The Guide to Selling a Business Online on Flippa
Why Sell a Business Online?
In this detailed guide, you will discover how Selling your online business (eg websites, domains, apps, e-commerce store) profitably on Flippa.
It may seem like a difficult task, but it’s actually easy.
There are two questions we need to answer here:
Why are you selling your business online? and why sell it on Flippa?
To give you a better idea, the demand for online businesses today is through the roof. Take a look at Google’s trend data for “buy website” over the last 12 months, you can see that the demand has been pretty consistent:
The goods Digital roots are gaining momentum by the day, especially in this era where businesses and economies have become more dependent on the web.
If you have a digital asset, you might be thinking: should you sell the digital asset? business or continue to run it? ? This concern is commonplace, especially among people who have bought and sold physical businesses for a long time.
Getting a large balloon payment could be a good reason to sell your business. For some, selling their business online means they will work less, venture into new projects, or use it as a mechanism to pay off debt (eg, student loans, a home loan) and gain financial independence.
Perhaps you would be happier with a payment equal to or even greater than a couple of years of income. That way, you can (probably) retire or take a gap year and spend quality time doing what you love.
For others, you simply want to focus on another project and build a different profitable business, leaving you without the time needed to run this.
The reasons for selling a business online are varied. I remember selling my business to invest in property while my friend sold his business to buy a car. Making a physical purchase can require a large amount of money, which can take years to accumulate through traditional savings.
Need money for your children’s college tuition? Want to help your parents with their retirement?
All of this and more could be why you’re excited to sell your business online.
As an entrepreneur, you’ll agree. Starting a business can be exciting, while managing daily tasks can get tedious.
When it comes down to it, your business may have outgrown your skill set as well, and you’re deciding what to sell the business to. another person with the necessary skills is better for everyone. You can access the funds and freedom you seek, and you will pass your business on to a new owner dedicated to running the business.
The decision to sell your business comes with mixed emotions. We’re here to guide you through the process of selling your business online, so you can get the most out of it.
Why sell your business on Flippa?
Flippa is not only the original platform to buy and sell business online, but also the largest and most trusted platform to sell your business online. Over the past decade, Flippa closed the most sales ($400 million or more), attracted thousands of loyal shoppers, and created a platform that’s easy to use (even for beginners).
With over 1, 5 million active users Flippa attracts around 5,500 new users every month. This has led to more than 10 million searches each month. Flippa also has an active user base, constantly interacting with the site, searching for new listings, and starting meaningful discussions between buyers and sellers.
You’ll soon discover that Flippa makes buying and selling businesses online easy. and simple for the user. -friendly.
1. Flippa is a peer-to-peer platform
Flippa is a peer-to-peer platform – unlike other trading platforms, you don’t need to hide behind brokers or other service providers if you I do not want to do it. You can create your listing and provide as much detail as possible.
You can chat directly through the Flippa platform and easily answer buyers’ questions. And most importantly, you can determine the price you are willing to accept for your business. You’re in complete control and it’s a great place to enter into a sales agreement, pre-qualify buyers, sign a purchase agreement, a non-disclosure agreement, and much more.
2. Flippa allows you to negotiate with potential buyers
Another defining factor that makes Flippa stand out. Yes, you can negotiate with potential buyers.We encourage you!
You’ve spent time building a ready-to-sell business, so it’s completely up to you why you want to sell it. Flippa simply supports you along the way, providing information on valuations, putting your business in front of the largest number of eligible buyers, and facilitating discussions between buyers and sellers.
3. Flippa provides secure transactions
Do you want secure and hassle-free transactions? Flippa has you covered. You can feel secure through Flippa’s or Escrow’s service, knowing that your transactions will go smoothly and smoothly.
Nothing is more important than ensuring secure transactions on any platform, especially when selling a business. I have worked very hard on.
4. Flippa is an affordable marketplace
Flippa is an affordable service. Listing fees are low and success rates are the best on the market. While you may come across similar marketplaces that don’t ask for a listing fee, they also don’t come with the technology, security, and committed user base that Flippa brings to the table.
5. Flippa Broker Matching
When you join and list your business for sale on Flippa, we offer two options; either ‘self serve’ or ‘matching brokers’. A broker may be the best option if you want additional support in selling your business. Brokers will review your valuation, work with potential buyers, help prepare critical paperwork and field bids, and manage the DD process. You can find more information about Flippa’s Broker Matching program here.
How much is my business worth?
Many sellers, especially first-time sellers, may not know where to start to determine their business. worth. Flippa is the best place to be for anyone selling a business online.
As the largest and most established marketplace for buying and selling businesses online, we have the largest amount of sales data to give you an accurate assessment of the value of your business.
Valuing a restaurant or a laundromat may seem easier, since there are decades of data available to study and consult. Still, we’ve compiled ten years of commercial sales data to help make valuation as easy as possible.
Remember that buyers look for opportunity, but will pay for performance. This is important to remember when deciding the value of your business. Salespeople often tell us, “My business is worth XX dollars because of the incredible opportunities for growth.”
While that may be true, most buyers base the value of a business on past performance and proven income. Some other factors can influence the valuation of your company, such as:
- If a company has legal problems (eg, a business partner, a competitor, etc.).
- The type of deal structure.
- A company’s credit history (eg, commercial credit cards).
- Loyalty of the customer base.
- Legal documents (eg, non-compete agreement, intellectual property, employee stock options, etc.).
- Financial modeling (eg, level of detail of financial records or the type of accounting principles a business uses: top-down accounting or the bottom-up approach) .
- Wealth management and how a business handles profits (p (eg, what types of assets a company has on its balance sheet).
- Diversity of revenue channels (eg, an HR software company might run on a SaaS model, in the q Customers pay a monthly fee to use a company’s software. Still, you could also have other revenue streams such as big data, affiliate commissions for referrals, opt-in commercial advertising, etc.)
- Are there opportunities to upsell?
You can also use Flippa’s online valuation tool to find an approximate value of your business that will help you in your exit plan.
So what does it mean when you say that buyers are looking for ‘opportunity’ in an asset? They’re looking at your page views, keyword rankings, social media following, email subscribers, website age, and potential revenue that could be generated. But at the end of the day, buyers pay for performance.
So, let’s dig in and first see how you’ll want to price your annual earnings.
Seller Discretionary Earnings (SDE)
What is the valuation of your business? To address this critical question, let’s explain what performance looks like, and for Flippa, Seller Discretionary Earnings (SDE) is the best metric.
SDE provides a meaningful and realistic view of how his business has performed. web business. in the last six months, a year or within a certain period. Past performance can be the benchmark for valuation, and SDE provides an easy way to value a small business run by one or two owners.
Also consider the following, which is no transfer costs.
Before taxes, as well as pre-interest earnings before non-cash expenses, disclose how much money your business is making annually.
Any one-time expenses can be removed from your list of expenses.For example, if If you had to pay $25,000 to build your website or $5,000 for a legal consultation, you can remove these expenses from the valuation as they won’t need to be paid again, it’s a one-time expense that a new owner doesn’t need to worry about.
All unrelated business expenses can also be eliminated.For example, business meals, travel, car payments, health insurance or other expenses will not necessarily apply to a new owner.
And, Finally, you’ll want to add your salary back to earnings, as the new owner will decide when how much you decide to pay yourself.
Assuming you’ve ever had expenses and you’re drawing a salary, your SDE on your profit and loss account should be greater than your EBITDA.
What are the average sales multiples at Flippa?
Buyers look for opportunities but pay for performance.
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