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If your Im Biz Made You $34332 last year how much would you sell it for?

by temlawn
29 replies
Hello Warriors,
So here is the deal. I've been doing this along time. A couple months ago a fortune 100 co. made me an offer I couldn't refuse, but im going to be on the road for 10 months starting in about 10 days which is going to extremely limit my time to my IM Biz. My Biz consists of 270+ sites and made me over $50K for 2010 and I just got my paypal tax doc. which shows $34,332 for 2011 -

My question is this?

I might be forced to sell the whole thing due to lack of time with the new co. im traveling with so how much should I ask for it?

How much would you ask for it? Im not really sure what biz's of this caliber sell for in todays' market.

Any info would be appreciated. Thx.
#biz #made #sell #year
  • Profile picture of the author Brandon Tanner
    There's a lot of factors involved, obviously, but the general rule of thumb is that you can (usually) sell a site for more/less the amount of profit that it's pulled in for you over the past year. So if that 34K is profit, then you can very likely get about that for it. Check out Flippa.com.
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  • Profile picture of the author Fraser SellHealth
    12-20 months of earnings

    so 34k - 50k , but most likely what it has made in the last year, would be a fair selling price.
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  • Profile picture of the author temlawn
    @Brandon - Thank You.
    @Fraser - Thank you.

    I see sites on flippa selling for big bucks, but then relisted again and again, so im not really sure of the validity of them thats why I was kind of asking the "Pro" community of the warrior forum.
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  • Profile picture of the author davejug1
    Sites that sell again and again may well be pre-prepared turnkey sites.

    A few things do affect the value, you can increase if by having a good domain name, PR (not sure why in this day and age), including a subscriber list, aged domain etc.

    It can be negatively affected too is if you are wringing the hell out of it. If it's got room to monetize, marketers will take this into account.
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  • Profile picture of the author temlawn
    @davejug1 - Thanks
    @young - Thanks

    I've heard a few different ways to evaluate it around the net. Some people say take the montly profit and X's it by a certain figure while others will say take the yearly profit and X's it. Does anybody have a equation for figuring it out. Would a monthly X's or a yearly X's be better. My personal thoughts is its only worth what somebody will pay for it to be honest.
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  • Profile picture of the author davejug1
    That's exactly it, you can try to value it as much as you like but at the end of the day, an asset's value is only what someone else is willing to pay for it.
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  • Profile picture of the author temlawn
    Ok so let me ask you guys this.. do you think it would be smarter to just sell off the sites maybe 1 by 1 or in chunks of 5 or 10 as a package or the whole thing as a group. They all kind of complement each other, but it would definitely take the right buyer who is a little savvy to handle 270+ sites. I dont want to overwhelm a new owner, but then again there are some time constraints also that have to be considered.
    Kid of reminds me of the movie "Pretty woman" where "Richard Gere" buys the biz's and then sells them off in smaller chunks ..lol.
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  • Profile picture of the author Thomas Smale
    How much time do you spend on the business? Proper buyers will take into account the time required to run the site, so in reality, your actual "profit" will be lower than the numbers you are stating (unless you're taking a salary and that's the money left over).

    Also depends how easy it is to outsource. If it's quite specialised and hard to outsource then you'd expect a lower multiple.
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  • Profile picture of the author xXLewisXx
    I'd sell it for $28,500 decent amount of money for you, and that way it won't be for sale for a year either. It leaves a bit of space for someone to make their some money back in the first year.
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  • Profile picture of the author ryanmilligan
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    I would charge 16 months of the average profit. For example:

    The business made $2000 a month on average. Then I would charge $32,000 for it.

    There are other factors though, the potential of the business, traffic, if you are willing to help the buyer out whenever you can etc.
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    • Profile picture of the author Thomas Smale
      Originally Posted by ryanmilligan View Post

      I would charge 16 months of the average profit. For example:

      The business made $2000 a month on average. Then I would charge $32,000 for it.

      There are other factors though, the potential of the business, traffic, if you are willing to help the buyer out whenever you can etc.
      Where did you get 16 months of profit from? That's a bit of a random multiple.

      There's no standard multiple you can apply, it totally depends on the business. The "potential" does not affect multiple, though.
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  • Profile picture of the author BillyParadise
    Agreed with Thomas Smale - the amount of time you must spend (ie, you can't outsource) factors directly into the value of the business. I for one wouldn't pay a cent for that business if it required me to be running it 40 hours a week - I can go get a job thanks. Now, if I could outsource it for $500 a month to a point where I needed to check up once a week, then it would have value.
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  • Profile picture of the author temlawn
    Ok thanks guys... so would you go for a private sale or would you guys just list it on a site like flippa on a private sale and see what kind of offers come in?

    Your thoughts?

    What about a broker? Anybody have any experiences with Brokers? I've been approached before by them, but really wasn't in the mindset to sell at that time.

    "Ironically after I just posted the above I just saw your sig. Thomas "
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    • Profile picture of the author Thomas Smale
      Originally Posted by temlawn View Post

      Ok thanks guys... so would you go for a private sale or would you guys just list it on a site like flippa on a private sale and see what kind of offers come in?

      Your thoughts?

      What about a broker? Anybody have any experiences with Brokers? I've been approached before by them, but really wasn't in the mindset to sell at that time.

      "Ironically after I just posted the above I just saw your sig. Thomas "
      Flippa is probably your best bet (especially if you're looking for a quick sale) or a broker.

      You'll probably find this site is a little small for a broker (depending on the exact numbers) but no harm in speaking to a few. I know that there aren't many of us who take sites in the $50k range, but if you have a nice setup and it's easy to run then it's worth asking. Brokers will also be a lot more straight up with you - you'll not get all the misinformation that you often get on forums. The other thing to remember with a broker is we're only paid on completion, so it's in our best interests to be honest. No-one wants to spend 3 months working on a site with an unrealistic price tag
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  • Profile picture of the author PSM
    I just sold all my sites on Flippa and I was asking about 10 - 12 months income for them and sold every one for the full price apart from one. If you sell them as a huge package you only attract super serious buyers and the only big time buyer who contacted me offered me half of what the site was worth/eventually sold for... so if I had 270 sites I would sell off all the big earners separately, then bundle the ones that don't earn much together into packages to sell.

    However it only costs $19 to list all 270 in one auction and see the interest it generates, might be worth a punt if it means you don't have the hassle of trying to cut them up and sell them in bits and bobs.
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  • Profile picture of the author temlawn
    Would it be fair to say that the time to run it would be completely up to the owner. I really enjoy IM, building sites, promoting...ect. So for me its just fun. I dont really consider it work or even consider my time to run the biz. Its just fun for me. Some days I can sit here all day and mess around with sites, and sometimes I dont even want to turn the comp. On.

    But it would really depend on the owner. There have been days when I sit for hours (by choice) and there are days when I check emails for 10 minutes and process orders and shut the thing off.. maybe im nuts but there is an old saying "If you enjoy what your doing you will never work a day in your life" -
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    • Profile picture of the author Thomas Smale
      Originally Posted by temlawn View Post

      Would it be fair to say that the time to run it would be completely up to the owner. I really enjoy IM, building sites, promoting...ect. So for me its just fun. I dont really consider it work or even consider my time to be honest. Some days I can sit here all day and mess around with sites, and sometimes I dont even want to turn the comp. On.

      But it would really depend on the owner. There have been days when I sit for hours (by choice) and there are days when I check emails for 10 minutes and process orders and shut the thing off.. maybe im nuts but there is an old saying "If you enjoy what your doing you will never work a day in your life" -
      You'd need to be a bit more specific and break down the actual tasks. Obviously a lot of the hard work has been done (setting them up in the first place!), but there's always work to maintain a portfolio of that size.

      What I do (as a broker) is take your estimate of time spent (let's say 10 hours a week) and multiply that by a realistic cost of oursourcing those tasks (let's say $10 an hour). So at 10 hours a week of owner time, I'd add $400 a month to the costs to give a better indication of actual profit.

      If you have time and think a lot of it can be outsourced - it might be a good idea to do this before you sell. Hiring a VA can be a good start - they are usually cost effective and can do a lot of the boring work that takes up time.
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  • Profile picture of the author temlawn
    @PSM - Thanks and thats kind of exactly what I was thinking.. so thanks!!
    @Thomas - Thanks again... great info! Much appreciated.
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  • Profile picture of the author Ron Douglas
    Revenue means nothing. It's all about profit and cash flow. Unless you have an amazing idea that someone sees potential in, a business will go for 2 to 4 times yearly cash flow depending on how much work is involved with maintaining profits.
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  • Profile picture of the author temlawn
    Revenue means nothing. It's all about profit and cash flow.
    Revenue is cash flow is it not?

    and @Thomas again thanks.. never considered that..
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  • Profile picture of the author temlawn
    @Thomas thinking about what you were saying.. then It might just be smarter to sell off the main ones seperately, then the other smaller ones in groups of 5 or 10 like PSM said above. It would be pretty easy for me to train an individual owner on individual sites, rather than 1 owner on hundreds id assume.
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    • Profile picture of the author Thomas Smale
      Originally Posted by temlawn View Post

      @Thomas thinking about what you were saying.. then It might just be smarter to sell off the main ones seperately, then the other smaller ones in groups of 5 or 10 like PSM said above. It would be pretty easy for me to train an individual owner on individual sites, rather than 1 owner on hundreds id assume.
      Depends on your time constraints. To be honest, my preference would be sell them all as a bundle. It's MUCH easier to train 1 person to manage 100 sites than 100 people to manage 1 site each. You might get less money this way, but I can guarantee you'll save yourself a bunch of headaches with a clean break.
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  • Profile picture of the author temlawn
    @cashtree - yes sir, and hosting is around $3600 a year , but those numbers were taken already out of the number I gave above and other factors were not considered in those numbers such as clickbank profits ..ect.. I was kind of just trying to get a general idea on what it might be worth. Thx.
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  • Profile picture of the author temlawn
    I appreciate everybodies comments and insights. You are giving us a much clearer idea on what we should do. Thank You! Thank You!
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  • Profile picture of the author temlawn
    Id bet your right on that also... ok, re-thinking our strategy again. I agree - so 5 main sites - 10 blocks of say 25 sites.. , yes you are right.... would still have to deal with 15-17 buyers.. Yup your right... 1 single listing, 1 person/ co. sounds much easier.
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