So, I Got An Offer to Sell My Business... (I'm 25 Years Old)

[Rabby]

I have a friend who sold their affiliate based website for 30x monthly profit. Would imagine you could find a buyer in that same range.

That's in line with the 2-4x annual mentioned by CareCPA.

 

[Jon L]

Did that factor in growth? Was it average monthly income, or most recent monthly income?

how much of the growth are you responsible for in your company? (If the answer is 'most of it,' then growth can't really be factored into the selling price like it would be if you had a company that was growing on its own without much involvement from you.)

 

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[Rabby]

A sale of a business is generally ascribed as a long-term capital gain. So the rate can be 0% up to 20% (with some rare exception where the rate is 28%)

I'm not completely sure, check with a CPA, etc first. But there may be chances of avoiding taxes at all if you have a holding company which owns the business you will be selling and invest that money in new business.

Back in 2012-2016, I knew a guy who bought/sold businesses. He mentioned that due to long-term capital gains there were 0% taxes. I don't know how he structured his companies and I don't know if anything has changed since then. Just mentioning it as a possibility that a professional would know more about.

The tightened up some of the like-kind exchange features of the revenue code in the US in 2018 I believe. Maybe he was using part of that. You can still defer gains via structured sale or financing, and thereby prevent maxing out the capital gains rate.

 

[Ronak]

Anything that grows that fast can tank just as fast. Ask me how I know.

I like the idea of taking some chips off the table and investing in other cash flow assets, especially now that valuations will likely come down due to the downturn for businesses that manage to survive. Also, theres probably nothing preventing you from doing it all over again after you sell, right?

 

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[lludwig]

Let me add your average revenue per visitor is around $0.07. Really low IMHO even for your niche and I think it's under-monetized. At that rate you could almost put up ad banners to make the same or more money.

 

[Entre Eyes]

First of all congrats.....Age 25 or not you fall into the Entrepreneur Vets category.

But you really need to be addressing Website Brokers. Start out with their valuations.

Also take a peek at the recently sold pages.

If you get a chance visit Jay Abrahams site he will show you all types of ways to see value in a business that is not so obvious at first.

I would say you are where alot of people want to be right now.

 

[shewperman]

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[Knugs]

Hey, all. I just got an offer from someone to buy my business.

I've had people interested in it before, but the deals didn't pan out.

In a nutshell, I'm wondering how to valuate my business. I've seen all kinds of different formulas, and have no clue which to use.

Here's some quick stats:

• Industry Stats
  • Affiliate Advertising Industry
  • Health/Fitness & Self-Help (Dating, Making Money, etc.)
  • Website Niche is Very Versatile, So Can Be Monetized w/ Almost Anything
  • Growing Industry (All Online)
• Website Metrics
  • 120,000 New Users/Month
  • 2018 to 2019 Unique Users Growth: +693%
  • 2019 Q4 to 2020 Q1 Unique Users Growth: +198%
• Income Metrics
  • Earned ~$111,000 in 2019
  • 2018 to 2019 Net Revenue Growth: +61%
  • 2019 March to 2020 March Net Revenue Growth: +157%
  • 2019 Q4 to 2020 Q1 Net Revenue Growth: +47.7%
• Operating Costs Metrics
  • 2019 Baseline Operating Costs: $1,100/month
  • 2018 to 2019 Operating Costs Growth: +5%

Obviously this is a very prime business for someone to buy, because of the extremely rapid growth rate and low overhead.

I've seen estimates anywhere from $500,000 to over $18,000,000 depending on the calculators I use, lol. So, I'd appreciate some help.

My business is growing extremely rapidly, so unless I get a really good offer, I probably won't sell. That being said, a good offer of $1,000,000+ could give me a ton of nest egg money to start a new business venture, and this time, I'd be starting one with all the experience I have, so it would end up growing 10x faster than my current business did.

This is a very key moment in my career, especially because I'm only 25 years old, so this decision could have a very long-lasting impact. Hence, why I'm here - to see if I can gleam some advice from entrepreneurs who have not only talked the talk, but walked the walk.

Any help from the veteran entrepreneurs here would be much appreciated! Thanks, guys

Just out of curiorisity: what was the offer you received, and how did this end up?

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nice first comment.