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Should I sell and for how much?

I have a 2 year old ecommerce business and am thinking about selling it. First, the domain name is premium, currently a PR5. We had 35k in sales last year and 30k so far this year, traffic has more than doubled as well as sales. 500% growth month to month. Our profit margin has increased 20% from the previous year.

The business requires 1 hour of work per week, if that and I am serious! Given the growth potential, revenue, increased market share, and domain I would not sell for anything less than 200k. Is this figure achievable or should I hold on and continue to let it grow.

Ohh the reason I am selling is I am looking to pursue a new business.

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Answers (9)
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Blackburn & Fears Inc
Principal
FL

To one of the previous authors point - what is the net? from there 1-3x net would be reasonable. 200K is very high even if the $35K were pure profit.

Good Luck,

Cy

Jun 1, 2012
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Ryan,

Maybe you can help ME....Opened a webstore in December and traffic/sales are slow. How did you get so much traffic so fast? Is it your products? Tons of money into marketing? I've contacted marketers/SEO folks to help and they all are a fortune. At a minimum 1K a month...which I can't afford since I have no sales! I've done the Facebook page and advertising thing, brings little traffic but nothing to speak of and no sales. Of course I am limited on how much I can spend there also. I do email marketing...and I am constantly asking folks to spread the word. I'm now very low on cash and can't afford these SEO guys or to even keep this running. I'm not found on search engines. At least I can't find me.

Any tips you can share? And what's a PR5? that will show you how much I know about marketing a website!

Thank you!

May 31, 2012
Buy-a- Company

Ryan,

Don has given you decent advice. $200k for a business that did just $35k in sales last year would be unreasonable, were this a typical company. In order for you to get that kind of multiple, the buyer would need to see tremendous opportunity for growth, and the product would need to be stellar, hard to duplicate, etc.

Without disclosing the product or web site, can you give us a hint as to what type of product/site it is? What is the NET profit? (Sales are nearly irrelevant...it's the NET that pays the bills).

If it is truly as good as you say, I would recommend growing it a few more years. Not only will it be easier to sell, but your multiple will grow. For every dollar of profit you make in the next 2 years, you may add $3-4 more dollars in equity. It makes sense.

But if you just want to sell it, then sell it. Don't hold out for a price that may be unrealistic. Put your time and effort into the next venture, and let someone else try to make this one work.

Remember, I cannot say if your price is too high or too low without a lot more information, so take this as it was intended, not concrete advice.

Share as much as you can, and we'll try to help.

May 9, 2012
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Williamson County, TN

Ryan,
If you are still interested in selling we can chat and I would like to get a little bit more info from you at which time we can take it from their. You can write me at david@alliantbroker.com and we can start the discussions.

Thanks

Dave

May 8, 2012
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m_ash@aol.com

May 8, 2012
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I would love to talk to you about franchising possibly. Please email me back

May 8, 2012
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The BAF Group LLC
MD

I thought it sounded familiar...! But I talk to so many people, I think I know everyone, anyway. Call me, Ryan. Let's walk through it.

Apr 26, 2012
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Don,

I appreciate it. You told me that the same time last year. I guess my point is if I can sell now for 200k i would, its worth it to me to take thee 200k now rather than wait another 18 months. Why? Because I have a solid idea I want to implement and am bored with the business.

Apr 26, 2012
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The BAF Group LLC
MD

Ryan, you are far, far better off waiting until you can generate three (3) full years of Tax Returns, before attempting to sell. There are several reasons for this, but the most important of these is that the vast majority of lenders - and sophisticated Buyers - prefer three (3) years of history, and with a service business that possesses no tangible assets to use as security for the loan, it is almost imperative. That being said, $200k is almost chump change to some prospective Buyers, and they won't need a lender. Whether that price is workable or not, is not something I can answer without seeing Financial Statements and learning more. But the shorter the amount of time in operation, the more the lender and Buyers are going to try to discount any price.

But if you are only working one (1) hour per week, with 500% growth month-to-month, what possible new business could be better than the future you paint for your current endeavor?!!? If you are going to print money...maybe? (That was a joke - don't get irritated!) Think hard about holding on, and call if you want to discuss this. Don Barrick (410) 715-0700.

Apr 26, 2012

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