Scaling a Digital Marketing Agency: How Mike Built, Grew, and Sold a Seven-Figure Agency
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Like many online entrepreneurs, Mike Belasco‘s journey began with an affiliate website. His success with that site led to digital marketing work for clients and eventually, an SEO agency.
Earlier this year, Mike sold his agency, Inflow, after running it for 17 years. During that period, Inflow was included in the Inc. 5000 list of the fastest-growing private companies three times. By the time he sold the business in 2024, Inflow had exceeded $4 million in annual revenue and expanded to a team of 35 employees.
Mike’s exit was a bit different than the typical agency owner’s because he sold Inflow to one of the company’s executives, Jen Holzman.
Now, after stepping away from his role as an agency owner, Mike is looking to acquire an e-commerce business, and he started Altitude Search Fund to assist in the process.
In this interview, Mike shares the details about how he grew from a one-man operation to a seven-figure agency, why he sold, the benefits of an internal acquisition, and more.
Please tell us about your background and how Inflow came about.
After I graduated from the University of Colorado with a degree in Business Information Systems, I had a few different web developer jobs. I started a poker/sports betting affiliate site and did well with it, but shut it down after a couple of years as I was nervous about the legality.
I decided to take what I learned and offer services to other businesses as Mike The Internet Guy. I found a niche in offering SEO services to other marketing agencies, web designers, etc., and eventually rebranded to seOverflow (2007).
After only doing SEO we expanded to paid search and eventually “niched down” to eCommerce. I then started a new company with a partner called ConversionIQ focusing on conversion optimization. Eventually, I bought out my partner and rebranded the company to Inflow.
What were some key strategies that helped Inflow grow into a successful digital marketing agency?
- Getting results: We did great work for some excellent companies so we had high client retention.
- Content marketing: Almost all of our leads that were not referrals came from our own content marketing, both on our site and other sites like Moz.
- Niching down: While I would consider “eCommerce” too big of a niche for an SEO company today, this was not always the case in 2015.
How did you build and maintain a strong company culture as your team expanded?
It took a while but eventually, I created the Inflow harmonic triangle. This concept helped us as a management team to think carefully about decisions and how they affected each stakeholder group. In addition, it was a concept the employees could understand as a framework for how we looked at our business in general.
It also helped that we shared profit with our team each quarter. The team was and could feel like they were making a difference, good or bad, in the business and benefited from performing well for our clients.
What were the biggest challenges you faced during Inflow’s growth, and how did you overcome them?
Offering three different service lines from three different teams, each with its own culture was a very difficult undertaking.
We wanted to provide a “seamless” experience for clients working with more than one of our teams. That was really challenging when the teams were using different tools, had different communication styles, and didn’t communicate as well as I would have liked.
We worked hard and did improve greatly in those areas, but it was a tough road.
What motivated you to sell the company after 17 years, and why did you choose an internal sale?
Honestly, after 17 years of running the agency, I was feeling a bit burnt out. I didn’t have the drive I used to and didn’t want the agency, the employees, or the clients to be negatively affected.
I chose an internal sale because I was proud of what I built and wanted to keep things at the agency relatively the same for clients and employees. An internal sale also offered a quicker and easier exit given the COO who purchased the agency already knew almost everything there was to know about the agency, reducing the amount of due diligence that needed to be done and eliminating surprises that can arise in these transactions.
What did the transition period look like after the sale, and how did you ensure a smooth handover for your clients and team?
The transition was pretty easy since the buyer was already on our Executive Team. This is a major advantage to an internal sale. We announced the sale to the staff on the day of closing. We didn’t keep it a secret from the public but there wasn’t a need to go make big announcements that could stir up more trouble than they were worth.
What lessons did you learn from the selling process that you would share with other business owners looking to sell?
I’ve learned a lot since the deal about M&A and acquisition entrepreneurship, having gone through the Acquisition Lab program and diving headfirst into the ETA space in the last year and a half. There are a lot of things I would have done differently with the deal and even before the deal. I didn’t understand, for example, how an individual investor with an SBA loan could actually buy a successful business and therefore wasn’t interested in taking those calls along the way.
I am also producing a workshop with Karl Sakas called “Control and Maximize Your Agency Exit” to help educate other owners on creating an exit strategy that meets their personal needs and goals.
What advice would you give to agency owners who want to build a company that’s attractive to potential buyers?
- Niche down and/or offer productized services
- Focus on recurring revenue streams
- Build a solid team that benefits from positive company performance
What inspired you to start Altitude Search Fund, and what are your goals for this new venture?
Altitude Search Fund is really just a brand/vehicle to use during my search for a new business to buy. I felt it was more professional to develop a brand with a website and email address that I could use to communicate with brokers, sellers, bankers, etc.
Why have you chosen to focus on acquiring an e-commerce business, and what qualities or metrics are you looking for in a potential acquisition?
As mentioned earlier, Inflow had been focusing on eCommerce companies for a long time before I sold. It’s an area I have a lot of experience with and feel comfortable that I can use my skills to tackle a growth opportunity with a potential acquisition.
What is your long-term vision for Altitude Search Fund and the e-commerce business you aim to acquire?
My longer-term vision is to utilize the search fund vehicle to purchase another business (likely an eCommerce business). I’d like that business to be something I can align with personally and I’d like it to provide me the opportunity to continue practicing digital marketing, especially SEO and Analytics. I’d like for there to be a small team that doesn’t rely on me for day-to-day operations.
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