Keep it; a decent income would've made grad school significantly less painful. 500 hours a year is not a full time job; I think your odds of selling it at the price it's worth to you are very low.
Ask HN: Does my company with $140,000 annual revenue have any value?
21–30 of 41 posts
Re: Ask HN: Does my company with $140,000 annual revenue have any value?
#22While 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.
Better read the fine print really good, business brokers worth their money are very hard to find and it's easy to get locked in with some shyster that will bank on you selling your business eventually and him pocketing a part of the sale. They're worse than real estate agents.
Re: Ask HN: Does my company with $140,000 annual revenue have any value?
#23Earlier quoted context omitted.
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 is…
Good additional points. I do want to say that I am not the original poster. I was speaking from the benefits I would see if I was in that situation.
Re: Ask HN: Does my company with $140,000 annual revenue have any value?
#24While 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.
I've looked through 'bizbuysell.com' a bit, there are lots of real businesses there but also quite a few that look like the online equivalent of 'pump-and-dump'. If you go there as a buyer looking for an online business better do your homework real well.
Re: Ask HN: Does my company with $140,000 annual revenue have any value?
#25There surely is value in the business there. One basic formula for business valuation is 110% of annual gross revenue + the value of any hard assets.
The recurring license revenue is nice. The billable hours are a little difficult to value though since they are very dependent on you skill set. If you are doing something fairly unique, and the buyer can't be trained easily or successfully than it might be hard to honestly justify that revenue when negotiating a business value and price.
What are you marketing and advertising costs now? If you say "basically zero" then you might have a lot of untapped potential value.
Since you are not interested in running a business and hiring people, I'd suggest selling now. It'll take a few months to find a buyer and a few months to close a deal so might as well start now.
To paraphrase Warren Buffet "no one ever lost any money by taking a profit".
On the other hand, $2k per month of passive income while in grad school is a great way to live and study and work without a lot of added stress.
I wouldn't take less than $125k for it, cash (don't carry a note for the buyer). And offer the buyer 40-80 hours of training over the first 2 months.
Re: Ask HN: Does my company with $140,000 annual revenue have any value?
#26There surely is value in the business there. One basic formula for business valuation is 110% of annual gross revenue + the value of any hard assets. The recurring license revenue is nice. The billable hours are a little difficult to value though since they are very dependent on you skill set. If you are doing something fairly unique, and the buyer can't be trained easily or successfully than it might be hard to hone…
Marketing costs are around $350/month for some simple BuySellAds spots.
I think the ideal purchaser would be a web development company or enterprising web developer (PHP programmer with frontend skills too) who is willing to pay ~$100,000 up front for a growing and proven business, the client leads, etc. However, I'm not sure if this is possible to find.
Re: Ask HN: Does my company with $140,000 annual revenue have any value?
#27Hire an intern, teach them how to do the tech support, collect a check. I think you'd be foolish to get rid of it.
I'd happily support it for you and pass on a cut of the earnings. ;)
Re: Ask HN: Does my company with $140,000 annual revenue have any value?
#28There surely is value in the business there. One basic formula for business valuation is 110% of annual gross revenue + the value of any hard assets. The recurring license revenue is nice. The billable hours are a little difficult to value though since they are very dependent on you skill set. If you are doing something fairly unique, and the buyer can't be trained easily or successfully than it might be hard to hone…
Marketing costs are around $350/month for some simple BuySellAds spots. I think the ideal purchaser would be a web development company or enterprising web developer (PHP programmer with frontend skills too) who is willing to pay ~$100,000 up front for a growing and proven business, the client leads, etc. However, I'm not sure if this is possible to find.
I think a buyer will be findable. Not easy but surely one or more are out there.
You have enough business savvy to find customers, use the same savvy to find buyers.
Re: Ask HN: Does my company with $140,000 annual revenue have any value?
#29There surely is value in the business there. One basic formula for business valuation is 110% of annual gross revenue + the value of any hard assets. The recurring license revenue is nice. The billable hours are a little difficult to value though since they are very dependent on you skill set. If you are doing something fairly unique, and the buyer can't be trained easily or successfully than it might be hard to hone…
Marketing costs are around $350/month for some simple BuySellAds spots. I think the ideal purchaser would be a web development company or enterprising web developer (PHP programmer with frontend skills too) who is willing to pay ~$100,000 up front for a growing and proven business, the client leads, etc. However, I'm not sure if this is possible to find.
whats the language/platform of the software? how many customers/users are there currently?
Re: Ask HN: Does my company with $140,000 annual revenue have any value?
#30Earlier quoted context omitted.
Marketing costs are around $350/month for some simple BuySellAds spots. I think the ideal purchaser would be a web development company or enterprising web developer (PHP programmer with frontend skills too) who is willing to pay ~$100,000 up front for a growing and proven business, the client leads, etc. However, I'm not sure if this is possible to find.
whats the language/platform of the software? how many customers/users are there currently?
PHP. ~200 active clients.