Forum Moderators: LifeinAsia
At any rate, I've personally gotten closer to making a move away from a number of smaller projects and one larger project and I am quite interested in selling sites at reasonable prices.
I have, primarily, actual web sites to sell, all earning money through advertising or direct client relationships, but a few domains that may be of some value as well. My primary interest is in selling the sites, but info on the domains is welcome as well, if anyone cares to comment.
The reason I'm asking here is that there are clearly MANY web sites/companies that offer to sell a business/web site online. These appear to be a bit sketchy to me (nothing wrong with them, I'm just doubting how well they work).
Of course I understand that selling a site or business depends primarily on a legitimate site/business as well as a reasonable asking price (from what I gather, "reasonable" rarely comes into play among those looking to sell a site who have no concept of business valuations, multipliers, risk factors, etc.).
So, if any of you have experiences with selling either a web site, business or domain and would like to share, I would appreciate it greatly. Also (and especially), if you have any success stories in working with a business/site broker, please do share them with me (sticky if you like, when mentioning companies by name or URL).
Looking forward to any and all replies, and perhaps even a renewed discussion of how any of you go about valuing a site, domain or business. I've seen many such discussions, but as it's a topic of interest to many, it can't hurt to talk more about it.
As a final note, I know that such posts are often ignored because of the assumption that the poster has no real knowledge of the subject or nothing legitimate to sell. However, the primary business I'd like to sell in its entirety or in "pieces" produced about $90K per month in revenue last year (with nice profit margins). Nothing earth-shattering, but certainly legitimate.
Thanks,
~Canton
For ex can I make yearly 20 0r 15% return on my investment and can you demonstrate it
Do you have accurate accounting records?
Can the site be maintained by other than the previous owner without adding on cost of operating?
Can the content be updated?
Can you prove the rate of satisfied returning customers?
What is its growth rate?
Will its growth trigger many recoding?
Do you have handy P&L’s, Budget and Forecast
If so use it at your advantage
Advertise on those items availability
Regards
Henry
In March 1999 I started a web business selling business to business. I sold this business at the end of 2003 after having made over $650,000.
Over the last 3 years, average profit was about $185,000 per year. I sold the business for $500,000 which is about 2.7 times earnings.
However finding someone to buy a business is difficult. I did try a broker and he did bring some to my business for several meetings. Having been in business for myself over 30 years, some of these meetings were not to satisfying.
Especially when prospects starting asking prying questions over what they were given that were about my customer base. They wanted a list of my customers and questioned the truthfulness of my answer of at lease 20% of my customers reordered on a regular basis. That was a guess and I felt more than comfortable telling them that. (actual figures were over 50% I later discovered)
I found the process distasteful, especially when someone questions my integrity. I told the broker to remove me from their files, the business was no longer for sale.
So I discovered a different way which worked better for me and my situation. Perhaps this can help you and others that may read this, who knows.
I hired 2 people for my business about 2 years before I ended up selling. When I hired these people it wasn't for the purpose of selling one of them the business, but it did turn out that way. <snip> The workplace had started in my home but because of it's growth had to be moved into a commerical workplace.
Basically what I did was to hire, train and groom the end result buyer. And I might add her husband also was a devout Christian and ended up leaving a good paying job to work in the business with her.
So in fact, anyone could do the same thing if in the hiring process of asking questions you are also determining if they could be a candidate for taking over the business at some point. This also gives you time to learn their work habits, skills and abilities, not to mention their dreams.
This did several things for me as you may be in the same situation as I faced. One I was considering retirement as I was almost 65. Second, few people will come along that can buy you out in cash, and 3, I wanted to pad my retirement somewhat, especially in light of the lousy interest rates.
I sold them the business for $500,000 and completely carried the paper myself. Nothing down except I did insist they put their house up for collaterial. Not that I would ever take it from them because I wouldn't, I wanted them to have something of great value to them at risk and women are funny about the loss of their home.
I set the payments up on a 10 year note at 7-5/8% interest which over 10 years is worth about $225,000. I also put into the contract about a no prepayment clause which almost drove my attorney to drinking.
This was over 6 months ago and what I failed to tell you was the payments were setup on a weekly payment schedule instead of monthly. The smaller payments seem easier to handle than a big one monthly.
Every payment has been made in a timely manner, and I keep abreast of how the business is doing regularly. Contractually I must give them help and/or advice for one year but they know as long as I'm alive they are more than welcome to ask me whatever they want whenever they want to and I'm there to help them.
I did think about keeping the business and paying this employee to run it for me, thus having my cake and eating it to. I choose not to do that as no one will ever take care of your business like you would. To them it's only a job. When they become the owner though, things change. That's why I sold instead of absentee ownership.
It's been great and by the way, even with the turndown in the economy, business is still good. I left it in capable hands before I left (as I did the training) so now I don't worry. <snip>
NOTE: Instead of retiring like I was supposed to, I started another web business from my home.<snip>
Hope this long winded answer does give you some idea of what can be done instead of the broker (used car salesman) approach.
Have a blessed day.
Ken
[edited by: stuntdubl at 3:59 am (utc) on July 11, 2004]
[edit reason] no promo drops or religion please. [/edit]
<humor>
2.7 times earnings! What were you thinking? Didn't anyone tell you that online businesses should be valued at 100+ times earnings?
</humor>
Ken....Good job! Personally I value online businesses at 2 to 10 times earnings + assets. Anyone offering close to 10 and I will attempt to close the sale within 24 hours, if they offer close to 3 times earnings I consider it a good deal.
We live in a world where prices have little relationship to earnings. It is nice to see at least one other WW member with his head screwed on the right way ;)
