Forums: Discussions for entrepreneurs and small business.

Excuse me for going anonymous here but, of course, selling a business isn`t neccessarily something you want the world to know until it`s done. 

I have an online business that is a service provider in a small industry.  Hard assets are nearly non-existent in my business as I have no inventory for sale.  I do have a domain name, a good brand recognized by the industry, loyal customers who stay long-term to partake of the literal vault of information I have gathered together.  I fear, though, that I am a bit like Martha Stewart (sans the felony convictions or annoying mannerisms ),  I AM the business in many people`s eyes.

The business has NO debt and has turned a profit almost since it was started 5 years ago.  It`s not burning up the universe revenue wise for MOST people, but in my industry, it does okay and I am able to take enough out of it to make me happy. 

I have an interested buyer who is already involved in my business, but pricing it is the issue.  BECAUSE there are almost no hard assets, I can`t say, "Here`s what you get".  I am leaning towards one year of AVERAGE revenues multiplied by 1.25 (there is no "standard multiplier" for my type of business).  The one year of average revenue is basically to compensate me for building the the business.  The .25 is for the assets like domain, brand, customer lists, goodwill, all that stuff. 

Am I heading down the correct path?  The 1.25 mulitplier gets me to the price I want to at least start negotiating at. 

Any advice for selling a business with few assets and a ton of happy customers?

Thanks!

MizANonymous

 

Growth drives buisness price.  Have you been growing 30, 40, 50% yr/yr?  If so then you should command a higher price.  If not, then go for whatever your comfortable with.

-------------------------

Travis Tschepen
Hibachi Bros. LLC

--My goal in life is to be as good of a person my dog already thinks I am.--

My growth has been level, but then, my effort has slacked off in recent years as I started to see the exit coming.  But, I guess I actually HAVE grown, because my industry took a nosedive 2 years ago so while the industry as a whole was tanking - actually, it wasn`t tanking, it was just going from double digit growth down to single digit growth, I was holding my own. 

If I had the desire to DO MORE and invest more, I would have grown faster, but I wanted to control the growth and grow at the pace that fit with my life plan.