Selling an Online Business in 2021 - How To Sell Your Online Business or Website FAST!
Hey there, it’s Mike Swigunski here and I’m the founder of global career and best-selling author of Global Career: How to Work Anywhere and Travel Forever.
Today I’m going to talk about buying and selling online businesses, which I have ample experience. Over the past four to five years, I’ve helped broker more than 120 million online businesses, and today I’m going to talk about some of those things that I’ve learned over the years. If you’re interested in getting into space, how can you go ahead and sell a business, or if you’re interested in buying, go ahead and buy a business? I’m going to break this up into two parts, so I’m going to start selling an online business and let’s go ahead and dig right in.
If you’re looking to sell an online business, one of the things you’re probably wondering and is the number one thing how much is my business worth in its current state and number two how can I maximize my valuation for a future exit and starting with that first question how much is your existing business worth right now so if you have your accounting figured out if you have your exact profit margins figured out for the past 12 months this is going to give you the most accurate valuation of how much your business is worth for a simple example let’s say your business is earning ten thousand dollars in monthly net profit this means after all expenses all fees everything that you’re doing essentially anything that a new buyer is going to need to spend money on to run the business.
You need to calculate that and figure out your monthly net profit, figure out the average over the past 12 months and for this sample, let’s go ahead and just use a manageable number like 10 000 a month in net profit. Once you have this number, you can easily calculate it times 40 x. Depending on your business, it will be around 35 to 40 x but let’s go ahead and just use 40. so in this sample, you would go ahead and take that ten thousand dollars to multiply it times forty, and that’s going to give your business valuation a rough estimate of around four hundred thousand dollars, and this is a really easy way to value a business there are so many other factors that go into it what type of business you’re in a sales business with recurring customers every month is going to be valued a lot higher than an e-commerce business that’s only been around for six months a few of the big factors that are going to go into increasing your valuation are going to be the length of business how long has the business been around.
So if the business has been around five years, has all the financial data for that, and has essentially grown year over year, that business is going to be a lot more valuable than a company that’s only been around for six to 12 months doesn’t have that recurring financial data because people want to see trends in your business they want to see that if I’m going to buy this business, it’s been working well it’s been growing for the past five years I can easily take overpay a premium and continue running that business and get my initial investment back you know within 40 months from when I buy the business how do you go ahead and maximize the valuation of your business now there are some creative ways to do this. If you’re interested in learning more, I’m happy to set up a consultation with you to look at your business and help get you to maximize value for your business.
One of the best ways to go about doing this one of the obvious ways is to increase your profit to increase your revenue increase your profit margins. You can easily do this by just increasing the prices of your product or services, and on the flip side, a lot of people focus on making more money. Still, a lot of times, it can be as easy as reducing your cost. Let’s say you’re spending a thousand dollars on something. Maybe some other alternatives can do it for half the price or a little bit cheaper. Perhaps you can outsource some of the stuff you’re utilizing, perhaps outsource or automate essential tasks in your business that will reduce the hours you’re putting into it. They’re going to save you some money and, even better, potentially increase your revenue.
So those are some of the quickest ways to increase your valuation, and if you’re anywhere between three to six months out from wanting to sell your business, I can offer a free seller consultation to figure out how you can essentially earn more money with a potential exit and I’ve helped sellers get more than hundreds of thousands of dollars by a simple 30-minute consultation with myself, so if you’re interested in that I’ll leave some details below but lastly before we wrap up I know a lot of people are wondering why would you ever sell a profitable online business and I just wanted to discuss some of the reasons why people are selling their online businesses and the most common one is they’ve got a few projects going on they’re wanting to shift focus to some other more significant project and they need the capital to invest from one of their businesses to take that money and invest it into another business that’s the number one reason the other reason is some people just get tired of running their business.
They want to get that capital maybe they’re just kind of grown tired of it they’re not really bullish on maintaining that business over a long period of time and they know a new buyer can take it over and continue growing with it and then the last reason is there’s a lot of personal reasons maybe there’s some sort of health procedure they need of family members in need or maybe they just want to turn that money from a digital asset into a tangible asset like real estate they want to sell their digital real estate for physical real estate so there’s a lot of different reasons why you want to sell and again if you’re looking to sell your business i highly recommend thinking about what the reasons are you’re wanting to sell and then again what you’re wanting to do afterwards after you’ve exited that business so that’s something that i can help you out with and also i’ll leave a details below about how you can schedule a free consultation with me to discuss more details about exiting your business and getting the most money possible in an exit.
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