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Ask HN: Does my company with $140,000 annual revenue have any value?

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Re: Ask HN: Does my company with $140,000 annual revenue have any value?

#11

Post by hadley »

ibgeek wrote: post #7

Keeping the business may be to your advantage. Stipends at graduate schools are often around $25k/year, so your business would allow you to make the same amount of money with almost no effort. Since they are often funded out of professors' grants, you're limited to working with professors who have funding and have to do their research. If you keep the business and fund yourself, you'd basically be able to go to grad…

As well as paying your (meagre) salary, the funding usually also covers your tuition. So while $25k / year will cover your salary, it won't also cover your tuition.

Re: Ask HN: Does my company with $140,000 annual revenue have any value?

#13

Post by genericbusiness »

While we're discussing this: I've written some software that generates approximately $200k/year in passive income (and growing), with almost no ongoing maintenance or support required. Anyone working on it full time could double it quite quickly, I think. (I'm working on some other projects.) At that level, how should I go about selling it?

Re: Ask HN: Does my company with $140,000 annual revenue have any value?

#14

Post by honopu »

So you are billing out 110k a year which is 733 or less hours per work a year.

Somewhere between 110k and 733 hours of labor is an asset you are just looking to throw away.

If you look at subbing it out to someone else(though they get full source, i mean they have to) and if you pay this/these guys 60/hr, you are looking at paying out around 44k-ish a year plus lazy bloat so probably 60k a year.

You should hopefully realize you have built something pretty awesome, you are just missing the steps covered by: http://www.amazon.com/E-Myth-Revisited-Small-Businesses-Abou...

which basically means that you need to put processes into your system where you can sub yourself out as needed and someone else can handle this. Support requests and RFQs going to your personal email aren't conducive to this. Using things like zendesk, some other support app etc would be really beneficial.

So really you have 25k a year + a hose of consulting money you can divvy up/spray around as you see fit.

You really have something cool here, you should value it correctly. People buy jobs all the time, isn't that what college is all about?

Re: Ask HN: Does my company with $140,000 annual revenue have any value?

#15

Post by csomar »

Idea: Don't sell it. You are profitable. Hire a geek, let him learn the framework and do custom development for you. Take a part, for example, if he bills $120/hour you take $20/hour. You'll also make passive money selling licenses. Hire a customer support person if you don't have time to do it yourself. You can hire it remotely; but I prefer that the developer is hired locally.

HN, please comment on my idea, as I don't have any real-life experience.

Re: Ask HN: Does my company with $140,000 annual revenue have any value?

#16

Post by lftl »

genericbusiness wrote: post #13

While we're discussing this: I've written some software that generates approximately $200k/year in passive income (and growing), with almost no ongoing maintenance or support required. Anyone working on it full time could double it quite quickly, I think. (I'm working on some other projects.) At that level, how should I go about selling it?

$200k/year is probably pushing the amount that would be worth trying somewhere like flippa.com, but I have seen a few businesses in that range there.

Bizbuysell.com has a lot of businesses more in that ballpark, and if you want to be a little more proactive in selling it you could talk to a business broker about selling it.

Re: Ask HN: Does my company with $140,000 annual revenue have any value?

#17

Post by honopu »

genericbusiness wrote: post #13

While we're discussing this: I've written some software that generates approximately $200k/year in passive income (and growing), with almost no ongoing maintenance or support required. Anyone working on it full time could double it quite quickly, I think. (I'm working on some other projects.) At that level, how should I go about selling it?

if it is truly passive why in the hell would you want to sell it?

There's passive(stock dividends) and passive(almost no ongoing maintenance), those are two entirely different things, one doesn't require any thought, one does.

Re: Ask HN: Does my company with $140,000 annual revenue have any value?

#18

Post by weaksauce »

honopu wrote: post #17
genericbusiness wrote: post #13

While we're discussing this: I've written some software that generates approximately $200k/year in passive income (and growing), with almost no ongoing maintenance or support required. Anyone working on it full time could double it quite quickly, I think. (I'm working on some other projects.) At that level, how should I go about selling it?

if it is truly passive why in the hell would you want to sell it? There's passive(stock dividends) and passive(almost no ongoing maintenance), those are two entirely different things, one doesn't require any thought, one does.

The reason for selling businesses that are passive income is threefold from my point of view:

1. Without maintaining the website/business you run the risk of being overtaken by a newcomer and lose your passive income.

2. Even passive businesses take some amount of work. For example you need to file your paperwork / sales tax / taxes / everything else related to the boring side of things. Even if you have people to do those things you still need to talk to them to make sure it is getting done.

3. If you want to turn that 200k income stream into some other business with more potential you can get 200k * X where X is the multiplier that you get for selling now. you can then take the 200k * X and invest that into some new thing.

Re: Ask HN: Does my company with $140,000 annual revenue have any value?

#19

Post by honopu »

weaksauce wrote: post #18
honopu wrote: post #17

Earlier quoted context omitted.

if it is truly passive why in the hell would you want to sell it? There's passive(stock dividends) and passive(almost no ongoing maintenance), those are two entirely different things, one doesn't require any thought, one does.

The reason for selling businesses that are passive income is threefold from my point of view: 1. Without maintaining the website/business you run the risk of being overtaken by a newcomer and lose your passive income. 2. Even passive businesses take some amount of work. For example you need to file your paperwork / sales tax / taxes / everything else related to the boring side of things. Even if you have people to do…

Yeah I totally understand what you are saying.

1.) Definitely. This will be a slow burn unless someone wants to blow you out of the water and totally undercut you in every way/shape/form.

2.) You are right. That was the idea of my comment, there probably isn't such a thing as passive income without buying an object(not asset) that pays a royalty/dividend, I just thought you were using the word in a way in which it isn't intended.

3.) Totally, i think you need to build the support systems around the business. People will want to buy a money machine, not a hassle. Having as much of that handled before you go to sell it will make it at least at first glance a way better investment. if they are looking at buying a business, aside from them being a competitor, they are basically saying, "You know, I don't trust TNK, and i'm really tired of buying stocks, maybe i'll sink some money here" then they look at your recipe for making money and decide if they want to buy the whole lot.

I just think if you are making 200k you can probably find someone that would be happy as hell to manage most of it and you dabble in it a few hours per week. So mathwise (rounding a week to 50) 4k a week..you can certainly find someone that wants to take some equity and try to build upon that, figure out some sort of metrics for gain aside from salary handled things(what you don't ever want to see, q/a etc) and go from there.

Re: Ask HN: Does my company with $140,000 annual revenue have any value?

#20

Post by slay2k »

You realize there are highly skilled, entrepreneurial people willing to work for $100-200/hr, right ? Especially part time.

I'm your inverse in the sense that I'm done w/ grad school and now doing freelancing/consulting to fund my own web-based projects.

Hell, go get your degree and I'll grow your business while you're gone, all the while kicking back 20-25% of consulting income. So you'll make a passive $60k+ a year while continuing to own your operation. And I won't have to spend time looking for clients.

Trust is a real issue, of course, but there are genuine hard-working people out there. If you want to talk more, my email's in my profile.

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