Selling my online store, what else can I do?

[wayzgoose]

Jeez, you lot are giving this fella a hard time! It's pretty obvious from his first post, that this is a little home run business. At the end of his financial year he had turned over £43k. At the same time, after working for a morning each day, there was an extra £28k in his bank/pocket/under the bed. He just asked for a guide price of what he should offer the business for. 99% of the replies are totally useless and not required.

 

[DoolallyTap]

It isn't.



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?

It isn't, tell me which sensible question has not been answeref.
Yes there was an error in the Daltons ad, now edited, You obviously did not read the Daltons advert carefully because it had 2 different values shown for the stock, now amended.

 

[DoolallyTap]

Jeez, you lot are giving this fella a hard time! It's pretty obvious from his first post, that this is a little home run business. At the end of his financial year he had turned over £43k. At the same time, after working for a morning each day, there was an extra £28k in his bank/pocket/under the bed. He just asked for a guide price of what he should offer the business for. 99% of the replies are totally useless and not required.

Thank you for your comment, at last someone sees it for what it really is. There are plenty of people who would love to own this and build on it, they just need to be found, so the original question still stands, 'what else can I do'

 

[DontAsk]

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?

So how many hours per year do you put in? You might be on less than NMW in which case it's not a viable business. If you are making £30/hr than a buyer might pay someone £20/hr and take the rest as their "profit".

 

[DoolallyTap]

So how many hours per year do you put in? You might be on less than NMW in which case it's not a viable business. If you are making £30/hr than a buyer might pay someone £20/hr and take the rest as their "profit".

I really only put in about 4 hours a day now, sometimes less. The biggest original job was to get the bulk of the items listed although this is quite easy with Excel. As I previously said, I am 74 and it gives me something to do. It really needs someone similar or a couple who can see the growth potential. I do not appear on eBay so there is huge potential there to list items perhaps in a slightly different way. Social media is also something I don't do. I know there is ample opportunity to grow this significantly.

 

[UKSBD]

I really only put in about 4 hours a day now, sometimes less. The biggest original job was to get the bulk of the items listed although this is quite easy with Excel. As I previously said, I am 74 and it gives me something to do. It really needs someone similar or a couple who can see the growth potential. I do not appear on eBay so there is huge potential there to list items perhaps in a slightly different way. Social media is also something I don't do. I know there is ample opportunity to grow this significantly.

in an earler post you said;
"Turnover for the latest 12 months, September 2023-October 2024 to date,
Sales £41000.
Cost of sales £1913
Gross Profit £39087"

Is the "cost of sales" the price you paid for the items?

 

[DoolallyTap]

in an earler post you said;
"Turnover for the latest 12 months, September 2023-October 2024 to date,
Sales £41000.
Cost of sales £1913
Gross Profit £39087"

Is the "cost of sales" the price you paid for the items?

That's an interesting question, what do you think 'cost of stock' means
Are you seriously interested in investigating a purchase for the shop?

 

[thetiger2015]

You're all reading way too much in to this.

It's a hobby business, it could be ideal for an ecommerce start-up person who wants something setup and ready to build on and grow in to a moderately comfortable business with a couple of employees over time.

Equally, a competitor who already does something similar may be interested in acquiring the website/stock/equipment etc at a discounted price.

The 'value' is in the stock, equipment and whether you include the previous 12 months turnover or not. If you have a business that does something similar, this could be a relatively quick way of adding £48k to your turnover for very little cost. The traffic is there, there's presumably return customers, an email database?

Sure, it's not going to be part of a multi-million pound mega deal but the alternative is just to close it and lose all the work of building it to this stage.

I think it's hard to value. It needs someone doing something similar, so they can just bolt this on to what they're already doing.

 

[Clinton]

I think it's hard to value.

It's not hard to value, it's easy. The value is £0.

It may be possible to get someone to pay a few grand for it, but you need to find the right buyer. The right buyer is someone who has an operation like this AND has some spare time to bolt this on AND has some money he can spend on buying this business + stock AND who has the stomach to take the risk AND who doesn't know much about business valuation AND who's willing to buy a business without professional legal assistance.

The amount of time and effort that goes into finding a buyer like this is far more than one could normally get for the business.

I say this as someone who bought and sold small online businesses like this, many of them, well over two decades ago (long before Flippa existed - I used to buy these businesses when Flippa was part of the Sitepoint forum). There is far less appetite for them now as it's pretty easy to create a website and do some SEO. I'm a kick-ass SEO. It would cost me less than £50 to take this guy on, build a site, optimise it and start competing with him. It wouldn't take me more than a few months, if that, to hit his level of sales. A buyer would be completely nuts to pay him tens of thousands of pounds.

You're all reading way too much in to this.

You're reading way too little.

 

[UKSBD]

You're all reading way too much in to this.

I think most people who you think are "reading too much in to this" know the OP's previous posting history.

 

[DontAsk]

I really only put in about 4 hours a day now, sometimes less.

So lets say 1000hrs/yr that's £28/hr. Might make a decent little job for someone, but they will not be on anything like that same hourly rate once they have accounted for recouping what they need to pay for the job.

 

[fisicx]

So lets say 1000hrs/yr that's £28/hr. Might make a decent little job for someone

But it is a job. That's the point Clinton was making. It's not a business I could buy that runs itself. I have to put in all the work. If I have to do that I can source my own supplier of croc ornaments, set up a website and a bit of PPC and it's good to go.

 

[japancool]

So your question is what more you can do to find a buyer?

Then I'll answer that question: stop being a dick.

Mods, delete this post if you want, I'm putting him on ignore anyway.

 

[BusterBloodvessel]

There are plenty of people who would love to own this and build on it, they just need to be found

I would argue if they were that plentiful, they wouldn't need to be found.

My personal advice for the type of buyer you are likely to attract would be to forget Daltons etc, lower the asking price to something around the £5k - £10k mark plus stock. Hawk it around your local Facebook groups and look for someone close to home with a bit of redundancy cash or savings burning a hole in their pockets and that wants a project that you could hand over to them and spend some time with locally getting them going.

Potentially offering staged repayments on the stock side of things (would have to get a watertight agreement, somehow) would make it much more appealing, too. Realistically, the kind of buyer you'll find for this kind of business isn't the kind of buyer to have £35k - £40k in total just lying around and be willing to lump £28k of it into stock.

 

[Lucan Unlordly]

No, he's not. Technically, it's a business.

You were doing so well Clinton

 

[DoolallyTap]

There just seems to be so much anger and negativity among you people. Why argue over 'is it a business, is it a job?' what's that all about, does it matter, it produces a profit whatever you call it. I call it a hobby and before you say 'get a life' play golf or do something else how do you know if I have no legs and only 1 arm, or a terminal illness that stops any other activity.
Yes, of course you could source the product, make a website, become competition etc.. And, the guy who says - It would cost me less than £50 to take this guy on, - what nonsense, he purports to be hugely successful, if that's the case and it took him 4 months at his hourly rate of pay to build it and manage it, what would the true cost. Buying something proven and up and running rather than starting new should be anyone's consideration.
It's a hobby business, it could be ideal for an ecommerce start-up person who wants something setup and ready to build on and grow in to a moderately comfortable business with a couple of employees over time.
How many times have I said, the asking price is negotiable, 2x current profit does not seem excessive, but everyone interested is going to make an offer.
There may be a couple with a modest inheritance or capital who want to work from home, together, who have some vision and can see potential. Entrepreneurs and positive mental attitude exists, perhaps most of you lot are just jealous, you spend your time in this forum because you cannot get your acts together and have nothing better to do, you have no vision, no money, no potential, so it's easier to just negative comment to make yourself fell better.
Quite frankly the majority of you have irritated me with your pathetic comments which have added nothing to the thread, I just cannot but wonder why you bother to get involved.
No doubt this will set you all on fire, again.

 

[fisicx]

If you think that’s the value of your business and your pitch is convincing then I’m sure you will get lots of offers. But not here on UKBF.

We already have jobs and little desire to take on another.

Which means you need to research other platforms to sell your business.

Or perhaps employ someone to run the business for you. That way you can retire but still earn an income.

 

[BusterBloodvessel]

There just seems to be so much anger and negativity among you people. Why argue over 'is it a business, is it a job?' what's that all about, does it matter, it produces a profit whatever you call it. I call it a hobby and before you say 'get a life' play golf or do something else how do you know if I have no legs and only 1 arm, or a terminal illness that stops any other activity.
Yes, of course you could source the product, make a website, become competition etc.. And, the guy who says - It would cost me less than £50 to take this guy on, - what nonsense, he purports to be hugely successful, if that's the case and it took him 4 months at his hourly rate of pay to build it and manage it, what would the true cost. Buying something proven and up and running rather than starting new should be anyone's consideration.
It's a hobby business, it could be ideal for an ecommerce start-up person who wants something setup and ready to build on and grow in to a moderately comfortable business with a couple of employees over time.
How many times have I said, the asking price is negotiable, 2x current profit does not seem excessive, but everyone interested is going to make an offer.
There may be a couple with a modest inheritance or capital who want to work from home, together, who have some vision and can see potential. Entrepreneurs and positive mental attitude exists, perhaps most of you lot are just jealous, you spend your time in this forum because you cannot get your acts together and have nothing better to do, you have no vision, no money, no potential, so it's easier to just negative comment to make yourself fell better.
Quite frankly the majority of you have irritated me with your pathetic comments which have added nothing to the thread, I just cannot but wonder why you bother to get involved.
No doubt this will set you all on fire, again.

Dear oh dear oh dear. I won't go to the effort of handing you your toys back, you'll only throw them out of the pram again.

As I said before, what are you actually hoping to achieve? You believe that 2x profit "does not seem excessive". Except, you haven't sold your business yet. So perhaps, just perhaps.... it is?

You seem to be on here with an attitude that you've valued it reasonably and that all you're missing is the magical secret location of where all the prospective buyers are hanging out. News flash.... it's nowhere. So to your question...."What else can you do?" Review your offer and asking price. OR.....

....The biggest issue IMO for any potential buyer is going to be the stock. You've got £25k of stock, cost of sales last year was less than £2k. You've got dead stock, despite saying you haven't. As an average you've got approaching 15 years worth! Nobody is going to want to sink £25k into a load of stock with a view to not recouping that for 15 years. So If you want to make it more attractive I'd seriously review your inventory, see what you can move through and turn into cash for yourself and make it an easier proposition for someone to come along and take a more lean business off your hands without such a huge upfront lump sum.

 

[Mark T Jones]

There just seems to be so much anger and negativity among you people.

The irony isn't lost on me...

The reason you aren't getting a value is because there isn't one. The only asset you have that can have a value put on it is stock (SAV), which by definition can't be set until the point of sale. Typically it will be cost less a bit for damages and depreciation.

Beyond that, your job is to sell the value of what you have - probably against the alternative option of time/skills/effort of setting up something similar on their own.

If you pitch it realistically, you should at least be in a position to negotiate - as long as you listen and communicate, rather than the cycle of defence & attack which seems to creep into all of your posts.

If you genuinely believe you can sell for 2 X Profit, give it a go, and hear the feedback.

 

[Clinton]

And, the guy who says - It would cost me less than £50 to take this guy on, - what nonsense, he purports to be hugely successful, if that's the case and it took him 4 months at his hourly rate of pay to build it and manage it, what would the true cost. Buying something proven and up and running rather than starting new should be anyone's consideration.

You're right, it wouldn't be a productive use of my time. I spent the last few days writing The World's Most Comprehensive Guide To Selling Mid-Market Businesses (businesses with over £5m in value) as that's my market.

That article alone will generate several hundred thousand in revenue for me over the next few years. But, but, but ....

You don't need someone like me to take you on. I'll wager that I can find a savvy kid, someone good with SEO and Instagram and Tikkity Tok, give him some mentoring in the background, and have him compete with you and generate, within a few months, more profit than you're generating. You willing to put £5K on a wager? I'll deposit my £5K with any mutually agreed third party. Would you?

This is what you need to look at with these 'businesses': What is the barrier to entry? How long would it take and how much would it cost for someone to build this if they started from scratch today?

If it'll cost a meagre grand or two, it's unlikely you'll get your fancy tens of thousands of pounds for your business. You don't like the message, sure. Nobody likes to be told that their baby is ugly. I get that.

But the proof is in the results. The business is not selling. Can YOU tell us why?

 

[BusterBloodvessel]

This is what you need to look at with these 'businesses': What is the barrier to entry? How long would it take and how much would it cost for someone to build this if they started from scratch today?

We should put this as a default response to many of the similar threads to this one. This is the point, how much marketing, to grow a similar business from scratch, could you do with even 50% of the owners asking price? Answer.... a LOT!

Nobody likes to be told that their baby is ugly. I get that.

This is a line I am going to find myself using regularly.

 

[DWS]

This is a line I am going to find myself using regularly.

Seeing as it’s about 40 years old I wouldn’t bother, the line I mean not the baby!

 

[James]

The 2 x profit sounds about right to me. The difficulty for anyone looking at this is what is the profit. My interpretation would be the costs including Labour as below.

Sales £41000.
Cost of sales £1913
Gross Profit £39087
Expenses £10500, Webhosting, Google, SEO, Franking machine, sundries etc.
Surplus £28587
Labour £16000 (4hr x 260days = 1040hr x £15)

£12587 X 2 = Circa £25k + stock at cost (for someone that is interested)

I have never bought a business nor run a business with stock ect so might well off.

 

[UKSBD]

The 2 x profit sounds about right to me. The difficulty for anyone looking at this is what is the profit. My interpretation would be the costs including Labour as below.

Sales £41000.
Cost of sales £1913
Gross Profit £39087
Expenses £10500, Webhosting, Google, SEO, Franking machine, sundries etc.
Surplus £28587
Labour £16000 (4hr x 260days = 1040hr x £15)

£12587 X 2 = Circa £25k + stock at cost (for someone that is interested)

I have never bought a business nor run a business with stock ect so might well off.

Your assuming he can sell the remaining stock

When you buy products like that you might have to buy 100 of what nobody wants to get the 1 product that a person does want

He's made a profit of £28K but is sat there with £29k of stock which he hasn't sold.

In effect, if that stock doesn't sell, he's been doing all those hours and lost money.

 

[James]

Your assuming he can sell the remaining stock

When you buy products like that you might have to buy 100 of what nobody wants to get the 1 product that a person does want

He's made a profit of £28K but is sat there with £29k of stock which he hasn't sold.

In effect, if that stock doesn't sell, he's been doing all those hours and lost money.

is that £29k of stock at cost or sell value ?

 

[fisicx]

I have never bought a business nor run a business with stock ect so might well off.

You are. The stock is the dead weight. Unless everything sells like hot cakes and you are constantly restocking. But that doesn't seem to be the case.

 

[UKSBD]

is that £29k of stock at cost or sell value ?

You would have to ask the OP that
He says the deal will include £29k of stock so I would assume it is the price he paid for it.

If not, he needs to make that clear to any potential buyer

 

[James]

You would have to ask the OP that
He says the deal will include £29k of stock so I would assume it is the price he paid for it.

If not, he needs to make that clear to any potential buyer

In that case its 15 years of stock so as fiisicx said its dead weight

 

[fisicx]

In that case its 15 years of stock so as fiisicx said its dead weight

Looking at the website I'd hazard a guess that a lot of that stock will still be in boxes after 15 years. I could be wrong but I don't think Mr Doolally will be back to give us the details

 

[AlanJ1]

I was told:

"There is no dead stock, there is no logic to what people buy and it is quite amazing what some of the choices are. The cost of each piece is so low that even in a fire sale situation the actual cost would be recouped or even still make a modest profit."

I asked to see a stock list.

 

[UKSBD]

In that case its 15 years of stock so as fiisicx said its dead weight

He might be saying he has £29k worth of stock based on the fact he sold £1900 and made a proft of £28k on it

ie.
he says there is £29k of stock, but he only paid £2k for it.

 

[AlanJ1]

Well, my offer (legitimate offer) got turned down so I am out.

 

[DoolallyTap]

He might be saying he has £29k worth of stock based on the fact he sold £1900 and made a proft of £28k on it

ie.
he says there is £29k of stock, but he only paid £2k for it.

How do you work that one out, amazing, This comment is just so stupid and wrong.
Try to understand this simple set of accounts
Sales £41000.
Cost of sales £1913
Gross Profit £39087
Expenses
Web hosting, google, franking machine rental £11000
Net profit £28000

Current stock holding at cost £28000

 

[UKSBD]

That's what I said in the 1st place, but when @James querried it I said the OP would have to confirm it.

 

[UKSBD]

Back to the original question

"Selling my online store, what else can I do?"

I would readvertise it, but don't mention the stock.

Mentioning you have £28k of stock and the fact you only sold £2k's worth in the previous 12 months makes things look bad.

 

[Clinton]

Back to the original question

"Selling my online store, what else can I do?"

I would readvertise it, but don't mention the stock.

Mentioning you have £28k of stock and the fact you only sold £2k's worth in the previous 12 months makes things look bad.

In a business sale situation, that would be considered deception. If you need to hold nearly £30K of stock to service the orders, and you move only £2K of that stock in the year, that's a material fact and is disclosable.

 

[UKSBD]

In a business sale situation, that would be considered deception. If you need to hold nearly £30K of stock to service the orders, and you move only £2K of that stock in the year, that's a material fact and is disclosable.

In an initial advert?

 

[NickGrogan]

How do you work that one out, amazing, This comment is just so stupid and wrong.
Try to understand this simple set of accounts
Sales £41000.
Cost of sales £1913
Gross Profit £39087
Expenses
Web hosting, google, franking machine rental £11000
Net profit £28000

Current stock holding at cost £28000

Why are you holding 14 years worth of stock?

Is some of it old/outdated/out of fashion?

How many different items do you hold?

How many different items have you sold in the last 12 months?

It sounds like you're sitting on £20k+ of non selling stock, this has no/very little value

 

[Clinton]

In an initial advert?

Yes.

A deception is a deception whenever it happens. In a business sale situation, a non-disclosure of a major material fact, with the sole goal of creating a false impression, is not 'marketing'. It's concealment designed to mislead (even in the unlikely event there's intention to disclose the material fact later).

 

[Lucan Unlordly]

You don't need someone like me to take you on. I'll wager that I can find a savvy kid, someone good with SEO and Instagram and Tikkity Tok, give him some mentoring in the background, and have him compete with you and generate, within a few months, more profit than you're generating. You willing to put £5K on a wager? I'll deposit my £5K with any mutually agreed third party. Would you?

Who's going to source, negotiate price and buy the stock, sort out shipping, storage, insurance, bank accounts, payroll, cover when this kids sick or hungover?