How to sell my online business?

Question

Hi, I developed an online business, which launched 18 months ago. The business earned raffly 50,000 bucks over that time. At first place I paid for online marketing like AdWords, but I stopped that. Still, the online service is getting new clients, who pay $20 for a 6 months period of service. The majority of the clients is happy to prolong their membership. The operation costs reduce to the server hosting only which is ca $150 monthly. Now my question: I would like to sell the entire business including all source code and client contracts to a new owner. But I have no idea, what the reasonable purchase price could be and how to find a responsible and serious new owner for the business. Can you help?

Regards, Uwe

The $50,000 income is the gross turn over from day one to date. All costs are excluded. I spent a lot of money and time in actually developing, launching and advertising this project. The growth of the business heavily depends on the ability to attract more paying customers by smart advertising. The business deals directly with ebay auctions. So, any ebay user is a potential client of this service. After all investments that I made, the new owner will find a clean system, which he needs to grow as a marketing / sales person. Despite that, the buyer receives a stock of ca 1,000 customers who will make future payments all 6 months. My reason for the sale is the fact that I need to change my personal and business life. Hence I need a larger amount of money today, even if I can't earn the fruits of my work in the future, which is only natural. It has nothing to do with my expectations in this particular business. I'd rather predict a nice future for it.

I was already thinking about selling to competitors, however I'm stuck with the purchase price I could suggest. I think, there are two components with the estimate - one is the stock of existing clients where some paid already $80 (4 periods a $20 in advance). This client base should have a specific value within the purchase price, I believe. The second component should be a revenue estimate that some skilled personcould achieve, when managing a working system. If I sold to a competitor, the system itself would have less value to him, since he already owns a system that looks exactly like this. So, I'm not sure, if the best value can be achieved with a person who can make money based on a flying project - by actually going out and getting more clients.

Answer 1

For now, there are more questions than answers. You say, "the business earned roughly $50,000". Is it revenue, operating income, or net income? Also, you say the operating costs only include hosting, which means that the new owner will either have to work in the business himself or hire someone and see their earnings reduced. Finally, what sort of growth for this business do you see in the future?

You need to prepare a comprehensive information package about your business, including detailed descriptive information and financial statements. You also need to clearly state your reasons for sale, otherwise people may think that you are selling the business because you expect it to fail soon.

The most likely buyers for your business are your competitors; they understand the industry and will probably give you the best price. There is a possibility that a large company is seeking to enter your industry, so they would jump on the opportunity to have an established operation, however small. In both cases, the buyer will probably value the acquisition based primarily on its growth potential.

Answer 2

The best way to sell online business is to drive online traffic from search engines.

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