Selling an online business... how?

motion · 11-01-2007, 05:47 PM

I am familiar with bizbuysell.com and have heard good things. If any of you have been through the process, would you recommend just listing with bizbuysell or also going with a broker? Any broker recommendations? Are they worth the commission?

RickM · RickM's Garage

IIRC, some of the domain purveyors offer sites with established business for sale. I'm not sure whether or not you had to secure the domain through there own service though.

Ebay is a viable venue.

Craigsglist...however, it may be too localized for effectiveness.

You'd reach a sophisticated audience with an ad in the WSJ.

pwd72s · 06:50 PM

Other than the domain name...isn't an online biz simply "blue sky"? NOT trying to be nasty here...really. But when it comes to online? Why not just do your own startup? I mean, it worked for Wayne.

(edit) But hey, what do I know? I've never had an F-car, and a girlfriend with one of the cutest poopers I've ever seen on "real" pics posted here...

So you tell me...was it worth it? Your ride through life so far??? I just hope you're enjoying the ride. It's never been a dress rehearsal.

RickM · RickM's Garage

Quote:

Originally Posted by pwd72s

Other than the domain name...isn't an online biz simply "blue sky"? NOT trying to be nasty here...really. But when it comes to online? Why not just do your own startup? I mean, it worked for Wayne.

(

Do you think Wayne has an asset here worth more than "blue sky"?

pwd72s · 11-01-2007, 08:03 PM

Quote:

Originally Posted by RickM

Do you think Wayne has an asset here worth more than "blue sky"?

In cyberspace you mean? THE most popular P-guy website on the web? Yep, it's worth something, no doubt. But how much??? That's "blue sky"...

RickM · RickM's Garage

Quote:

Originally Posted by pwd72s

In cyberspace you mean? THE most popular P-guy website on the web? Yep, it's worth something, no doubt. But how much??? That's "blue sky"...

Gotcha.

I guess with commerce or community sites it's all about raw traffic, return traffic, captive audience and the other the standard particulars that define the worth of a business (revenue and profit margin come to mind).

It's kind of like having real estate and what the address is worth. However, it's probably no more defined than the Wild West at this point.

motion · 11-01-2007, 08:38 PM

Quote:

Originally Posted by pwd72s

Other than the domain name...isn't an online biz simply "blue sky"? NOT trying to be nasty here...really. But when it comes to online? Why not just do your own startup? I mean, it worked for Wayne.

(edit) But hey, what do I know? I've never had an F-car, and a girlfriend with one of the cutest poopers I've ever seen on "real" pics posted here...

So you tell me...was it worth it? Your ride through life so far??? I just hope you're enjoying the ride. It's never been a dress rehearsal.

With all the humbleness and humility I can muster, I can tell you I am pinching myself each and every day. Life is good

I'd like to unload my multimedia biz. I've had it since 1989 and have built quite a portfolio. Also, the domain name absolutely rocks. Someone could hit the ground running with my company and pull in $200K-$300K a year easily. Sure, there is some blue sky there. As anyone getting into a creative biz knows, you have to have good, recognizable clients under your belt to be taken seriously and go after the big dollar projects.

pwd72s · 11-01-2007, 08:42 PM

Motion? Sincerely, I'm glad you are enjoying the ride...

motion · 11-01-2007, 08:48 PM

How could I not? And what a ride its been.

Don Plumley · Don Plumley's Garage

Richard - I'm not too keen on business brokers, like sunbelt, bizbuysell, etc. They are functionally real estate agents. If you want top dollar, find a middle-market M&A firm that will write a real offering memorandum and actively target appropriate strategic and private buyers. PM me if you want to talk through this.

MysticLlama · 11-02-2007, 09:14 AM

I've been in on a few purchases of web businesses. A couple small standalones, and a couple of bigger ones that came with brick and mortars as well.

All of the same due diligence goes into to proving books, financials, projections, etc. In our case it was smaller players in the industry selling out that we aquired and blended in. It doesn't always go as easily at it may seem based on available resources, etc.

Depending on what you do, I may know a couple people that would be interested in taking a look, so PM me the site if you get the chance and I'll send you back any comments or contacts if I know of someone that may be able to run with it.

motion · 11-02-2007, 09:54 AM

Don - Thanks, as usual. Let me chew on this, do a bit of research. I appreciate the offer for more information. I might take you up on that.

Rob - Thank you as well. I am revamping my website currently and will get with you when I have my ducks lined up.

I KNOW I have something good here... at least Homer would agree with me

http://simpsonsite.blogspot.com

stealthn · 11-02-2007, 11:30 AM

I think I know what site you are talking about, but PM me more information as my wife might be interested.

Do you do the ongoing maintenance/updates, or just sell the design and that's it?

Cheers

911Rob · 911Rob's Garage

Richard,

Gonna cash out 'eh?
I'm not sure about on line business sales like 'google', 'hotmail', etc. as there has been some huge sales for internet based businesses South side over the years.

I have sold a few businesses and I market businesses for sale. "Simplified" Rule of thumb has always been that the ROI will be between 3 to 5 years. Therefore, we calculate the worth by taking the 'net' income for the next 3-5 years; so if the business has CA Certified financial statements that say there is $200,000/year in profits; then the business value is that times 3 to 5. If I invest my money into this business, I can expect to receive it back in 3 to 5 years. (an example is that McDonald's Restaurant has a 95% success rate in paying back the investment capital within the first 3 years)

Next is the hard assets; land, buildings, inventory, etc. and those are relatively easy to calculate the worth of; however inventory is discounted, especially old inventory.

Then there's good will (blue sky); which an astute buyer will never pay for (thats me), but sellers often over rate the value.

Other factors are the long term stability of the business without the current owner in place; non-competition clauses; clients, added value for "cash" received vs CA certified financials; other considerations; etc.

My two cents from above the line.......... cheers buddy!

I'm planning a trip to see you next year now that your North.

SlowToady · 11-02-2007, 04:23 PM

Richard, have you considered keeping it, but hiring someone to do the legwork while you sit back and get paid? Removes a lot of the headaches, while still putting some $$ in your pocket. You obviously know a thing or two about business, but the reason I suggest this is that you probably won't get what you think it's worth. As a general rule, internet sites don't sell for more than 18 months worth of revenue. The reasons for this are numerous, but they all point to the business being able to vanish much, much more rapidly than a brick and mortar business. Now it's entirely possible you might get more than 18 months worth; I've seen some go for 2 years. Others for 8 months.

Would you mind PMing me the domain? I certainly am not in the market (if only...), but I'd still be interested to check out the web site.

Good luck

motion · 11-03-2007, 08:06 AM

Bob, the site is www.animotion.com. I do the work myself on this site and most of my projects, although I do have a network of talent I use as-needed. I've gotten away from the HTML programming the past couple of years and focus instead on the art side. Included with the sale will be the domain name, the website, a rockin business card CD, a portfolio CD and dozens and dozens of projects, complete with all Photoshop, Director, Flash, HTML, etc. source code. I'm not even close to figuring out what the biz is worth at this point. I'd like to get a million, but will probably settle for a bit less

The purchase of the business will allow someone to hit the ground running, with 18 years of established business under their belt.

Rob - You gotta make it down!!! I see you aren't all that far away... maybe 10-12 hours or so. And thanks for all the info. Its pretty much what I figured in terms of valuation. Your comments are spot on, of course.

Gavin - I really want to just let it go and end my involvement. I have a friend who "franchised" his multimedia biz out and it ended up being an exercise in hand-holding for the people who bought in. No thanks!

911Rob · 911Rob's Garage

Hey Richard,
How's the weather there? You got snow yet? Too bad we didn't think of this a month ago; I would've come down and had a visit. I don't like doing road trips in my SUV though?

Very interesting website you have there and I'm glad its gone so well for you. Kinda funny; I started a website design company a few years ago; in Calgary. Some geeks I knew needed some money and some business sense; they came to me and we launched it. That was a HUGE launching platform for me...... we should talk; lots of dough to be made in marketing and most of the top sales guys don't have a clue of how to even work a computer.

I'm currently subcontracting my project development web sites out to a company in Vancouver; but we should really talk; let me know how the weather is there; straight South is about the only direction I can go now, so it might work out? Shoot me an email at rob@robmckibbon.com and we'll get hooked up.

I liked your site, keep up the great work.
Cheers,

911Rob · 911Rob's Garage

Just googled your location; wholly crap you're a long ways away.... almost in Wyoming man.

Oh well, when I get the itch for a drive in the Spring?

Cheers,