If you find a significant business that someone is willing to sell for only 3 to 6 months earnings I'd run like hell from that deal cause I guarnatee you, there will be lots of unpleasant surprises once you take over.
You'd have to be a complete lame brain as a seller to sell a solid moneymaking business for so little.
Just my 2 cents and speaking from years of experience looking at deals . . .
The funny thing is there are some players that would probably let go of their goldmines for 2 to 3 years earnings and you'll get a really good business.
If you find a significant business that someone is willing to sell for only 3 to 6 months earnings I'd run like hell from that deal cause I guarnatee you, there will be lots of unpleasant surprises once you take over.
You'd have to be a complete lame brain as a seller to sell a solid moneymaking business for so little.
Just my 2 cents and speaking from years of experience looking at deals . . .
The funny thing is there are some players that would probably let go of their goldmines for 2 to 3 years earnings and you'll get a really good business.
Your are very correct,
I have been around since 1997 and have seen a few deals.
I have worked for 2 major programs, 1 was the largest program
known to mankind in 1998/1999 ( Xpics )
Actually he wasn't...if I remember correctly is was the thread where pichunter was trying to sell for some insane $$ amount. Lens was just putting his 2 cents in.
Well, with all due respect to Lensman, he is crazy . . . or thinks the seller must be.
Interesting thread, let's of great opinions. It's funny reading threads like this though, you can really see who has a good grasp of BUSINESS and who has money and common sense. I'll be that last person to judge either of them, but the different perspectives are certainly intriguing.
Selling a TGP that makes $1000 a month compared to selling a program with 30,000 active recurring members.
3-6 months makes sense for the TGP but those active rebills in the program can go on and on, declining of course, for quite some time.
If the sites were well promoted then there would still be a nice amount of traffic hitting the sites regularly.
Two things
1) Nobody keeps members for more than 6 months (oh maybe you have one or two guys that have been there for years but we need to look at averages)
2) Alot of times when paysites are sold the previous owner keeps the rebills for all of the members that were there when the site was sold, the new owner gets credit for all of the new sales/rebills etc.
Basically in a deal like this you're buying the sites/domains/traffic/content and that's it.....if you're going to buy the members too then you'll pay per member based on the average retention of the site which is probably no more than.....you guessed it....3 months.
If you find a significant business that someone is willing to sell for only 3 to 6 months earnings I'd run like hell from that deal cause I guarnatee you, there will be lots of unpleasant surprises once you take over.
You'd have to be a complete lame brain as a seller to sell a solid moneymaking business for so little.
Just my 2 cents and speaking from years of experience looking at deals . . .
The funny thing is there are some players that would probably let go of their goldmines for 2 to 3 years earnings and you'll get a really good business.
Agreed. I am brokering the sale of a paysite that has been around since '98 and I keep getting these idiots that want to offer 3-6 months income like my client should consider it a serious offer.
1) Nobody keeps members for more than 6 months (oh maybe you have one or two guys that have been there for years but we need to look at averages)
2) Alot of times when paysites are sold the previous owner keeps the rebills for all of the members that were there when the site was sold, the new owner gets credit for all of the new sales/rebills etc.
Basically in a deal like this you're buying the sites/domains/traffic/content and that's it.....if you're going to buy the members too then you'll pay per member based on the average retention of the site which is probably no more than.....you guessed it....3 months.
Well, with all due respect to Lensman, he is crazy . . . or thinks the seller must be.
Its possible that my memory is failing me but I'm 90% sure that's what he said.
But its just like the old saying...a business is worth whatever you can get someone to pay you for it.
Sometimes the DOW is worth 35 times earnings and sometimes its only worth 20...its all a matter of what the market will bear at a given time.
1) Nobody keeps members for more than 6 months (oh maybe you have one or two guys that have been there for years but we need to look at averages)
2) Alot of times when paysites are sold the previous owner keeps the rebills for all of the members that were there when the site was sold, the new owner gets credit for all of the new sales/rebills etc.
Basically in a deal like this you're buying the sites/domains/traffic/content and that's it.....if you're going to buy the members too then you'll pay per member based on the average retention of the site which is probably no more than.....you guessed it....3 months.
We have over 600 members that have rebilled over 12 months.
We have over 200 members that have billed over 18 months.
I guess 3 months is for the shitty sites that are not exclusive or niche.
Its possible that my memory is failing me but I'm 90% sure that's what he said.
But its just like the old saying...a business is worth whatever you can get someone to pay you for it.
Sometimes the DOW is worth 35 times earnings and sometimes its only worth 20...its all a matter of what the market will bear at a given time.
I bet you a loy of people would have sold real cheap when the 2257 scare was hotter a bit before the elections.
I have been around since 1997 and have seen a few deals.
I have worked for 2 major programs, 1 was the largest program
known to mankind in 1998/1999 ( Xpics )
Xpics is certainly a good example of caveat emptor.
HomegrownCash.com, the affiliate program of Homegrown Video - The Largest Collection of Amateur XXX - Est. 1982.
Contact - Email: farrell AT homegrownvideo D com Skype: hgfarl
Newsweek Magazine - "Homegrown Video, the longest running series in the history of porn."
if you're going to buy the members too then you'll pay per member based on the average retention of the site which is probably no more than.....you guessed it....3 months.
Active recurring will go on and on. There will be a steady decline only if promotion stops and no new joins are taken but there will still be more then 1/2 even at the 6 month mark.
Alot of webmasters have no real idea on the value of programs
or perhaps their own programs.
Value should be depicted from:
Revenue (rebills)
Daily Revenue ( average new joins )
Traffic ( webmasters and surfers )
Content ( if its niche/exclusive )
Webmaster Database
Members Database
One important fact often overlooked, Has the program
maintained any growth or have the held steady for a significant
amount of time ?
Active recurring will go on and on. There will be a steady decline only if promotion stops and no new joins are taken but there will still be more then 1/2 even at the 6 month mark.
There's no way the average paysite stops taking traffic today and still has half of its members in 6 months. NO WAY.
Obviously you can keep the member count constant with new traffic coming in, but that new traffic is yours, not the previous owners.
And obviously if the site doesn't come with the rebills the price will be much lower....that goes without saying.
However that is one way to work the deal, especially if the previous owner pulls some really shady billing on the way out the door....the new owner doesn't want to eat the chargebacks for that....so the new owners get a new merchant account (or IPSP account) to process from and the old owner keeps his old members and his credits/chargebacks
Alot of webmasters have no real idea on the value of programs
or perhaps their own programs.
Value should be depicted from:
Revenue (rebills)
Daily Revenue ( average new joins )
Traffic ( webmasters and surfers )
Content ( if its niche/exclusive )
Webmaster Database
Members Database
One important fact often overlooked, Has the program
maintained any growth or have the held steady for a significant
amount of time ?
This shows security in the site.
You could add brand recognition to that list but otherwise I say that is some excellent advice.
HomegrownCash.com, the affiliate program of Homegrown Video - The Largest Collection of Amateur XXX - Est. 1982.
Contact - Email: farrell AT homegrownvideo D com Skype: hgfarl
Newsweek Magazine - "Homegrown Video, the longest running series in the history of porn."
Alot of webmasters have no real idea on the value of programs
or perhaps their own programs.
Value should be depicted from:
Revenue (rebills)
Daily Revenue ( average new joins )
Traffic ( webmasters and surfers )
Content ( if its niche/exclusive )
Webmaster Database
Members Database
One important fact often overlooked, Has the program
maintained any growth or have the held steady for a significant
amount of time ?
This shows security in the site.
I agree with that....but I still won't give you 1.75 million....LOL
(Not that I have that lying around anyways)
Alot of webmasters have no real idea on the value of programs
or perhaps their own programs.
Value should be depicted from:
Revenue (rebills)
Daily Revenue ( average new joins )
Traffic ( webmasters and surfers )
Content ( if its niche/exclusive )
Webmaster Database
Members Database
One important fact often overlooked, Has the program
maintained any growth or have the held steady for a significant
amount of time ?
This shows security in the site.
Those items and others. Name recognition is another asset.
However that is one way to work the deal, especially if the previous owner pulls some really shady billing on the way out the door....the new owner doesn't want to eat the chargebacks for that....so the new owners get a new merchant account (or IPSP account) to process from and the old owner keeps his old members and his credits/chargebacks
It is a valid point. I have had potential buyers that have stated they don't want the existing members
Anytime I see anyone use the term EBITA
I must say I get impressed-
It just tells me there are some REAL businessmen this left in this business.
Thanks Marty you gave me some hope going into this tradeshow that I will meet and talk to some old schoolers who know about business and don't do business with people just because they bought them a drink...
:-))
Hey, KB... how much EBITA you got in your wallet? lol I'm selling some hoes
In your case brand recognition would be the most valuable part of the package.
But very few in this biz have that sort of branding.
Thanks for the compliment! I do think there are quite a few good to some great brands out there. Lord knows the competition these days is fierce..
Assets like domains would also have to be added to the list for evaluation.
HomegrownCash.com, the affiliate program of Homegrown Video - The Largest Collection of Amateur XXX - Est. 1982.
Contact - Email: farrell AT homegrownvideo D com Skype: hgfarl
Newsweek Magazine - "Homegrown Video, the longest running series in the history of porn."
KB hoes are a better investment in today's market... imo...
HomegrownCash.com, the affiliate program of Homegrown Video - The Largest Collection of Amateur XXX - Est. 1982.
Contact - Email: farrell AT homegrownvideo D com Skype: hgfarl
Newsweek Magazine - "Homegrown Video, the longest running series in the history of porn."
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