Discussion point, drop ship site sold for 100K, built from scratch

[catweasel]

I was looking for a "general lounge" forum but couldn't find one... so I'll post my find here instead.
Today, while browsing my usual news sites I came across this article and video from mixergy
This is an interview with a guy who built a dropship business selling custom car plates, claims 80k/year profit and sold it for "around 100k" on Twitter 4 years after startup. Interesting stuff and worthy of discussion.

[Clinton]

Well done, Sean. It just goes to show you don't need a complicated idea or a fancy algorithm. Just look for where demand exists ... and cater for it. It took the bloke a lot of time and energy building the business up and he got a price he was happy with.

I can't help thinking though that for sites that size an auction format may lead to a higher selling price than a private deal.

PS: I've created a General Category and moved your thread.

[mpcovcd]

I felt the same way as Clinton, for a site making $80K / year even if that amount was only true for the past year it should have gone for more than $100k.

[catweasel]

I felt the same way as Clinton, for a site making $80K / year even if that amount was only true for the past year it should have gone for more than $100k.

I actually liked his response to this point in the interview when it was put to him that he sold too low. Basically he's point is if the buyer is there with the cash sometimes you just gotta seize the day.. you could have it on the market for another year just to get another 10k or sell now for money in the pocket today.

[mpcovcd]

That would be true if the amount was nominal such as $10K but in an auction setting I'm fairly sure the bidding would have reached into $2xx,xxx - another $100K may be nominal for you but I would willing to hold the site for another 6 months if my earnings were to double. In the end I didnt read the article and the $1xx,xxx amount might have been towards the higher end in which case his decision may be justified.

[Clinton]

Business schools teach that you should always be prepared for a sale. In fact, they suggest you should have an "exit plan" when you start the business. In theory it's great to have all your documentation, business plan, DD related material etc., always up-to-date to present to an interested buyer. After all, you spend a lot on the sales pitch for your products and on getting the customer through the door, so why not be even better prepared for the much larger sale that is your whole company?

In theory.

In practice it's a bit more difficult to keep all that documentation up-to-date for years and years in the hope that an unsolicited approach may materialise from just the right party who sees enough synergy to pay you over the market price for your company. But I do try. Especially with those records that don't take a lot of time to maintain. Like storing copies of traffic logs.