1. This website uses cookies to improve service and provide a tailored user experience. By using this site, you agree to this use. See our Cookie Policy.
    Dismiss Notice

Lessons I Learned Selling an Online Business For Six-Figures (Thanks FE International!)

Discussion in 'Site Flipping' started by t0mmy, Nov 20, 2015.

  1. t0mmy

    t0mmy Executive VIP Jr. VIP

    Joined:
    Jun 5, 2011
    Messages:
    7,260
    Likes Received:
    15,571
    Gender:
    Male
    Location:
    Spain
    Home Page:
    Didn't know you where from the wee country. Yeah next time for sure.. we can have a wee pint, a few crisps sandwiches and discuss the weather! ;)
     
    • Thanks Thanks x 1
  2. switchblade

    switchblade Registered Member

    Joined:
    May 7, 2014
    Messages:
    82
    Likes Received:
    21

    Thanks for the tip regarding the SPP system. Seems like a good software. Also good that they have 2CO integrated into their system.
     
  3. t0mmy

    t0mmy Executive VIP Jr. VIP

    Joined:
    Jun 5, 2011
    Messages:
    7,260
    Likes Received:
    15,571
    Gender:
    Male
    Location:
    Spain
    Home Page:
    Yup really slick man, their support is excellent too. I spent the past few days chatting with Chris the owner, very helpful and eager to add more to the tool. I told him he should raise the price! I remember being quoted in the region of $7k to build something similar to this not so long ago.
     
  4. LoftPower

    LoftPower Elite Member

    Joined:
    Feb 23, 2015
    Messages:
    3,181
    Likes Received:
    405
    Once again an amazing post. Great job.
     
  5. pixelgrinder

    pixelgrinder Jr. VIP Jr. VIP

    Joined:
    Apr 1, 2008
    Messages:
    671
    Likes Received:
    348
    How did you/Thomas calculate the valuation of your business? Just the standard 5-10x EBITDA or something else?
     
  6. t0mmy

    t0mmy Executive VIP Jr. VIP

    Joined:
    Jun 5, 2011
    Messages:
    7,260
    Likes Received:
    15,571
    Gender:
    Male
    Location:
    Spain
    Home Page:
    Not exactly but something similar.. each sale is going to be different so it's never that simple, there are a number of other variables that come into the valuation. Thomas could explain it better than I ever could.
     
  7. meathead1234

    meathead1234 Moderator Staff Member Moderator Premium Member

    Joined:
    Sep 24, 2008
    Messages:
    3,849
    Likes Received:
    14,412
    Multiples of EBITDA are rarely used on small business sales (usually under $1m in profit). Most brokers (including us) use SDE (seller discretionary earnings) which is effectively net profit/EBITDA excluding owner salary/compensation.

    We look at a lot of factors when valuing, there's no "standard" multiple as it really depends on the business. Our average is around 2.7x annual SDE but it can range significantly depending on the business.
     
    • Thanks Thanks x 2
  8. pixelgrinder

    pixelgrinder Jr. VIP Jr. VIP

    Joined:
    Apr 1, 2008
    Messages:
    671
    Likes Received:
    348
    That's actually really good. Thanks for clarification
     
  9. THUNDERELVI

    THUNDERELVI Elite Member

    Joined:
    Sep 12, 2009
    Messages:
    2,552
    Likes Received:
    2,245
    Gender:
    Male
    Location:
    W3
    When selling a business (not just a website), is it better to have a centralized office for your staff where you handle everything physically? Will it add more value (and increase the selling price) rather than outsourcing the work to different people all around the world and handle everything online? I never sold an actual business and this post is really helpful, especially the automation part, thanks tommy!
     
  10. meathead1234

    meathead1234 Moderator Staff Member Moderator Premium Member

    Joined:
    Sep 24, 2008
    Messages:
    3,849
    Likes Received:
    14,412
    If it's an "online" business then having a central office is not going to help as it limits buyers geographically. Ideally you would have a remote team. If the business is bigger (say, $1m+ a year net) then an office is fine.

    With an offline business, it's more likely you would have an office/location with all of your team and buyers would be local so it's less of an issue.
     
    • Thanks Thanks x 2
  11. THUNDERELVI

    THUNDERELVI Elite Member

    Joined:
    Sep 12, 2009
    Messages:
    2,552
    Likes Received:
    2,245
    Gender:
    Male
    Location:
    W3
    Thanks for the answer, appreciate it. The business I am talking about is providing ORM services to small/medium-sized businesses (well-known business model in BHW thanks to the famous 7878 threads). To be honest, the package doesn't include just ORM, it also includes other online services such as email marketing and social media. The clients are from all over the world (mostly US/UK/EU). I believe this is qualified as an online business right? Thanks!
     
  12. t0mmy

    t0mmy Executive VIP Jr. VIP

    Joined:
    Jun 5, 2011
    Messages:
    7,260
    Likes Received:
    15,571
    Gender:
    Male
    Location:
    Spain
    Home Page:
    Thomas got there before me. I would add that my remote team was one of the bigger selling points in this deal.. I was able to give the buyer a full team that was trained and well versed in how the business operates.
     
    • Thanks Thanks x 1
  13. Euphorix

    Euphorix Supreme Member

    Joined:
    Feb 20, 2015
    Messages:
    1,328
    Likes Received:
    836
    Location:
    Mountain View, CA
    Congratulations! Wishing you both continued success :)
     
  14. Aatrox

    Aatrox Supreme Member

    Joined:
    Feb 27, 2014
    Messages:
    1,429
    Likes Received:
    1,067
    This post just told me to get as far away as possible from Flippa. Awesome stuff shared again t0mmy, I hate you for that. :)
     
  15. THECORE1337

    THECORE1337 Junior Member

    Joined:
    Apr 5, 2016
    Messages:
    193
    Likes Received:
    77
    Occupation:
    Being 1337
    Location:
    Looking for a Zero Day
    Home Page:
    it is interesting to see the higher end. still amazing me how much can be made.
     
  16. pasdoy

    pasdoy Senior Member

    Joined:
    Jul 17, 2008
    Messages:
    901
    Likes Received:
    304
    Good review, thanks. I am also selling my website with FE Internatinal atm. They are very helpful.
     
  17. macdonjo3

    macdonjo3 Jr. VIP Jr. VIP

    Joined:
    Nov 8, 2009
    Messages:
    6,422
    Likes Received:
    5,032
    That's exactly why you buy from FE International and not Flippa. You don't get scammed.
     
  18. makejapan1

    makejapan1 Junior Member

    Joined:
    Apr 15, 2016
    Messages:
    116
    Likes Received:
    27
    Great post, I hate flippa with a passion nowadays
     
  19. sadecentpoint

    sadecentpoint Junior Member

    Joined:
    Oct 9, 2013
    Messages:
    151
    Likes Received:
    11
    I have also sold one of my website there and was blown away by the service provided. top notch
     
  20. techcloud7

    techcloud7 Newbie

    Joined:
    Jun 19, 2013
    Messages:
    19
    Likes Received:
    0
    Gender:
    Male
    cong..brother can you please tell me how to contact them i have a site which i would like to sell.