Over 5 years, I sold 10 web businesses for $5k-$100k each, with the most recent one developed in collaboration with ChatGPT.
Here's a summary of my experience.
What can be sold? How to prepare? How much money you can get? Where to sell? (I prefer @acquiredotcom)
I do many experiments from start to finish: identifying problems, making the initial version, launching it, and seeing the results, which may be good or bad.
I sell for two reasons: either I get bored, or the results are not what I hoped for.
BTW, my next project is mentalwalk.com.
It's a tool to help people learn how to think. Join me as I build a community around it.
1. Things you can sell.
• The only thing that might attract a buyer is the outcome. There are two interesting outcomes: revenue and users. A revenue stream is worth five times more than a user database.
• Think of a business model and test it quickly. Buyers care about how quickly they can restart the project and how easy it is to expand. So, they would rather buy a project with a business model, even if it doesn't make much money.
• If you have 10 users and they generate $100 per month for three months, you'll get attention. If you have 500 users and $0 in revenue expect offers to be low.
• Projects without income and users are not valuable to the market at all. They are often listed for a conditional $1,000 to at least cover the time spent. But buyers don't care how much time and effort you invested.
• And because of the «crappy code of early stages», they'll only buy problems.
• If you have a project without income or users, close it and work on something else.
2. What potential buyers expect to see.
• If you have results, you will receive a list of questions. I'll show you the ones that overlap. Don't skimp on words, answer honestly, suggest ideas, and provide proof.
• Expenses should be kept low. I aim for a budget of $100/m.
• You should have a business model. Most points are given to «subscription». But if users buy repeatedly with a known frequency, it's not much worse.
• There should be some revenue. Basic indicators include monthly and annual growth in the last three months and churn.
• For a web project, the profit margin should not be less than 50%. Some agencies have such a margin, so try to optimize it. (Look at Nomad List by @levelsio as an ideal example.)
• The quantity and quality of users should be measured by their «return» for a given period.
• Think about how easy it is to maintain the project at the current level — technically and operationally. Automate and optimize everything possible.
• What have you done for marketing and sales already? What did and didn't have results, and why?
• The potential buyer will ask for guest access to important indicators such as income, analytics, and mailing statistics. If that's not possible, they will ask for a call and a screen presentation.
• What functionality should be added in the future? What channels should be tried? All the crazy ideas you were thinking of at the beginning should be considered.
3. How much money can you get?
• Based on my experience, expect to get 2-6 times your annual recurring revenue. The amount depends on factors such as your business model, profit margin, and maintenance costs.
4. Where to sell In 2023?
• I categorize platforms into two types. I listed projects on all of them and got at least one response from each.
• Projects worth $0 to $10,000 can be listed on @acquiredotcom (made by @agazdecki), @sideprojectors, IndieMaker, and @micronsio.
• Projects worth more than $10,000 list on @acquiredotcom only.
• I'm aware of Flippa, but I don't prefer using it because there are many low-quality items listed and the selling methods are outdated.
• You will start receiving offers. They may offer you half of the price right away, ask for a call, or request screenshots or written answers.
• You will communicate with potential buyers for a week to a month. Don't reject an offer immediately if it is less than what you expected. Listen to their arguments and try to negotiate. I suggest creating a Google document with all the necessary information for the new owner.
• The buyer usually offers an agreement to buy and might include terms that prevent you from competing. Check what's being offered and ask to remove anything that's uncomfortable.
• Once I was asked for a 3y non-compete. Since the sale price was $10,000, I reduced it to 1y.
• If the buyer hasn't mentioned it, I suggest including 1-3 months of support from me in the contract. This could include answering questions, a set amount of calls, or new ideas I come up with.
• Use an escrow service. This is a third party that freezes the buyer's money and transfers it to you when the deal is done. @agazdecki integrated it into Acquire, but since I can't use it, I receive money via a SWIFT transfer.
• I split the transfer into two parts for the buyer's convenience. After the first payment, I transfer the technical part; after the second, the domain. Or vice versa.
Conclusions.
• Consider selling only if your business has revenue or users.
• When presenting your business, be sure to tell your story and show the numbers, as well as suggest ideas.
• Look into marketplaces like Acquire, SideProjectors, IndieMaker, and Microns.
• Be patient and responsive, answering any questions and following up as needed.
• And keep in mind, typically you can expect to receive a multiple of 2-6 times your annual recurring revenue.
Best of luck!