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Is 5 X too much to ask for forums that pull $140k per year?

by pseudonymble
27 replies
I own 5 forums, all in the same niche
2 of which are the big producers @ about $145k per year.

I spend about an hour per week on the at most. Usually less.
They just sit there, neglected and every day, money rolls in
I want to dump them and invest the money in to my other business which is where my passion is.

So my question..
On forums. is 5 X annual revenue a good starting point? Too high? Too low?
#decent #forums #sized
  • Profile picture of the author ronyoung
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  • Profile picture of the author Chris Worner
    Without knowing anything about the market or the people it serves, it is hard to give you any kind of real answer other than it is worth whatever somebody is willing to pay for it/them.

    Ignore anybody that tells you that you should sell it for 10 months worth of income or so. It depends on the market and who you are selling to.

    I can just imagine all the people who spout this nonsense trying to offer Allen Says(or freelancer for that matter) ten months of income to buy warrioforum. I would love to be a fly on the wall to see the response.

    -Chris
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    • Profile picture of the author iAmNameLess
      Originally Posted by Chris Worner View Post

      Without knowing anything about the market or the people it serves, it is hard to give you any kind of real answer other than it is worth whatever somebody is willing to pay for it/them.

      Ignore anybody that tells you that you should sell it for 10 months worth of income or so. It depends on the market and who you are selling to.

      -Chris
      He's wanting 60 months of income.

      Fair enough to say to ignore the comments about 10 months of income but these are two extremes lol.

      You show me someone who pays 5X the annual revenue of a forum and I'll show you a sucker. Total yearly revenue X 1.5-2 is where you will likely land and sometimes not even that.

      If you're unwilling to accept such an offer, it would make sense to keep it. 5 years is a long time for any business, but 5 years for online businesses is insanely risky.
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  • Profile picture of the author Anonymous Affiliate
    It depends on how long for and how consistent that $140k/year has been over time, but at any rate nobody in their right mind will pay 60x monthly profit unless it's a SUPER established site.
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  • Profile picture of the author Clownface
    Doesn't sound like 5x (or even more) is too much to ask imo. You built the forums up; you have a right to charge for that work, money and time invested. But like several others say: Do consider your niche.
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  • Profile picture of the author Alexa Smith
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    Originally Posted by pseudonymble View Post

    Is 5 X too much to ask for forums that pull $140k per year?
    Not if you can get that much for it.

    I would take no notice at all of people suggesting that "10 months' income is right": that's clearly not the case, for a well-established forum with a decent history of proven and independently verifiable income. But I think you'll do very well indeed (and that's putting it mildly) to get anything even close to 5 years' income.


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  • Profile picture of the author bambinoes
    If you even manage to get the 140k, you would be lucky. I would just keep the site, too many bargain hunters.
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  • Profile picture of the author Chaudhary Daniyal
    Originally Posted by pseudonymble View Post

    So my question..
    On forums. is 5 X annual revenue a good starting point? Too high? Too low?
    Ignore the comments regarding the "10 Month Income".
    If you were talking about an authority site, then 5x yearly income would be a bit over the top since the traffic to a site is generated easily when you know what you're doing.

    Forums are alot harder to get going and keep going.
    A forum is as good as the activity of it's members and if you're forums are generating 140K, then you're sitting on a goldmine.

    Lots of people, including some really successful marketers have tried to start a forum and ended up dumping the idea since the initial stages require too much work before the snowball effect kicks in.

    I would definitely leverage that while negotiating and won't settle for anything else since running the forum is easy when you hire a team, getting it off the ground is not.

    Best Of Luck.
    Daniyal
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  • Profile picture of the author owenlee
    It depends who you are selling to.

    If a company feels that they can tap on your forums members and recoup the investment within a short period of time, they might be willing to buy 5x of what you are earning now.
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  • Profile picture of the author eac113
    To me it would depend on growth/decline rate of revenue over the previous 36-48 months, if that was steady 5x would be fair.
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  • Profile picture of the author onSubie
    Warrior Forum sold to Freelancer for 3x annual revenue.
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  • Profile picture of the author Steve B
    Originally Posted by pseudonymble View Post

    I spend about an hour per week on the at most. Usually less. They just sit there, neglected and every day, money rolls in.

    Pseudonymble,

    If what you say about your income is true, I think you're totally crazy for wanting to "dump" your money tree!

    You spend less than an hour a week to generate 145K per year and you want to kill the golden goose? Unbelievable!

    Surely you could sell off your three lesser forums and hire a part time manager to care for and ramp up the two good performers leaving you with nothing to do with your time but collect your paychecks.

    There is no way you're going to start a new venture that you are passionate about and make a better return on your time investment than $145K for less than an hour's worth of work per week.

    You're about to make a huge financial mistake! You're going to exchange this goldmine for 5 months of income that will require less than 20 hours of work on your part . . . and then it's gone forever.

    How short sighted!

    Steve
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    • Profile picture of the author pseudonymble
      Originally Posted by Steve B View Post

      Pseudonymble,

      If what you say about your income is true, I think you're totally crazy for wanting to "dump" your money tree!

      You spend less than an hour a week to generate 145K per year and you want to kill the golden goose? Unbelievable!

      Surely you could sell off your three lesser forums and hire a part time manager to care for and ramp up the two good performers leaving you with nothing to do with your time but collect your paychecks.

      There is no way you're going to start a new venture that you are passionate about and make a better return on your time investment than $145K for less than an hour's worth of work per week.

      You're about to make a huge financial mistake! You're going to exchange this goldmine for 5 months of income that will require less than 20 hours of work on your part . . . and then it's gone forever.

      How short sighted!

      Steve
      5 years. Not 5 months..

      I already own the company that I would be reinvesting the money in to. Not starting a new one.
      The money I would gain from the sale of these sites would help fund the growth of an already successful company.
      I am not interested in hiring someone to do grow the company. I am tired of the niche and want to fuel the business I am passionate about..

      Simple as that..
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      • Profile picture of the author iAmNameLess
        Originally Posted by pseudonymble View Post

        5 years. Not 5 months..

        I already own the company that I would be reinvesting the money in to. Not starting a new one.
        The money I would gain from the sale of these sites would help fund the growth of an already successful company.
        I am not interested in hiring someone to do grow the company. I am tired of the niche and want to fuel the business I am passionate about..

        Simple as that..
        But the point is that you have such little time invested in the forum and it's producing a great return. The same return is unlikely to happen in the reinvestment of your other company.

        If your company is really blowing up, then you should be in a position to not need to invest your own money, there are plenty others that would want to get in on the action without risking your own money.

        Passion is great... problem is, that passion often causes people to make bad financial decisions. You're not going to get 5X annual revenue for the forum. You would be doing well to get 2-3x annual revenue. Would you sell it for that amount?

        Of course... none of us know anything about your other business that is booming... maybe it will be more profitable and have a killer ROI from the sale of the forum.

        You know your situation better than any of us.... I just think 5X annual revenue isn't very realistic. Nothing is impossible, but I personally don't see it happening.
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        • Profile picture of the author pseudonymble
          Originally Posted by iAmNameLess View Post

          But the point is that you have such little time invested in the forum and it's producing a great return. The same return is unlikely to happen in the reinvestment of your other company.

          If your company is really blowing up, then you should be in a position to not need to invest your own money, there are plenty others that would want to get in on the action without risking your own money.

          Passion is great... problem is, that passion often causes people to make bad financial decisions. You're not going to get 5X annual revenue for the forum. You would be doing well to get 2-3x annual revenue. Would you sell it for that amount?

          Of course... none of us know anything about your other business that is booming... maybe it will be more profitable and have a killer ROI from the sale of the forum.

          You know your situation better than any of us.... I just think 5X annual revenue isn't very realistic. Nothing is impossible, but I personally don't see it happening.
          I hear you and understand.
          5 x, I figured was on the high end.
          4 however I think is very doable.
          3.5 should make for a quick sale but then I am getting less than my expectations.

          The deal with the other business is this.
          The company is a real world food manufacturing facility. We are doing well right now, growing and moving forward but in order to go to the next level, we need to drop quite a bit of money on the new build out and the equipment (walk in fridge, walk in oven, vent system, etc.)
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    • Profile picture of the author owenlee
      Originally Posted by Steve B View Post

      Pseudonymble,

      If what you say about your income is true, I think you're totally crazy for wanting to "dump" your money tree!

      You spend less than an hour a week to generate 145K per year and you want to kill the golden goose? Unbelievable!

      Surely you could sell off your three lesser forums and hire a part time manager to care for and ramp up the two good performers leaving you with nothing to do with your time but collect your paychecks.

      There is no way you're going to start a new venture that you are passionate about and make a better return on your time investment than $145K for less than an hour's worth of work per week.

      You're about to make a huge financial mistake! You're going to exchange this goldmine for 5 months of income that will require less than 20 hours of work on your part . . . and then it's gone forever.

      How short sighted!

      Steve
      Hmm...That is also truth.

      Another alternative is to hire some VA to work on it and carry on to make money from it.
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  • Profile picture of the author Raydal
    Can't you look at the stats from sites like Flippa and see
    what is the average going rates for such sales?

    -Ray Edwards
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  • Profile picture of the author skyro
    5x is a fair amount to ask for but I got to ask why would you want to dump the forums which are making you that kind of passive income which you hardly have to spend much time maintaining and it's making you that kind of money?
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  • Profile picture of the author drem
    I think you would be very lucky to receive 5x the income because markets change so frequently, Forums often come and go. I think you can definitely get more than the 10x the month income, but 60x? I doubt it.

    If you're spending just an hour a week on moderating the forum, why sell it? Over 12k per month for doing 4 hours of work is simply amazing.
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  • Profile picture of the author Steve B
    Originally Posted by pseudonymble View Post

    I want to dump them and invest the money in to my other business which is where my passion is.

    If you want money to invest in your other business, why don't you just save up 5 months worth of income which will give you the same amount of investment capital as selling the forums off for 5X monthly revenue? And you'll still have $145K coming in every month after the 5-month savings period because you'll still own this asset (income stream) which is currently paying you $2,788.46 per hour worth of your time ($145,000/52 hrs work in a year).

    Steve
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  • Profile picture of the author nizamkhan
    It's better to get in touch with those who have experience of selling/flipping sites, they can give you much clear suggestion about the price. And also you can go to sites like Flippa and do research about the similar sites, for how much price they have sold out.
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  • Profile picture of the author pseudonymble
    Thanks for the replies guys!!
    10 moths is BS.. even 20..
    I could keep the sites and end up with the same money in that time..
    Same could be said about 60 months, however the lot sum of 60 mo. vs 10 is well worth considering.

    The sites have been at $140k for about 3 years now.. I am confident I could pull $175k out of them if I gave hem a little bit of attention but my other company is both blowing up, and, in need of funds.
    niche is car audio, btw..
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  • Profile picture of the author Thomas Smale
    A lot of nonsense advice in this thread as usual. If you don't know what you are talking about, you shouldn't be giving financial advice on a forum. What if the OP listened to some of the advice and sold for thousands less than the site(s) were worth?

    @ OP - generally very established forums sell at around 3-4x annual SDE (or net profit for simplicity) assuming they are in evergreen niches and growing steadily. In my experience (over $10m in sales this year), 5x is on the high side and is almost unheard of. It's certainly not impossible, but I would say it's a 1% chance and you would need to get lucky finding a strategic buyer.

    From the information you have supplied, I suspect 3x will be nearer a "realistic" sales price for these. 3 years of history isn't that much, especially if you're looking for a premium multiple.
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  • Profile picture of the author TakenAction
    I mean really it is worth what someone is willing to pay for it.

    Just above ^ you said x4 annual rev is doable and x3.5 should be an easy sell....your too funny.

    See you say that x3.5 is a quick sell well that's all talk.

    I am sure once you actually start to find a buyer you will finally realize that your expectations are way off.

    I could MAYBE see you getting x1.7 for it

    best of luck.
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  • Profile picture of the author x3xsolxdierx3x
    1 hour a week upkeep + 145K?

    I can't even begin to wrap my head around this thread.

    As mentioned in the thread already, there are other courses of action here that seem way more feasible.
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  • Profile picture of the author seoboyz01
    You're earning really well on your forums for almost no work. Why not just take the income you are getting from them now and reinvest that into a business, rather than selling them and risking it all on untested opportunities. At least what you have now is working. Also, as for the price you are asking, I'm not sure anyone would pay that, regardless of what you are earning as they can't be assured they would earn that much money at it. Success usually lies with the individual, not the site.
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