Lucrative) Exit From Your Business.