Selling my online store, what else can I do?

[DoolallyTap]

My website is advertised on Daltons, Rightbiz, BFS and even has a post on the marketplace here. With impressive £28000 net profit on turnover of £43000 what would be the right selling price. The adverts are at 2x profit plus stock, but are potential buyers put off because the net profit is not enough. I only work on this about 4 hours per day, there is much more that can be done to increase the turnover/profit. I understand some people will consider this is currently a wage earning job so what more can I do to find a buyer?
Working from home from a small amount of space, it's not really what some would all a real business, but there is an income stream from day one and it must be quicker and easier to have a running start rather than try to start something new. I assume that for someone starting, they may not have the funds and for bigger fish it may not be big enough, although it would make a good addition to something that already exists.
I'm 74 and really want to quit, the financial return is not the prime motivation, I would like to see this moved on soon. Anyone?

 

[japancool]

£28000 including what you take out or not?

 

[Newchodge]

What would they be buying?

 

[zomex]

It's hard to know what the would be a fair price without seeing the store. I would be very keen to learn more.

 

[DoolallyTap]

You can see the store, www.theshoecharmshop.co.uk.
A new owner would be buying the stock plus the website with all the listings ready made, up and running with orders coming in daily. Access to the supplier base and continuation of the negotiated cost prices. The Google ad accounts with all the reporting data. Significant assistance with the transfer.
To start new would take considerable time and effort to get to where this site is now.

 

[cjd]

Net profit of 65% is not really believable. Did your costs include your salary?

 

[DoolallyTap]

Net profit of 65% is not really believable. Did your costs include your salary?

Seriously interested parties will want see the figures which prove the net profit or to be precise, 'the surplus'.
The profit made by a sole trader is called the surplus from the income generated after allowable expenses. This surplus is what a sole trader can pay themselves, which is called a "drawing".
A high 'surplus' amount is achieved by the difference in cost of stock and selling price which is perfectly believable.
Any party seriously interested will want to examine the figures which can prove this margin to be correct.
Spurious comments add nothing to the discussion topic.

 

[DoolallyTap]

£28000 including what you take out or not?

This figure is the 'surplus' - The profit made by a sole trader is called the surplus from the income generated after allowable expenses. This surplus is what a sole trader can pay themselves, which is called a "drawing".

 

[DoolallyTap]

What would they be buying?

Please read the post in the marketplace.
A new owner would be buying the stock plus the website with all the listings ready made, up and running with orders coming in daily. Access to the supplier base and continuation of the negotiated cost prices. The Google ad accounts with all the reporting data. Significant assistance with the transfer.

 

[cjd]

A high 'surplus' amount is achieved by the difference in cost of stock and selling price which is perfectly believable.

That's gross profit, not net profit as you stated.

Any party seriously interested will want to examine the figures which can prove this margin to be correct.

Any seriously interested party would be a bit worried that you're claiming a gross profit is a net profit.

Spurious comments add nothing to the discussion topic.

Are you prepared to tell us what your actual net profit is before and after your drawings? That's the number that tells us what your business might be worth - or at last gives us a start.

 

[DWS]

That's gross profit, not net profit as you stated.

Any seriously interested party would be a bit worried that you're claiming a gross profit is a net profit.

Are you prepared to tell us what your actual net profit is before and after your drawings? That's the number that tells us what your business might be worth - or at last gives us a start.

Why?
The OP has given the profit as a sole trader, this is not a Company as far as I can see, drawings should not come in to it!
One person may need to 50k in drawings another may only need 3k
Drawings are irrelevant to a sole trader business!

 

[UKSBD]

What is the time period the figures are based on?
is it a single tax year or how long you have been doing it?

 

[zomex]

Why?
The OP has given the profit as a sole trader, this is not a Company as far as I can see, drawings should not come in to it!
One person may need to 50k in drawings another may only need 3k
Drawings are irrelevant to a sole trader business!

Fair point but I do believe it's an important distinction

 

[cjd]

Why?
The OP has given the profit as a sole trader, this is not a Company as far as I can see, drawings should not come in to it!
One person may need to 50k in drawings another may only need 3k
Drawings are irrelevant to a sole trader business!

The OP told us that his NET PROFIT was an "impressive" £28,000 on a turnover of £43,000. He was wrong. Let's just call that a mistake.

He now tells us that the £28,000 is the difference between what he buys the stock for and what he sells it for. That's gross profit.

He has not told us what his other expenses are which would tell us the actual profit of the business he's trying to value. One of those expenses(there will be several others) is what he pays himself.

We need to know what he pays himself so we can understand the underlying profitability of the business.

 

[DWS]

The OP told us that his NET PROFIT was an "impressive" £28,000 on a turnover of £43,000. He was wrong. Let's just call that a mistake.

He now tells us that the £28,000 is the difference between what he buys the stock for and what he sells it for. That's gross profit.

He has not told us what his other expenses are which would tell us the actual profit of the business he's trying to value. One of those expenses(there will be several others) is what he pays himself.

We need to know what he pays himself so we can understand the underlying profitability of the business.

So how does what he pays himself affect the profit ?

 

[Newchodge]

So how does what he pays himself affect the profit ?

It may be more indicative if cost of labour were estimated so 4 hours/day * x days/week @ 11.44 per hour. In order to achieve that profit he says he works 4 hours per day, but not how many days/week.

 

[DWS]

It may be more indicative if cost of labour were estimated so 4 hours/day * x days/week @ 11.44 per hour. In order to achieve that profit he says he works 4 hours per day, but not how many days/week.

That may help a buyer understand how much time is spent on the business and I agree this is important, but it still has no affect on the profit mentioned by the OP

 

[DoolallyTap]

I am sorry you have become confused with my grosses and nets, put it down to senile decay.
Please read the original post in this forum marketplace - products and retail, that may help a fuller understanding. It seems one must be so precise and accurate to avoid the comments and criticisms.
I did mention in the original post - Not looking for any criticism, advise, comments or suggestions or 'how to do it' input. Really, anyone seriously interested in discovering more will not be bothered by all the sniping.
Turnover for the latest 12 months, September 2023-October 2024 to date,
Sales £41000.
Cost of sales £1913
Gross Profit £39087

AND YES, THIS IS TRUE, again, anyone seriously interested will not snipe and will want to visit to view and discuss in much greater detail.

Expenses £10500, Webhosting, Google, SEO, Franking machine, sundries etc.

Surplus £28587 For a sole trader, called surplus for a Ltd Company, called net profit, I am a sole trader so my drawings are irrelevant.

CJD - if you are not interested in investigating a purchase, why do you bother to get involved.

 

[Clinton]

With impressive £28000 net profit on turnover of £43000 what would be the right selling price.

I don't consider either the 'net profit' or turnover to be impressive.

I don't consider the 'net profit' as a percentage of turnover impressive either, especially given you work 4 hours a day on this (which any buyer will read as working 8 hours a day) so I don't expect any fancy selling price on this one - maybe see if you can get £5K or £10K.

In your listing thread, you say, "Not looking for any criticism, advise, comments or suggestions or 'how to do it' input."

Okay, I won't offer any suggestions on how to sell this then. You obviously know what you're doing. Good luck.

 

[cjd]

So how does what he pays himself affect the profit ?

Really?

Ok, his net profit is the difference between all his revenue and ALL his costs. One of the costs of his business is employment costs. He can tell us what his 'surplus' is if he likes (ie profit before personal drawings), that would tell us the underlying profitability of his business. It would also tell us what he pays himself. That's how the arithmetic works.

I doesn't matter how he does it or what he calls it but if he doesn't tell us what the actual profitability of the business is, it can't be valued.

So far we only know that he sells things for more than he buys them for. We have no other information about the costs of his running his business. He may be able to draw nothing in which case the business is worthless - we don't know.

 

[DWS]

Really?

Ok, his net profit is the difference between all his revenue and ALL his costs. One of the costs of his business is employment costs. He can tell us what his 'surplus' is if he likes (ie profit before personal drawings), that would tell us the underlying profitability of his business. It would also tell us what he pays himself. That's how the arithmetic works.

I doesn't matter how he does it or what he calls it but if he doesn't tell us what the actual profitability of the business is, it can't be valued.

So far we only know that he sells things for more than he buys them for. We have no other information about the costs of his running his business. He may be able to draw nothing in which case the business is worthless - we don't know.

Yes Really!!
I am an Accountant and I work in facts, the fact is that profit for a sole trader derives from the income and expenditure nothing to do with ‘drawings’ the business will be taxed on profits
Whether the OP spends 10hrs a day doing the work or 10minutes a day the profit according to the accounts will remain the same!

 

[Annoying Donkey]

How about selling to a competitor, especially one that doesn't currently have an online shop, or is outranked by your shop...

 

[cjd]

Yes Really!!
I am an Accountant and I work in facts, the fact is that profit for a sole trader derives from the income and expenditure nothing to do with ‘drawings’ the business will be taxed on profits

Sheesh! We don't know what the profit is! It could be nothing. He told us that net profit was an 'impressive' £28,000. That was nonsense.

I only care what he pays himself so that we can see what profit the business produces. He's told us his income, we need to see his costs. If he doesn't want to tell us what he pays himself he can tell us his total costs without drawings. Fine, but that tells us what he can pay himself doesn't it?

10hrs a day doing the work or 10minutes a day the profit according to the accounts will remain the same!

If he spends 10 minutes a day or 10 hours a day the business will be worth different amounts won't it?

We need to know both profit - real profit - and effort don't we?

 

[DWS]

Sheesh! We don't know what the profit is! It could be nothing. He told us that net profit was an 'impressive' £28,000. That was nonsense.

I only care what he pays himself so that we can see what profit the business produces. He's told us his income, we need to see his costs. If he doesn't want to tell us what he pays himself he can tell us his total costs without drawings. Fine, but that tells us what he can pay himself doesn't it?


If he spends 10 minutes a day or 10 hours a day the business will be worth different amounts won't it?

We need to know both profit - real profit - and effort don't we?

I give up !!
What he pays himself does not affect profit, that’s my final post on this, I cannot see why you are continuing to argue the point.
Can you show me a set of sole trader accounts where ‘drawings’ of what someone pays themselves affect profit?

 

[cjd]

Let me ask you one. What is the value of the OPs business?

 

[DWS]

Okay one more, so to answer your question
Whatever someone will pay for it!
Could be worth loads could be worth absolutely nothing but one thing I can say is that it will have nothing to do with ‘drawings’

 

[cjd]

Okay one more, so to answer your question
Whatever someone will pay for it!
Could be worth loads could be worth absolutely nothing but one thing I can say is that it will have nothing to do with ‘drawings’

How would you work out whether it's worth something or nothing?

 

[DoolallyTap]

Absolutely amazing how some people get into such a tither. All I asked in square one was what is it worth. Seems that Mr cjd just cannot leave it alone, with other people telling him he just won't put it down. Just to put him straight the surplus, net profit £28K, call it whatever you like, this is the amount that has been derived after all the expenses and before drawings or salary. As a sole trader if I took £1k in drawings the surplus would still be £28k. As a limited company if I took £1k in salary the net profit would be £27K, is that simple enough for you?
I see Clinton put his sixpenny worth in by nitpicking over the word 'impressive'. Personally I think making £28K on sales of £43k pretty good, show me some others doing similar percentages. It's not nice, Clinton, calling me a liar, saying,- especially given you work 4 hours a day on this (which any buyer will read as working 8 hours a day), I certainly don't work 8 hours a day. You have no basis to accuse me of lying other than your personal cynicism.

Once again I suggest that anyone seriously interested needs to visit to view and question in detail every aspect of what this opportunity is all about. Once again I have suggested that I am open to any sensible offers regarding the selling price.

All I can say to all readers is if you have no desire or intention to investigate the purchase of this little business, just butt out, go away, don't get involved. What was a perfectly simple well intentioned little question seems to have wound up some people, who perhaps have nothing else to do but make negative comments to post in this forum.

 

[fisicx]

It's worth whatever someone is prepared to pay for it.

Because you need someone to do the work each day its value reduces. This is because I'd need to pay someone minimum wages to do the picking, packaging and posting. This would eat into my profit.

If you were selling a dropshipping or fulfillment business it's value would be much higher.

Right now, all you are offering is part time job.

 

[Socio South West]

I've bought and sold a few businesses of this scale, and helped others devise exit strategies. .

As @Clinton has always said on these boards, it's not really a business per se: It's an earner ok, but not of the scale that anyone could employ anyone or rent premises to build from in its current scale

I have always ignored GP or any financial calculations and worked out roughly what it would cost for someone else working on their own to get to the same set up, and I don't think think asking £10k +SAV as a starting point is very far off the mark.

OP has posted numerous threads about wanting to move this business on - the longer it takes the more incorrect the asking price is. How much does he want to retire?

 

[Lucan Unlordly]

As @Clinton has always said on these boards, it's not really a business per se: It's an earner ok, but not of the scale that anyone could employ anyone or rent premises to build from in its current scale

I've never understood the term 'not really a business'? Is the owner of a corner shop working pretty much alone, putting in more than 40 hours not running a business?

 

[BusterBloodvessel]

I've bought and sold a few businesses of this scale, and helped others devise exit strategies. .

As @Clinton has always said on these boards, it's not really a business per se: It's an earner ok, but not of the scale that anyone could employ anyone or rent premises to build from in its current scale

I have always ignored GP or any financial calculations and worked out roughly what it would cost for someone else working on their own to get to the same set up, and I don't think think asking £10k +SAV as a starting point is very far off the mark.

OP has posted numerous threads about wanting to move this business on - the longer it takes the more incorrect the asking price is. How much does he want to retire?

I think this is somewhere around the mark, however SAV is questionable. Isn't this small badges and a huge variety of them, IIRC?

What's the stock turn on average? If you have to buy 1000 of each badge at a time and only sell 1 a month, asking someone to buy your remaining 980 badges at full value isn't realistic.

 

[Lisa Thomas]

My website is advertised on Daltons, Rightbiz, BFS and even has a post on the marketplace here. With impressive £28000 net profit on turnover of £43000 what would be the right selling price. The adverts are at 2x profit plus stock, but are potential buyers put off because the net profit is not enough. I only work on this about 4 hours per day, there is much more that can be done to increase the turnover/profit. I understand some people will consider this is currently a wage earning job so what more can I do to find a buyer?
Working from home from a small amount of space, it's not really what some would all a real business, but there is an income stream from day one and it must be quicker and easier to have a running start rather than try to start something new. I assume that for someone starting, they may not have the funds and for bigger fish it may not be big enough, although it would make a good addition to something that already exists.
I'm 74 and really want to quit, the financial return is not the prime motivation, I would like to see this moved on soon. Anyone?

I can recommend an agent who can help value and sell your business. Feel free to dm me.

 

[DoolallyTap]

To answer a couple of comments,
The current figures do not allow for paid staff. I do everything myself, ideally it may suit a couple working from home who can see the potential and work together to develop it.
Why is Socio asking other 'how much do i want to retire' what a daft open question, how does anyone else know what I want. As I keep on stating - I am open to any sensible offers regarding the selling price. - and it is interesting to note that, at last, a couple of people have actually thrown their idea of value into the ring.
Why does Buster say - SAV is questionable - perhaps he can explain how he would know this? And why assume I have to buy 1000 of each item to potentially sell 1 a month. Why make such a comment with absolutely no knowledge of the facts.
All I can say, again, to all readers is if you have no desire or intention to fully investigate the purchase of this little business, just butt out, go away, don't get involved.

 

[BusterBloodvessel]

To answer a couple of comments,
The current figures do not allow for paid staff. I do everything myself, ideally it may suit a couple working from home who can see the potential and work together to develop it.
Why is Socio asking other 'how much do i want to retire' what a daft open question, how does anyone else know what I want. As I keep on stating - I am open to any sensible offers regarding the selling price. - and it is interesting to note that, at last, a couple of people have actually thrown their idea of value into the ring.
Why does Buster say - SAV is questionable - perhaps he can explain how he would know this? And why assume I have to buy 1000 of each item to potentially sell 1 a month. Why make such a comment with absolutely no knowledge of the facts.
All I can say, again, to all readers is if you have no desire or intention to fully investigate the purchase of this little business, just butt out, go away, don't get involved.

I was literally questioning it. What's the stock turn? That will vastly effect what it's worth someone paying for the stock. I didn't say you buy 1000 and sell 1 a month, I was giving a (perhaps extreme) example of how the actual figures might affect the value.

You've asked for opinions on what it's worth or what more you can do. I've asked a question that is going to be pertinent to any buyer. If you want to get pissy about that then it's your prerogative.

In fact, I tell you what...let's just make it easier for you and give you the answers you want to hear:

what would be the right selling price.

2x profit plus stock. You've priced it perfectly.

what more can I do to find a buyer?

Nothing. People should be biting your hand off for it.


That suit you better?

 

[DoolallyTap]

A heads up of this mornings (Monday) statistics. Call it whatever you want, business, job, corner shop, waste of time, whatever, no doubt there will be more cynicism, negativity, statements without facts, spurious comments. I wonder if anyone has anything positive to add which may lift the atmosphere a little.
Dashboard Statistics
60
Pending Orders
356
Orders This Month
£3,121.30
Revenue This Month
£8.02
Average Order Value
175
Page Views Today
91%
Checkout Conversion Rate
£13.57
Customer Lifetime Value
5%
Repeat Purchase Rate

 

[BusterBloodvessel]

I've literally no idea what you want to actually achieve with this thread. You've asked for advice, yet anyone asking any sort of question to help formulate advice for you is being accused of sniping/making personal attacks/criticising you.

All of the questions being asked are relevant questions any buyer would ask and could help people help you. Chill out.

 

[Clinton]

I've never understood the term 'not really a business'? Is the owner of a corner shop working pretty much alone, putting in more than 40 hours not running a business?

No, he's not. Technically, it's a business. It might even be a limited company. And you can call it a business ...as long as you're running it yourself.

Once you get to selling it, you need to get into the heads of the people with money. You need to know what they think, how they value businesses, what they want to see.

They think this is a job, they put little to no value in it (as they don't want to PAY to buy a job, they can just take up employment somewhere). What they want to see is a business that delivers a salary for the time they spend in the business and IN ADDITION TO THAT a reward, or 'profit', that compensates them for the risk they're taking and the money they're investing.

Bung salary and profit together if it's a sole prop, sure, but that combined amount needs to be equivalent to both a salary for the buyer AND a profit that's reasonable (they would probably want the profit to be such that they can recover their initial investment in a year or two for a micro business like this one. For larger businesses, their recovery time may be more generous).

 

[DoolallyTap]

I've literally no idea what you want to actually achieve with this thread. You've asked for advice, yet anyone asking any sort of question to help formulate advice for you is being accused of sniping/making personal attacks/criticising you.

Any sensible relevant question has been answered with the correct response. Others, including yourself, have made spurious comments which add nothing to the original question of 'what is it worth'. The original limited information is sufficient for a sensible opinion.
With regard to stock, there is no dead stock, there seems to be no logic in what buyers order and some choices seem to be quite bizarre. This month, the last 21 days, has seen several items with sales of over 30 pieces, obviously some pieces are far more popular. Stock can be obtained with minimum order quantities of only 10 pieces although price is dependent on total quantity ordered. I order in a variety of volumes, obviously with the fastest selling in greater numbers.

 

[BusterBloodvessel]

Any sensible relevant question has been answered with the correct response. Others, including yourself, have made spurious comments which add nothing to the original question of 'what is it worth'. The original limited information is sufficient for a sensible opinion.

It isn't.

Stock can be obtained with minimum order quantities of only 10 pieces although price is dependent on total quantity ordered. I order in a variety of volumes, obviously with the fastest selling in greater numbers.

So why on earth have you got (according to your Daltons ad) stock with a cost value of £60,000 against annual sales of £40k?