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What’s the best way to sell a very profitable online business?

RadicalShift

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Jul 26, 2019
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Have an online biz that has doubled in growth for the last three years and is on target to generate 6mm this year.

Looking to sell and get out of the business (for a number of reasons) and I’m looking for ideas/suggestions from anyone here who has sold a company (or companies) in the past.

We’re an online coaching business in the Real Estate space with brand awareness as well as tons of social proof.

Any ideas and/or advice would be greatly appreciated.

P.S. Anyone here ever sell (or know of anyone who has sold) through Empire Flippers?
 

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amp0193

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SD Entrepreneur

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Have an online biz that has doubled in growth for the last three years and is on target to generate 6mm this year.

Looking to sell and get out of the business (for a number of reasons) and I’m looking for ideas/suggestions from anyone here who has sold a company (or companies) in the past.

We’re an online coaching business in the Real Estate space with brand awareness as well as tons of social proof.

Any ideas and/or advice would be greatly appreciated.

P.S. Anyone here ever sell (or know of anyone who has sold) through Empire Flippers?
Congrats on the achievement/growth and good luck with the sale!
 

empireflippers

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Hey OP - Justin w/ Empire Flippers here.

We regularly sell websites and online businesses from as low as $20K in to the low-mid 7-figures.

If you're $6M in sales per year is top-line with smaller margins I think this could fit in well with what we've done. If you're at $6M/year EBITDA this would be larger than businesses we've handled in the past, to be fair.

Either way, I'd suggest giving Quiet Light Brokerage a call as well. They run a quality business and are honest/trustworthy brokers.

Our fees range from 15% for smaller businesses down to 8% for businesses valued/listed at $5M+.

You can setup a call with our team here and we'll have you walk us through the business and numbers to see if there's a good fit or not as well.

Congratulations and best of luck with your business and the potential sale!
 

JScott

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How heavily are you personally branded in the business?

For real estate, many coaching businesses succeed based on the personal branding of the founder, and without that person's involvement, the value of the brand diminishes considerably. I'm a perfect example of that -- I could likely start a 7- or 8-figure real estate coaching/training business based on my brand, but I don't think I'd be able to sell it for anywhere near that valuation, as without me to back the brand, the business isn't worth much (hence why I haven't done it).

The other question I would have is around margins -- is the $6M top line or bottom line? If top line, what are the operating margins? How would the top and bottom lines be impacted if someone else took over the business? This will give you an idea of the independent value of the business, which will ultimately drive how you want to market/sell it.
 

Valor

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Does anyone care to share what multiples they received for their Ecom businesses?

I've seen the 30X monthly profit often used as a standard, but I'm curious how much that varies from one broker to another for similar sized businesses.

I've read "Before The Exit: Thought Experiments For Entrepreneurs" (highly recommended by @amp0193 in his thread), and even before reading this, I thought 30X just doesn't seem like a high enough multiple anymore.
 

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amp0193

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Does anyone care to share what multiples they received for their Ecom businesses?

I've seen the 30X monthly profit often used as a standard, but I'm curious how much that varies from one broker to another for similar sized businesses.
I haven't heard of a monthly profit multiple being used at all.

2x-3x for ecommerce business is what I think is the "normal" range.

The more variety of income channels, the higher the multiple will be.


My business sold for ~2x TTM profit. It would've been higher, except many buyers were wary of potential liability with the products, so I had to take what I could get. The business revenue was 80% amazon, 10% website, and 10%wholesale to retail stores.
 
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biophase

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Does anyone care to share what multiples they received for their Ecom businesses?

I've seen the 30X monthly profit often used as a standard, but I'm curious how much that varies from one broker to another for similar sized businesses.

I've read "Before The Exit: Thought Experiments For Entrepreneurs" (highly recommended by @amp0193 in his thread), and even before reading this, I thought 30X just doesn't seem like a high enough multiple anymore.
Mine sold for 3x in years, which is 36x months. It sold at that because it was growing.

Meaning that when I listed it, I was asking for 3x annual earnings. But it took 10 months to sell. By the time month 8 rolled around, business was increasing by 20%.

So my asking price (which I didn't adjust up) was really 2.5-2.7x at the time of closing. I didn't calculate it as I didn't care. But I'm sure the buyer took that into account.
 

Monkeycom

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Aug 20, 2019
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Have an online biz that has doubled in growth for the last three years and is on target to generate 6mm this year.

Looking to sell and get out of the business (for a number of reasons) and I’m looking for ideas/suggestions from anyone here who has sold a company (or companies) in the past.

We’re an online coaching business in the Real Estate space with brand awareness as well as tons of social proof.

Any ideas and/or advice would be greatly appreciated.

P.S. Anyone here ever sell (or know of anyone who has sold) through Empire Flippers?
EF have a facebook group, full of value. You'll have direct access to the buyers there.
Also, look at FEInternational, and DigitalAcquisition.
 
OP
OP
RadicalShift

RadicalShift

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Jul 26, 2019
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I second Quietlight. Used them to sell my business. Went very smoothly. Also had lowest commission of the several I talked to at 10%.

Nice little write up: Who are some of the best website brokers? - Quora
Thanks man. Yeah, we were really impressed after several conversations with them and will be making a final decision soon...but I'm thinking it will most likely be QL. Thanks for the article, really good.
 
OP
OP
RadicalShift

RadicalShift

New Contributor
Jul 26, 2019
10
10
14
Hey OP - Justin w/ Empire Flippers here.

We regularly sell websites and online businesses from as low as $20K in to the low-mid 7-figures.

If you're $6M in sales per year is top-line with smaller margins I think this could fit in well with what we've done. If you're at $6M/year EBITDA this would be larger than businesses we've handled in the past, to be fair.

Either way, I'd suggest giving Quiet Light Brokerage a call as well. They run a quality business and are honest/trustworthy brokers.

Our fees range from 15% for smaller businesses down to 8% for businesses valued/listed at $5M+.

You can setup a call with our team here and we'll have you walk us through the business and numbers to see if there's a good fit or not as well.

Congratulations and best of luck with your business and the potential sale!
Thank you so much for the info, and transparency, Justin. Due to the nature of our business, it's not a cut and dry situation when it comes to an easy sale. There are definitely some obstacles for a potential new owner to overcome...but it's very doable. Besides that, there's a TON of growth opportunity with the business. Our margins are also quite high and we run with fairly low expenses, which makes it quite appealing for any savvy business buyer.
 
OP
OP
RadicalShift

RadicalShift

New Contributor
Jul 26, 2019
10
10
14
How heavily are you personally branded in the business?

For real estate, many coaching businesses succeed based on the personal branding of the founder, and without that person's involvement, the value of the brand diminishes considerably. I'm a perfect example of that -- I could likely start a 7- or 8-figure real estate coaching/training business based on my brand, but I don't think I'd be able to sell it for anywhere near that valuation, as without me to back the brand, the business isn't worth much (hence why I haven't done it).

The other question I would have is around margins -- is the $6M top line or bottom line? If top line, what are the operating margins? How would the top and bottom lines be impacted if someone else took over the business? This will give you an idea of the independent value of the business, which will ultimately drive how you want to market/sell it.
You raise some very good (and relevant) points. While I totally agree with you from a branding perspective, there are many ways to overcome such challenges. Just one off the top of my head is a rev share, which is advantageous for both buyer AND seller.

6M is top line and operating margins are quite high (40%+). There is a ton of opportunity for growth... that hasn't been leveraged.
 

csalvato

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Also check out FE International.

 

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