How do you come up with a figure for how much to sell your adult oriented business? Is there a general rule of thumb?
Selling your company
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The only "right" answer is: What someone is willing to pay for it.
I recently purchased an adult business for something like 5 months of turnover (not profit), because I felt it had potential.
If you are selling a bunch of affiliate websites, I would never pay more than 3 x monthly profit. Because usually, most of that stuff being sold is crap. But some might want to pay more, so it comes right back to where I started: What people are willing to pay
But.... I pulled out... -
A good and solid online business should make 2 or 3 years of revenue as sales price.
Fire sales are priced around 6 months, but why sell for it?
We can always wait 6 months for sales to roll in, can't we?Comment
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sheep say thatThe only "right" answer is: What someone is willing to pay for it.
I recently purchased an adult business for something like 5 months of turnover (not profit), because I felt it had potential.
If you are selling a bunch of affiliate websites, I would never pay more than 3 x monthly profit. Because usually, most of that stuff being sold is crap. But some might want to pay more, so it comes right back to where I started: What people are willing to pay
wolves say what you can MAKE them payThis dog, is dog, a dog, good dog, way dog, to dog, keep dog, an dog, idiot dog, busy dog, for dog, 20 dog, seconds dog!
Now read without the word dog.Comment
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Many factors are at play. For a service based business without hard assets it would be a fair price based on stable revenue. Let's say a website that brokers ads or sells memberships for years. Of course it would depend on stable history. And I know, cheap bargain hunters will disagree ...
If you have a strongly growing business that made 20k last year and 200k this year, you would have projected earnings of 2 Million for next year. Then a price of 6 Million would be more appropriate.
If hard assets like real estate and patents are included it would increase the number.
Anyhow, it all depends to how good your business is and how much it is worth to others and not based on numbers, only.Last edited by faxxaff; 03-01-2013, 11:37 AM.Comment
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I'd want at least 2 years gross. I've turned down 1 years gross before on a payment plan. I want money in an escrow and not payments. The trick is if it's making money never be desperate to sell. And dont buy into the BS that there is a formula for an online adult business. As it was stated before, it's worth what someone will pay for it and what you will take. If it's a good business with a brand hold out.
dukeComment
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You confused me and excited me at the same time. It's a 13 year old well established business. You confused me with the formula above, are you talking about monthly or yearly?Many factors are at play. For a service based business without hard assets it would be a fair price based on stable revenue. Let's say a website that brokers ads or sells memberships for years. Of course it would depend on stable history. And I know, cheap bargain hunters will disagree ...
If you have a strongly growing business that made 20k last year and 200k this year, you would have projected earnings of 2 Million for next year. Then a price of 6 Million would be more appropriate.
If hard assets like real estate and patents are included it would increase the number.
Anyhow, it all depends to how good your business is and how much it is worth to others and not based on numbers, only.
Business has been pretty steady over the last 5-6 years.Comment
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Yeah, you will never see your full money on a payment plan. There are some burned sheep on this board who sold out on payment plans and had their merchant account closed due to fraudulent activity of the buyer during transition.
Why escrow? Ask for a letter of credit or guarantee from their bank It's less than 50 bucks in fees. It's much more reliable and cheaper than escrow.Comment
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I'd want at least 2 years gross. I've turned down 1 years gross before on a payment plan. I want money in an escrow and not payments. The trick is if it's making money never be desperate to sell. And dont buy into the BS that there is a formula for an online adult business. As it was stated before, it's worth what someone will pay for it and what you will take. If it's a good business with a brand hold out.
duke
Yah, no desperation at all here. Just interest. And of course if the price is right - who the heck knows.
I may contact that auction dude.Comment
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I was talking yearly revenue. Basically, what counts is the projected revenue for the next two years. If it is growing you have the potential for being way more than status quo. If you are stagnating or moving down, it's a warning sign for buyers.Comment
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We definitely grew in the last year. 2011 I had 100k drop, but 2012 had 100k increase which puts me up 200k since 2010.
My goal this year is to process a mil - but, that's certainly not profit.Comment
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You should send an email giving details of exactly what you are selling including numbers to Evan at Hunting Moon, (email already given by him in another post).
Talk to a straight talking guy with actual sales under his belt who does this for a living not people with their own ideas of the market and the "norm" based on what they would sell their own business for or pay for somebody else's.Comment
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I did contact him - and eh, the price isn't right for me yet and I am not desperate to sell and get out of the adult world yet. However - when I am ready, I will hit him back up for sure. Seems to be a very nice guy.You should send an email giving details of exactly what you are selling including numbers to Evan at Hunting Moon, (email already given by him in another post).
Talk to a straight talking guy with actual sales under his belt who does this for a living not people with their own ideas of the market and the "norm" based on what they would sell their own business for or pay for somebody else's.
I appreciate your guys advice and input.Comment
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3 months gross is fairly common, but, just to kind of reiterate what has been said in this thread, in any business sale, there is the intrinsic value and then there is the value to a strategic buyer i.e. someone where your business fits synergistically into their existing properties.Comment
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This is solid.I'd want at least 2 years gross. I've turned down 1 years gross before on a payment plan. I want money in an escrow and not payments. The trick is if it's making money never be desperate to sell. And dont buy into the BS that there is a formula for an online adult business. As it was stated before, it's worth what someone will pay for it and what you will take. If it's a good business with a brand hold out.
dukeTodd Spaits - Co-founder -YanksCash
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Generally you are looking at between 6 and 12 months earnings. It will depend on many factors such as the quality of the product, average RRC's and how steady rebill rates are.SEO Strategy - Digital Strategy - Cannabis Lead Generation
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depends how optimized you are, if you are fully optimized and I see no room for improvement then I'll pay monthly revenue times ( x months)
if I see weakness or under optimization then I'm willing to go to a higher monthly multiplication as I know with a few tweaks income could be significantly increased therefore cutting positive return time downComment
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I'm sure someone who was a web guru would see tons of holes in my game and lots of ways to improve.depends how optimized you are, if you are fully optimized and I see no room for improvement then I'll pay monthly revenue times ( x months)
if I see weakness or under optimization then I'm willing to go to a higher monthly multiplication as I know with a few tweaks income could be significantly increased therefore cutting positive return time downComment



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