Imagine a world where you could sell a business you’ve poured your heart and soul into for a staggering 60 times its monthly profit â that’s what we achieved with a recent hybrid business listing.
đ„ Selling your business for 60x monthly profit?! đ€Ż That’s not a typo, it’s real!
We just sold a hybrid business (online & brick and mortar) for a mind-blowing multiple. Want to know how?
Check out the story and learn how you can make this happen for your business!
It wasn’t a walk in the park but the rewards were absolutely worth the effort.
Navigating the Hybrid Business Landscape
This particular business wasn’t just your typical online shop â it was a hybrid a blend of the digital and the physical.
They had an online store a physical location and even their own printing facility.
This was a first for our team pushing us to the edge of our expertise.
The Challenges of Hybrid Businesses
The very first challenge was evaluating the business.
How do you value a business with both an online and offline presence? The first question that popped up was: “Can this business be moved?” The sellers who were leasing a 1300 square foot shop weren’t sure if they could just pack up and move the equipment to a buyer’s home.
It was a bit too big for that!
This led to a lot of brainstorming.
đ„ Selling your business for 60x monthly profit?! đ€Ż That’s not a typo, it’s real!
We just sold a hybrid business (online & brick and mortar) for a mind-blowing multiple. Want to know how?
Check out the story and learn how you can make this happen for your business!
Could we offer the business as a fully remote operation? The sellers had two employees who could potentially manage the printing and fulfillment even without the buyer being physically present.
That sounded like a great solution as it would avoid the costs and hassle of relocating the equipment.
Untangling the Finances
Financial analysis was another hurdle.
We needed a comprehensive P&L statement that reflected the business’s true financial picture.
The sellers only had a yearly balance sheet from their CPA â not exactly the level of detail we needed.
We needed to figure out the profitability of their online business and their physical location.
The sellers were willing to work with us and we managed to get the P&L statements sorted out.
But then came the big surprise: the sellers decided to hold off on listing! They realized that their busy season was just around the corner and they wanted to maximize their profits before selling.
The Art of Timing in Business Sales
When it comes to selling a business timing is everything! Sellers have two primary options:
Option 1: Sell Before Peak Season: This could be advantageous as buyers are aware of the upcoming busy season and are more willing to pay a premium to capitalize on the increased revenue.
Option 2: Sell After Peak Season: If you have a reason to believe that your current year will significantly outpace the previous year selling after peak season can boost your trailing twelve months (TTM) profit and ultimately your sales multiple.
Our sellers chose option two.
They waited until their fourth quarter numbers came in allowing us to present a much more attractive financial picture to potential buyers.
The Journey to a 60x Sales Multiple
Once the sellers were ready we listed their business for $1487191 â that’s a 25x sales multiple based on their average monthly net profit.
Navigating Buyer Concerns
Within weeks we had 33 verified buyers interested.
But the buyers had concerns about the physical location and the printing equipment.
They were worried about the costs of either keeping the equipment in its current location or moving it.
We also had to address their questions about the sellers’ marketing efforts both on and off Amazon.
This is where seller interviews become crucial.
They offer a deeper understanding of the business and the seller leading to more confident offers and faster sales.
The Offer and the Earnout
In the end an investment company who had been looking for the perfect business for over a year made an offer of $1784630 in cash upfront followed by a performance-based earnout.
This meant that the sellers would receive 33% of the profits above a predetermined baseline for five years or until an additional $1784630 had been paid.
This structure pushed the sales multiple to a staggering 60x a life-changing outcome for the sellers!
đ„ Selling your business for 60x monthly profit?! đ€Ż That’s not a typo, it’s real!
We just sold a hybrid business (online & brick and mortar) for a mind-blowing multiple. Want to know how?
Check out the story and learn how you can make this happen for your business!
Understanding the Market Shift
What made this sale so successful? It wasn’t just our team’s expertise â it was also the perfect storm of market trends.
The pandemic had a dramatic impact on online business.
Initial uncertainty gave way to a surge in online shopping leading to a boom in business for many online sellers.
This surge caught the attention of investors eager to capitalize on the growth potential.
Our marketplace saw a massive influx of verified funds as buyers were desperate to find businesses with strong growth prospects.
The average sale price in 2020 was 73% higher than 2019 and 131% higher than 2018!
The Season of the Seller
We’re truly in the Season of the Seller.
The market is hot and businesses are selling faster and for higher prices than ever before.
If you’re thinking about selling your business now is a fantastic time to start planning your exit!
Taking the Next Step
It’s time to start thinking about your own exit strategy.
Whether you’re ready to take the plunge or just curious about the value of your business our team is here to help.
You can schedule a call with one of our business advisors to get a personalized assessment of your business and guidance on navigating the sale process.
Don’t wait â the market is ripe with opportunity and your dream exit could be just around the corner!