Trying to sell my online business

[WizMac]

Hi there

Due to various personal reasons, I'm looking to sell my online business.
On different marketplaces (like Flippa.com) my business is evaluated $70000-$90000, but I'm not having any luck finding buyers on flippa site.

Does any of you guys know how to help me. Where do you suggest I should start?

Thanks in advance for your responses.

 

[Clinton]

...my business is evaluated $70000-$90000, but I'm not having any luck finding buyers on flippa site.

Maybe it ain't worth anything like $70K!

What's the basis for the valuation?

What's the revenue and what's the annual profit? For how long have you been profitable?

 

[WizMac]

Maybe it ain't worth anything like $70K!

What's the basis for the valuation?

What's the revenue and what's the annual profit? For how long have you been profitable?

No, I think it's a good price and the marketplaces have confirmed it.

About business.
I'm selling my own e-commerce software/script, there is a customers base, and it has good potential for growth.
Income on average $1500-$3500/month (sometimes $5000-$7000).
Annual profit on average: $40K-$50K

 

[Clinton]

If the annual profit is $50K, IF, there's something seriously wrong with the business if it's not attracting $70K offers.

I'm very familiar with Flippa. I used to be the most active buyer there when it first started (though have only dropped in and out over the years). I've bought and sold numerous online businesses, including script based businesses like yours (sites like chameleonflash.com, swfmaestro.com etc) though I no longer do this).

I do not now recommend Flippa, I think they're a bunch of crooks, but fortunately there are many alternatives.

Income on average $1500-$3500/month (sometimes $5000-$7000).

An average is "a" number, not a wide range, certainly not multiple ranges!

Your annual profit figures don't make sense. At the bottom end of your range, the $1,500 pm, the annual revenue is $18,000. How did you get an annual $40K profit out of an $18K turnover?

At the top end of your range, the $3,500 pm, the annual revenue is $42,000. How did you get an annual profit figure of $50K out of that?

You need to get smarter with numbers and your presentation of numbers. I asked you for an average profit and you blabbered on without giving me that one simple number! I'm no smarter now about your earnings than I was before your post.

Buyers don't like dealing with people who don't understand their own numbers. It's not a buyer's job to wring things out of you. I personally would drop a seller the moment I realised he was clueless on the numbers, it's just too much hard work dealing with sellers like that. If he can't give me even basic info on financials, he's going to be a nightmare when I start talking TTMs, churn rates, referrer stats, whatever.

Also, all this fuzziness with accounts makes you look dodgy! I recommend talking to an accountant or someone to tidy up your figures, explain revenue and profit, explain gross profit vs net profit etc etc, and put together some professional looking figures.

One last thing, if your average monthly revenue is $1,500 pm, that's $18,000 in turnover, obviously less than $18K in actual profit, and you may need to start by putting your $80K valuation in the bin.

 

[WizMac]

Your annual profit figures don't make sense. At the bottom end of your range, the $1,500 pm, the annual revenue is $18,000. How did you get an annual $40K profit out of an $18K turnover?

At the top end of your range, the $3,500 pm, the annual revenue is $42,000. How did you get an annual profit figure of $50K out of that?

I apologize, it's my fault, typo. I wanted to write $2500-$3500 (this is minimal, not max revenue per month).

I just count the profitability in months and said approximately.
The annual income that I wrote is more accurate. There were even months when the income was around $10,000/month (clients ordered additional customization of their project).
I'm just not an accountant and I've never sold a business before.

 

[Clinton]

I still don't have an average of either the revenue or profit!

Seriously, do you even know what 'average' means?!

I give up.

Good luck!

 

[fisicx]

@WizMac - what is this online business? How much of it relies on you doing things? Or is it fully automated?

How much profit did you make in the last financial year after all costs, wages, taxes and everything else was deducted.

I also agree with @Clinton, the valuations on flippa are pure guesswork.

 

[Mark T Jones]

In addition to key numbers with 3 year spread

What are they actually buying

IP
Recurring income
Process
Anything else

Potential is the buyer's reward, not a premium

 

[WizMac]

[- what is this online business? How much of it relies on you doing things? Or is it fully automated?

How much profit did you make in the last financial year after all costs, wages, taxes and everything else was deducted.

Yes, its fully automated business. As I said before, I have my own php ecommerce software and selling it for clients from all over the world.
Approx $40,000 Net Profit last year

 

[fisicx]

Yes, its fully automated business. As I said before, I have my own php ecommerce software and selling it for clients from all over the world.
Approx $40,000 Net Profit last year

Were you the developer? If not who looks after the updates?

 

[Mark T Jones]

Yes, its fully automated business. As I said before, I have my own php ecommerce software and selling it for clients from all over the world.
Approx $40,000 Net Profit last year

40k before or after your salary/drawings?

If after, how much did you take?

I think both the approach and the platform may be wrong, this grudging disclosure is quite off-putting

 

[fisicx]

If it's fully automated does that mean there is zero input from you at any time? No support required, no helping clients set up the software, no marketing?

Who does the customisations?

Would the new owner need any skills at all to be able to run the business?

It would help at least if you could link to the website or the flippa listing.

As already suggested, the numbers don't work.

 

[WaveJumper]

Simply put the numbers make no sense

 

[WizMac]

Simply put the numbers make no sense

Are you interested in purchasing?
I have all proofs, can provide admin panel screenshots, payouts stats, etc. Not a problem.
That's why I only gave numbers.

 

[WizMac]

If it's fully automated does that mean there is zero input from you at any time? No support required, no helping clients set up the software, no marketing?

Who does the customisations?

Would the new owner need any skills at all to be able to run the business?

It would help at least if you could link to the website or the flippa listing.

As already suggested, the numbers don't work.

When I said automated, I meant that it is configured and sales are automatic. You only need to link your payment system.

New owner without developer knowledge can easily run it.

Of course, you need to devote time to messages from the site, support tickets and it is desirable to release updates periodically (current version is stable anyway). But any full stack developer can handle this, I mean release updated/make customization. And you don't need to keep him on full time basis.

Posting the link publicly here is not a very good idea in my opinion, all this can be discussed in private messages if there is interest.

 

[GraemeL]

Does any of you guys know how to help me. Where do you suggest I should start?

That was your request. Several have tried to guide you where to start but you reject their views? My suggestion is to listen.

 

[WizMac]

That was your request. Several have tried to guide you where to start but you reject their views? My suggestion is to listen.

Don't worry, I heard the advice perfectly. I was asked for business details - I answered.
Your message seems inappropriate.

 

[japancool]

Selling what, physical items, digital content?

 

[WizMac]

Selling what, physical items, digital content?

'm selling my own e-commerce software/script, there is a customers base, and it has good potential for growth.

 

[pentel]

No, I think it's a good price and the marketplaces have confirmed it.

The market confirms how much a business is worth once the deal has gone through.

 

[Socio South West]

No, I think it's a good price and the marketplaces have confirmed it.

OK.... you think its a good price... You have to find someone else who agrees with that opinion.

Using a lot of 'about' 'approx' and round figures is not going to give anyone prepared to invest that sort of sum any confidence.

Get some decent audited figures prepared that will stand up to scrutiny and you will stand a better chance: As others have said, as you are presenting this to the forum here it looks completely dodgy.

 

[Lisa Thomas]

I can recommend an agent who can help sell your business. feel free to dm me.

 

[Ozzy]

Does any of you guys know how to help me. Where do you suggest I should start?

If the business is not selling at the price you are asking then as has already been said above, the business is not worth what you are trying to sell it for.
In short, it makes absolutely not difference what a business owner thinks their business is worth if no one is buying.

I could say my business is worth £100M but if no one is giving me £100M than it isn't really.

You need to find a true value for your business, and I'd suggest speaking to your accountant who can look at your financial performance of the business, the stickiness of customers, recurring revenue stream, all these things that could add a multiplier. If you have no recurring revenue, or established trade history going back a few years, then you might just get net profit for 12 months and nothing more.

 

[Paul Kelly ICHYB]

I'm just not an accountant

Most of us are not, but you should know the basic figures. If not, your accountant should provide them!

 

[Mark T Jones]

If the business is not selling at the price you are asking then as has already been said above, the business is not worth what you are trying to sell it for.

Or it's being badly marketing (or any combination)

You can add a bit of value with decent marketing.

If the business is generating a 'true', consistent net profit of £40K, then £70K should be a walk in the park.

The fact that the OP can't or won't give any meaningful information will put off even the most gullible buyer.

 

[WizMac]

I repeat, detailed information with more precise figures will be provided to all potential buyers. This is not a problem.

 

[fisicx]

I repeat, detailed information with more precise figures will be provided to all potential buyers. This is not a problem.

But you need to first convince them it's a worthwhile investment. Because the numbers don't really stack up you are unlikely to get many (if any) inquiries.

I sent you a DM asking for details but you didn't respond.

 

[Clinton]

Month December 2023 January 2024 February 2024 etc

Sales $2,503.75

Profit $1809.32

Okay, I'm interested in buying. @WizMac, Send me a table in the above format with figures from the last 12 months.

 

[WizMac]

I sent you a DM asking for details but you didn't respond.

I didn't receive any DM from you

Okay, I'm interested in buying. @WizMac, Send me a table in the above format with figures from the last 12 months.

Sent it

 

[fisicx]

I didn't receive any DM from you

Can you please send me the details.

 

[Clinton]

Sent it

Okay, I'll give you credit for taking the trouble to put some figures together.

Finally!

Here are the averages if anyone else asks you (and based on what you sent me):

Total 12 month sales = $38,264, Average = $3,188.67 pm
Total 12 month expense = $2,219.33. Average = $184.94 pm
Total 12 month SDE (not profit) = $36,044.67 Average = $3,003.72 pm

Was that so difficult?! Why didn't you just provide it earlier?

I don't believe your expenses were just $184.94 pm. A buyer won't believe it either. You need to put data together to convince him.

You also need to factor in a salary / cost for the time you spent (as a buyer of the business won't have your free labour and he'll have to employ someone and pay them to replace you). Deduct that and you're getting closer to net profit.

Given some of the jobs you did were customisations, you'll have to extract those, show how much was paid on those jobs and how much of time was spent on them.

It sounds like a tough sell.

Even if you find a buyer who has your skills, and he has the money and interest in buying this, he ain't going to pay you 30 months worth of gross profit ($90K)! Not even 24 months ($70K)

The valuation you got was bullsh*t. If Flippa gave it to you, they gave you an artificially high valuation in order to con you into paying to list with them.

Let that be a lesson to you. If someone has an incentive to give you a higher valuation, get the hell away from them!

 

[WizMac]

Okay, I'll give you credit for taking the trouble to put some figures together.

Finally!

First of all, thank you for the detailed description and your calculations, but in some ways you are fundamentally wrong and are making the wrong conclusions.

What am I talking about:

1. I gave you statistics purely on software sales, without taking into profits from customizations (with it, the total income would be ~30% higher)
2. I clearly indicated the expenses, these expenses are related to our payment system, which takes 5.8% from each transaction. The expenses include hosting and advertising (but against the background of the total turnover, these expenses are insignificant)
3. I have a buyer for $50k, but this is ridiculous to sell for that amount

anyway, thank you again for your advice

 

[Clinton]

You found someone willing to pay you $50K?

My recommendation: Sell it to him before he sobers up!

 

[WizMac]

You found someone willing to pay you $50K?

My recommendation: Sell it to him before he sobers up!

I will sell it for no less than $70000. Only this way.

I don't understand your sarcasm.
I don't know what businesses you bought, but judging by the links you provided earlier, the sites have long been inactive and non-working - you are "very knowledgeable" about online projects.
And I think you need to change your communication style a little, without a hyper-inflated ego and learn to listen and hear things to the end.
I don't need your personal "lessons", learn to be a little responsible for your words - you write that you don't buy online projects, then you write that you are interested in buying and want numbers and only in order to once again show yourself smart (not having and not fully understanding all the information). I don't think this paints you and your approach to business, at least I would not want to deal with you for any amount (although I'm lying, for $100,000 I could tolerate you).
Let that be a lesson to you.
Regards.

 

[fisicx]

If you are holding out for £70k there is little more any of us can offer in way of advice.

Good luck with your sale.

 

[Mark T Jones]

I will sell it for no less than $70000. Only this way.

I don't understand your sarcasm.
I don't know what businesses you bought, but judging by the links you provided earlier, the sites have long been inactive and non-working - you are "very knowledgeable" about online projects.
And I think you need to change your communication style a little, without a hyper-inflated ego and learn to listen and hear things to the end.
I don't need your personal "lessons", learn to be a little responsible for your words - you write that you don't buy online projects, then you write that you are interested in buying and want numbers and only in order to once again show yourself smart (not having and not fully understanding all the information). I don't think this paints you and your approach to business, at least I would not want to deal with you for any amount (although I'm lying, for $100,000 I could tolerate you).
Let that be a lesson to you.
Regards.

I think many of us on here are getting tired of the trend for new posters to come looking for advice but giving absolutely no meaningful information. Answering questions in the manner of a suspect under interrogation

It's simple - if you want good advice, you have to give good information

We have absolutely no idea what your business is worth on the information given. If you've been offered 50k, the buyer either has a lot more information than we do, or is an idiot. Or a smart cookie who will end up stealing your business off you - these type of posts are magnets for scammers

 

[pentel]

not having any luck finding buyers

I have a buyer for $50k

Information being drip fed by OP.

As Mark says why not provide ALL of the information to be able to get a considered response from members of this forum.

 

[KeithGreen]

Why are the figures in $ if this a UK business forum?

 

[Clinton]

Why are the figures in $ if this a UK business forum?

That's standard for online businesses, Keith. Everything happens in USD.

I think many of us on here are getting tired of the trend for new posters to come looking for advice but giving absolutely no meaningful information. Answering questions in the manner of a suspect under interrogation

Tell me about it!

I'm finding that the quality of new posters leaves much to be desired.

 

[KeithGreen]

That's standard for online businesses, Keith. Everything happens in USD.

No it isn't. I've sold many UK online businesses, and never valued, priced or dealt in USD.