How do we value an online business whether it’s just an idea in our heads or it’s our business and we want to sell it, and how much should we price it? Or if we are thinking about buying an online business, how do we value the business we are considering buying?
Online Business Evaluation From Idea to Sale for Buyers, Sellers, and Entrepreneurs
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I thought to do this after a family member who, to my knowledge, has not done a whole lot in business online, and had found a business that’s for sale that looked interesting and asked, “Jerry, what do you think of this? Here are the financials, here’s the business model, here’s the price.”
I looked at it really quick and I said that the price is at least twice as much as it’s worth paying for it. There is no way you would want to pay more than 50% of what they have asked for based on my briefest look at this. Even if you were to pay that, you would want to ask these following 10 or 15 questions before you even considered buying it.
I’ve got this experience by doing business online since 2011 myself, which is over seven years now, and by helping many people build, start, and grow their businesses online.
I appreciate the chance to share this with you and if at this point you think, “Oh, God, I’m too lazy. I can’t do this myself.”
I’ve got a gig up on Fiverr and I will do it for you. You can just order my gig, send me what you have got and I will produce an online business appraisal for you.
If you have just got an idea at the Basic level, the Standard, if you are thinking about selling or you just want a value, and I’ve got a Premium level where if you are considering buying a business, you pay me and give me everything you have got, I will give you how much I think it’s worth.
I might be able to save you tens of thousands of dollars or more potentially buying a business that’s no good for you.
So, let’s go over and take a look at the thing I think that is most critical for valuing a business, and this is not going to be any kind of surprise here.
It is, of course, the financials. However, I will immediately give you something that is useful when it comes to valuing the financials. A lot of us get quickly excited about “Profit and Loss.”
First, it’s clear to be specific on our terms.
So, “income” for a business or “revenue” is the raw amount of money the business made. That does not count “expenses.”
The number we need is “profit” for the actual amount we are interested in buying the business for.
Let’s use my numbers for 2018.
My business had $236,000 in income.
Thank you for all that you have done to help with that and these are the expenses.
$75,000 in advertising, $22,000 in contract labor being some of the highest.
Then, $118,000 that’s profit.
Now, that’s pre-tax profit or “Net income.”
The IRS, Internal Revenue Service, in the USA gets thirty plus percent of that.
So this is essentially my salary.
If a company was to hire me, this effectively is my salary.
Now, this is with me running a business that I’ve had online for seven years now. This means, the first key consideration for valuing a business is, who is the income most closely related to? Are there customer relationships with the owner or with certain employees at the business?
Now, if you were considering buying my business, the first key thing would be the income is mostly, but not all, related to me. What these numbers don’t tell you is, how that $236,000 actually came in?
Did that come in from me having one client that paid $236,000?
Did it come from ad revenue?
You need to know exactly where the income comes in, in order to even consider possibly thinking about it. You need to see all the income sources.
When you see where all those income sources are, then you are able to start considering whether the income, expenses and profit, or net income, are relevant for consideration.
For example, if you are considering buying my business, it is not for sale, but if you were considering buying it as a hypothetical example, the primary consideration you would have to make would be, how I would fit into the business after you had bought it, and would the business be worth buying if I was not involved?
While there is a net income of approximately $10,000 a month in profit, if you needed to hire me ten thousand a month to continue running my own business, then you would make nothing buying the business at least in the short term.
This gets us to the key point, if you are thinking about selling a business, the key thing you want to do is to be able to say why you are selling the business. This is something buyers always ask and if you are thinking, if you have just got an idea right now, I’m showing you what it looks like down the road so you can plan better because when I started my business, I was utterly clueless about this stuff and I realized others are probably the same.
The reason you want to sell a business is something almost every buyer wants to know. For example, if I wanted to sell my business, why am I selling it?
Do I desperately need money and I just want to get someone to essentially buy my business, and then have to pay me to keep running it so that I can just make more money?
Do I want to sell my business because I imagine someone else can make more money with it?
In my opinion, that’s the best reason to sell a business and that’s the best reason to buy a business because selling the business will increase the potential profit of the business in total.
Now, if someone is selling a business just to get rid of it and just to turn it into money, that to me is not a good sign. I don’t want to sell my business because I see more potential in it than anyone who is likely to buy it would see in it.
I would not sell you my business for $500,000 right now. Even though the profit looks like $10,000 a month, I wouldn’t sell it for $500,000 because I can see the potential for millions of dollars of earnings with my business.
If you have got a business owner who has lost the vision for the business and is not very excited about it, do you want to buy something that’s on the way down?
With showing you my yearly financials, it does not show you my monthly financials. When looking at the monthly financials, you can look for trends. The financials I just looked at for another business, it looked like it had a strong start and was trending down.
That is bad.
If you are going to buy a business, the ideal income is steady consistent growth.
You want steady consistent growth in a business because anything else is not worth buying unless you can somehow magically fix it up.
Therefore, it’s very important to consider in buying a business or potentially selling it, the cost to improve it. If you are thinking about selling your business, how easy will it be for a buyer to improve what you are already doing?
For what I can see in my own business, it would be very difficult for someone buying my business to improve on it because you would need to learn all the stuff I already know about my business and you would have to be able to somehow fit it into your existing system and do it better, which is possible, but you are looking at that taking a lot of work.
Another big consideration is, how much time does the business take?
Let’s do a little calculator and I can show you how much I earned per hour in my business. I worked approximately 40 hours a week on average in my business 52 weeks.
That’s about 2,080 hours I worked in 2018.
Now, while the $118,000 profit does look good, if we divide the hours I worked by $118,890…
Now, technically I did earn significantly more than this off capital gains, but for simplicity, we will just stick with my business income.
I earned on average $57 dollars an hour in my business, which is really good because that’s doing work that I’ve loved and had fun with, and then I’ve decided what I’ve done all year, which is really cool.
Therefore, on average I’ve earned $57 dollars an hour.
Now realistically there were things I did that cost me money that if I wouldn’t have done them I would have made more money, and there were other things I did, I earned thousands of dollars per actual hour of work I did.
That’s the 80/20 rule in action.
But this number is critical in calculating your own investment because let’s say you were to buy my business, and then you would need to calculate how much of your time and energy you would need to put into the business in order to grow it.
That’s your real cost.
For example, if you were looking to buy my business and you wanted to pay for it, in addition to how much you paid you would need to calculate how many hours, what I need to put into this or would my employees need to put in it, or people I would bring into it need to invest in terms of time to get this business growing.
With the family member’s business I just looked at, I estimated you would need hundreds of hours just to keep the business on par, and it would take years just to break even on the initial price offered, let alone to actually grow that thing.
Now, if you are considering selling a business, you need to think of these things from the buyer’s point of view because obviously a buyer wants to buy something with as little work possible. That means, ideally the buyer would just like to buy something and have the profit keep coming in.
If you are trying to sell a business, you are going to need to demonstrate what exactly it takes to bring the income in because from your point of view as a seller, it might be really easy.
“Well, you just click these few buttons, you just have this distributor in China send this over to Amazon, and then Amazon…”
Well, that might seem easy to you because you do it, but what about someone who is buying it?
How much does the buyer know about whatever is being bought?
It can take hours and hours to learn things like, if you have got some kind of drop shipping business. I don’t know anything about drop shipping. I would need to calculate my time. Let’s say realistically if I bought a business, let’s just use my dollar per hour rate.
Let’s say realistically if I was going to learn some brand new kind business, it would take at least a hundred hours. That’s conservative to learn something brand new.
Therefore, tack on 5,700 extra dollars in time I won’t be able to spend doing whatever else I do. If you are considering buying a business, it is very relevant to consider how much of your time it’s going to take.
It’s so easy to just try to look at a business and the seller says, “Oh, it only takes a few hours a week.”
What about when something goes wrong? How much does it take when customers get aggravated or return something? How much time does it take when you get a payment dispute? How much time does it take when the drop shipping doesn’t come through correctly? How much time does it take when things go well and your existing systems break?
All these things need to be considered because you can make a very bad deal either way on that.
Obviously, if you want to do a business, you need to plan your own time into it. What are you not going to be able to do because you are fooling around with that business you just bought?
This is why, if you are considering selling a business, you need to be prepared to answer a ridiculous amount of questions, and to preferably have a smart buyer for your business because you want your business to be successful when you sell it.
Online businesses tend to be a little more complicated in terms of buying.
I will show you my website over here.
If you go look at my website and you looked at my income, it might not be obvious at all where my money comes in from.
While online businesses might seem simple on the surface, if all the little systems don’t go together, if one little thing breaks, it can all become worthless if you can’t fix it.
If you look through my website, you might ask, “Where does this guy’s money come in from?”
See, just from looking at the business, it’s not obvious right away how all this adds up to $236,000 because you don’t know how much of it is books? How much of it is services? How much of it is affiliate marketing? How much of it is podcast income? How much is a membership program? How much of it is music royalties? How much of it is donations from video gaming? How much of it is minutes watched on Skillshare?
If you are considering selling or buying a business, all of these aspects are very important to consider. You want to be able to show exactly where your money comes in. When you are freelancing online, you probably don’t want to plan on ever selling your business because it’s so personal that, who is going to be able to buy it?
At the same time, if you make a business that’s impersonal, it can be difficult to get the same kind of traction as you end up pivoting a bunch of different times.
Therefore, if you have got a business idea, it’s important to think to begin whether you want flexibility or whether you want the ability to sell. Having your own brand under your own name allows you to work consistently over time and allows you to fail consistently and still stay alive.
If you look at all the things I’ve done, I have an absolute wreck of failures all over online, things I tried to start, services I tried to offer, business models I tried to run, and yet all of these failures just snowball and keep making my entire business bigger.
If you look at my blog, it has hundreds of articles on it. Many of the articles for things I don’t even do anymore. There are all kinds of these music production articles. All kinds of tutorials and things on crypto before that now I don’t do much with, and all of it helps snowball my whole business.
But it would be very difficult probably for me, not necessarily, but it could be difficult to sell a business that’s so personal.
Therefore, if you are just starting out online, and you don’t really know what you want to do, trying to make a business plan and force it into one particular angle may guarantee failure, and if you do like me, I started out, I put in a bunch of different individual business plans.
I remember my initial business plan where we spent all this time writing a business plan and got rejected. It didn’t get accepted from the business plan competition I did, then just a few months later I wasn’t even doing the business plan. I had totally changed to something else.
I highly encourage if you are fairly new and you have just got a lot of ideas brand everything under yourself and focus your business on just making a very personal business. Don’t even think about or plan to sell your business.
As you can see, if you are new and you have just got an idea, all the things I’ve talked about selling should be dissuading you from trying to make a business that is based around you, and then considering selling it.
Tomas George, on his business, he started off doing just Tomas George, but now he has made “Digital Music Masters” which is something Tomas could easily sell.
He started off just branding everything as himself, then when he was established as himself, as a teacher online with a self-sustaining business all under his name, then he branched out and put everything under “Digital Music Masters” and this gives him an umbrella to start incorporating other people in.
Therefore, for online businesses, it often can be very advantageous to just start out under your own name as Tomas did, and now he has got hundreds of thousands of subscribers and followers, or something like that adding up all of his different students on all his different platforms.
Now, he has got his own music, and then he has got a six-week training that is on “Digital Music Masters.”
What’s nice about “Digital Music Masters” is Tomas is replaceable as a part of “Digital Music Masters.”
So, for Tomas’ business, you wouldn’t want to sell something like tomasgeorge.com, but as Tomas builds Digital Music Masters up, this is something that could be sold and the talent could be rotated in with it.
For example, another music production and education company could buy Digital Music Masters to help bring more people into them and get Tomas’ customer list and put their own employees if desired right into Tomas’ existing program.
This I think is the ideal way if you have got an idea, you just start out online as your own name, build it up, then when you have got something rock-solid, when you know like Tomas knows he is doing music education indefinitely, then you are ready to do something like offer a digitalmusicmasters.com website with its own training programs. Then you can put in all those very personal things into something that then could be sold if desired.
I don’t hear that Tomas has any plans or interest in selling this, but in my opinion, this is a good way to do it. Then, if you were interested in buying “Digital Music Masters,” the key thing I addressed up front is that you would be able to see that you could put whoever you wanted into it. The talent could be rotated in and out.
Therefore, for having a business, you need to consider very carefully from the beginning and going forward, what personnel are going to run the business. The people involved in the business are one of the most critical parts, which is why buying a business is such a huge risk.
Substituting the people in a business sometimes can be challenging, other times it can be very easy. If you have built a business like mine, substituting a different person into it might be difficult because it’s so personal. What we can do as a buyer is research the personnel aspect as thoroughly as possible.
In the family member’s business I was asking about, it’s not clear where these orders came from. Therefore, for buying a business, you want to know very carefully the traffic sources.
I can tell you, for example, that about 2,000 people a day come to my website, but where do they come from?
Do they come from Google organic search where if I sell the website the links will still stay in place on Google organic search?
For my website, the largest single traffic sources are Google organic search and YouTube, which means that I have control over about 50% of the traffic that comes to my website and the other 50% if I sold it, would keep coming to the website anyway.
When you are considering buying a business, you need to know exactly where all the customers are coming from and where all the traffic is coming from. If you don’t know that, you are putting yourself out in the wide open in terms of whether the business has any true value.
If I go back to my income spreadsheet here and we look at this, now, the income on my business is very highly related to where all my traffic comes from and let’s say I put jerrybanfield.com up for sale, you would need to know exactly where all the traffic came from on my website and how all that income came in. A lot of that income came in from YouTube straight to another source. It didn’t even go through my website.
So unless I was selling you my YouTube channel, unless I was selling you every other asset that produced that income, you would not be buying all the assets with it. Therefore, it’s very important to be clear upfront, what exactly are you buying?
Are you buying a website? Are you buying a social media account? Are you buying a website, a social media account, a stripe account, a drop selling account? What exactly are you buying?
Therefore, as the seller, it’s very important to communicate what exactly you are selling. I sold one of my company websites I did for $5,000 before, and even though I put it extremely clearly on the auction, “this is not for any of my social media accounts,” the buyer still wanted my social media accounts.
I said I wrote it absolutely clearly in the auction, this is only for the website, it is not for any of the social media accounts. Honestly, that buyer did not get a great deal because what did I do?
I sold the website and as soon as I sold the website I stopped sending any traffic there on all my social media accounts as far as I could.
Many of my videos, and I pointed this out to the buyer, had the website and the email in the video. I couldn’t change them, but everything I could change, I changed it over to jerrybanfield.com.
When you are buying a business or potentially selling a business, you need to make it clear how all of these things work together with your business online. If you do everything personally, it can be very good for long term, but it can also make it difficult if you want to sell because, for example, with Tomas on “Digital Music Masters,” all of his Facebook and YouTube is all geared towards him.
So, if he was likely to sell the “Digital Music Masters” website, he wouldn’t want to sell his YouTube channel with it or his Facebook or his courses on Udemy with it. He wouldn’t want to sell all those things with it or if he did, the price would end up being a lot higher.
You have got to consider all these different aspects or you really could be throwing your money away buying a business online.
Now, if we consider all of these different aspects, I hope this is helpful for valuing a business online.
Basically, if you are going to sell something, you need to be ready to communicate exactly how all the value is created. You need to be ready to honestly present all these things and be ready to give the buyer a good deal.
The only good reason to sell is because you imagine a buyer can do better with it than you can. For example, let’s say I was just tired of doing my business and I wasn’t looking to produce anything new, it might be good for me to sell then because I would imagine a buyer could do something really good with my business.
I could say, “Look, I’ll sell you my business. I want to go off and do something new. I’m tired of making videos or podcast episodes or whatever. I just want to go lay around all day or whatever and not do anything. You could do much better with my business than I’ll do with it just not doing anything with it.”
Therefore, if you have got a business and you imagine a buyer could do a great job with it, you also need to make it clear to the buyer what needs to be done in order to make a great job of it, especially online because there are not as many things to put your hands on.
With the physical business, you have got a lot of things you can actually put your hands on. Maybe a storefront, maybe books, maybe devices that have things on it.
With online, you really got to work on the communication aspect of it.
Therefore, I recommend if you want to sell anything, make videos online and communicate very clearly, show the inside of your business in as much detail as possible. Ideally, show every single thing you do in the business.
Go through maybe a whole day in your business.
“Here’s what I do. Here’s me handling this customer. Here’s me with a drop shipping thing I’m doing. Here’s me responding on social media.”
Give the potential buyer as many possible tips as you can for exactly how to run the business. You want to make it super easy to run your business. I’m imagining what a nightmare this would be for my business because I have so many different things in my business.
For me to consider selling this to someone, there are so many different accounts related to it.
If I was to sell my business, to make it a good sale, I would need to sell my Facebook, YouTube, Twitter and Twitch accounts. I would need to get my podcasting account, my Skillshare account, my WordPress website and the domain.
Then, I would need my music account or it would have to be transferred, my Kindle, my Amazon account, which is the one I also use to buy stuff on personally, I didn’t make it business.
Do you see what a disaster, how much of a pain that potentially would be to try to present all that to a buyer?
You can see how I would need to do a really good job explaining, “Okay. Buyer, here’s what you could do with this. I’ve got all this organic traffic. You could put links to your website on here. You could put your video courses on here. You could put, etcetera.”
I would need, as a seller, to make it very clear to the buyer what all they would need to take control of and what I would recommend they do with it in order to get the most out of it.
If you have got a seller, if you are thinking about buying and you have got a seller that’s not very interested in going through all these details with you, that’s a bad sign.
You don’t want it.
“Okay, Jerry. You’ve talked a lot about this, but you haven’t mentioned price yet.”
Let’s go back to price.
I am shocked I didn’t mention this up front. I’ve talked so much about these other things because you really need to get into all this information before you even think about the price.
The price varies greatly based on all this other information.
Now, for looking at this, do not use some stupid simple formula like you get recommendations to just say, “Well, just multiply your profit for this number of months.”
So, for example, for how much would I sell my business for?
That depends on how much I’m willing to do and what I’m willing to contribute, and how easy or difficult it is for the buyer.
Therefore, what I would price my business at would be highly dependent on who bought it and also be highly dependent on how much I was willing to give in help.
Let’s say I was willing to go all-in.
Let’s say I just wanted to stop everything, completely cash out as much as possible, help a buyer to make the absolute most of it. Basically, give the buyer the chance to put all my traffic. That might be great and a buyer could buy my whole business.
You could put educational videos and sell courses on my YouTube channel. Again, a lot of people will unsubscribe, but you would have the organic ranking, you would be able to do it.
Therefore, at a minimum, how much would I price my business for would be based on the exact income sources?
I’ve got about somewhere around five thousand a month that comes in automatically on my business. That means YouTube ad revenue, that means podcasts, that means Skillshare referrals, that means all the stuff on my business that comes in whether I do anything or not.
That amount of money is extremely relevant to the price because a lot of the rest of the income in my business is what I would call active income.
That’s serving clients, that’s making new videos that then sell things, that’s having a membership group where I need to show up.
Therefore, even though my business profit is a hundred and eighteen thousand, the actual income that’s relevant for calculating the value of it, is only about five thousand a month that is in passive income.
That means if you bought it, you would continue getting that income in simply by controlling my accounts, by having my YouTube account, by having all my payment accounts, you would get about five thousand dollars a month automatically without doing anything.
Therefore, the minimum price for my business would probably be at least $50,000. That will be the absolute minimum.
Now, you might think that’s a crime. You might say, “Oh, my God, Jerry. Really? A business with two thousand visitors a month with millions of impressions on YouTube?”
I would say the minimum price for my business is no lower than $50,000 because that would be, if I didn’t do anything at all, if I just handed you account logins, didn’t help with it, you would lose almost all the active income from the business, and you would lose any new future income from things like new podcast episodes.
You would basically have to keep creating content yourself to grow the income and a lot of businesses are sold this way where they are doing a little more than turning over the control: “Here are my accounts. You do whatever with it you want to.”
I would not buy my business if I just wanted the income out of it. If all I wanted was the income, I would not pay more than $50,000 for my business because if you didn’t do anything else with it, the income would keep going. You would probably make a hundred thousand dollars in profit just by having the accounts and not doing anything over time.
However, you have got to calculate the time it takes to get back to the amount you paid. Let’s say you paid $50,000 for my business and it produced $5,000 a month and continued producing that let’s say for 20 months, and there was some dwindling from me not uploading anything new, from videos getting old, from people realizing I’m not contributing anything anymore and just stopping following.
Therefore, let’s say over the next two years, you would make about a hundred thousand dollars, and then the business will kind of taper off.
Well, it takes you ten months to actually break even.
Do you see what I’m saying?
It would take you ten months.
So, let’s say you gave me $50,000 for my business and all I did was give you the account signings and you wanted to do nothing else with it. I would say $50,000 would be a good price because you would simply take control of the accounts and cash the money out of them, that’s all you would do.
In two years you would make about $50,000 in profit meanwhile and I would have about $50,000 up front. The reason for this price is that you would have to put $50,000 upfront, which means for ten months or maybe a year, you would not even get your money back that you would put in.
It would take you about two years to actually double your return on investment.
Now, that’s the scenario of a completely just lame sale in my opinion. I just want to cash out of my business and a lame buyer just wants to buy it and do nothing more than clean up the money.
That is what happens in probably a lot of business sales.
You can see the selling and buying environment is very critical to the valuation.
Now, let’s take a different picture.
Let’s say there is a buyer who wants to buy my business because they love what I’m doing, and want to promote me to their network.
They want me to keep contributing and are willing to pay me to keep contributing, and want me to funnel traffic upwards to their business because the buyer sees that if Jerry will create under our creative umbrella and funnel people up to us, we can help him monetize what he is doing better, we can all collectively make much more money working together.
Now, that scenario is what I would call an ideal buying environment.
In that scenario, everything needs to be valued differently because at this point the buyer is looking around my business and saying, how can we integrate all of this into what we are already doing?
How can we keep Jerry already working?
Let’s say my reason for selling the business is that I want some more stability, that I don’t like having months where I make five thousand dollars in income and I spend ten thousand, so I’ve lost five thousand dollars that month running my business.
Other months, I’ve had months where I’ve made $90,000 in one month, then I just have been paying off all kinds of bills, and then I have a massive tax bill that messes up the rest of my accounting for the whole year.
Let’s say, all right, I’ve got two kids now.
My reason for selling the business is I want stability, that I intend to continue creating indefinitely and I want stability. I just want a $10,000 a month paycheck, to know it’s coming every month, to know my bills are getting paid every month.
Let’s say that’s my reason for selling my business, that I love creating and I’m going to continue creating and I will keep creating at the level I’m creating now, but I would just like to do it within an umbrella of peace of mind, security, a regular paycheck without worrying about how much income the business makes and to let a buyer make more money off of it than I’m making.
Now that creates a completely different look at the numbers. A buyer might look at those numbers and consider the expenses that they are likely to have to pay me, but in this instance, the buyer can look at “up-conversion.”
I totally just made that up right now.
I just made that up, but “up-conversion” is that the buyer could put what is in my system into perhaps a better system. Let’s say a buyer has some kind of funnel system where they can start selling my courses if I will consistently make some content for it.
Now all of a sudden, my income and my following starts to look really attractive. The existing income I’ve got from the buyer’s point of view is a fraction of the total I’m worth and since the buyer is looking at continuing to pay me as an expense, that from this point of view would wipe out the complete income, but then also is looking that all the income I’m currently making is going to go to them, and they are going to make a lot more than I’m currently buying.
In that instance, the business might easily be worth a quarter of a million dollars because that would be a fraction of what the buyer would get out of the total, and that would be a couple of years net income. But the net income, the buyer would not have to do a whole lot to get the net income. The buyer would have me as an employee restructuring things.
Let’s say the buyer was a big online education company and they have got a monthly subscription service. They are imagining that with me starting to teach courses in their subscription service, me promoting that on social media, me promoting that on my podcast, that with me in their system, they can easily start making relatively quickly an extra ten plus thousand dollars a month, have people in the rest of their system, have greater awareness for their brand and have me continuing to create and continuing to snowball, plus they have all of my existing earnings before that.
I could simply take my time out of serving clients, close down a few things and focus more on, for example, answering questions for the buyer.
In this case, the buyer might find it really well worth it to pay me $250,000 plus have me as an employee, and then within a few years the buyer is making millions of dollars more as a result of working with me.
Me having brought in overtime tens of thousands of new subscribers, new students and funneling all of my organic traffic, for example, my email list, my YouTube, funneling everyone into their bigger system where they have a lot more money, opportunities with the people following me now than I actually do.
Now, in that case, a value of $250,000 would be appropriate.
The buyer comes and says, “Look, Jerry, you’ve got a really halfway done setup. We can give you luxury set up. We can do a really good job with your business. We can turn your business into a lot more profit. And look, we’ll give you money. We’re going to buy your business. We’re going to own all of your accounts and we’re going to give you a regular paycheck, and you’re going to send everyone to us. No more doing affiliate systems for anyone else. You’re going to close down all the parts of your business that don’t funnel into our system and keep people focused on just coming into our system.”
I would imagine that would be a really good deal for everyone involved because then Jerry Banfield is essentially just a spokesperson for a bigger brand while that helps the bigger brand, it fits into the big picture. This is how a lot of brands pay a fortune for celebrities just to advertise for them because then everyone following that celebrity ends up buying their brand.
For example, Air Jordans. Michael Jordan doesn’t actually make shoes as far as I know. Michael Jordan has sold a whole lot of shoes I imagine. That is the same idea here. Therefore, you can see a huge difference in the potential value of a business.
The exact same business worth $50,000 I would say at a minimum, if no one is going to hardly do anything with it versus easily worth five times as much depending purely on the buyer.
I think I’ve really beat this one to death by now.
I’ve tried to cover all of these things in my mind. I tried to cover all of these key points for you because I know this is challenging. There are not a lot of good resources out there. People are just working, shooting completely in the dark with limited information trying to awkwardly transact businesses and oftentimes everyone is losing.
The seller is not having a great experience selling a business they could have made more money with. The buyer is doing a poor job buying a business that they could have done better with.
I hope this helps you see whether you are in the idea phase where you are looking to potentially selling a business or whether you are thinking about selling your business or whether you are thinking about buying one to put it in the context where you can really do the most.
I’m not interested in selling my business. I love my business and I see fantastic potential with my business and it’s fun this way. It might take the fun out of my business to have a regular paycheck and it might take the edge off a lot of my content to know that I was just getting paid whatever I did.
It’s fun to me. It’s a challenge. It’s cool just to have that total freedom to do whatever I want.
I’m here to help you if you would like some help valuing a business online. These are things I’m willing to consider on your behalf. If you have looked at this and said, “Dude, this is way too much.”
Then, I think this gig might help you out whether you are in the idea phase to just get a quick review. I’ve got a Fiverr service that you can just get a quick review. I could give you a quick look at it. You can say, “Jerry what do you think of this business model?”
I might just make a quick video that says this isn’t worth anything as is. You might need to tweak these things to add some value.
It’s very easy for me to look at some other business models as you can see from all the things I’ve just mentioned with my own with a few friends. It’s very easy for me to look and show you what’s important to know about the situation.
So, you could say this is an elaborate pitch for my new Fiverr gig or you could say this is a really helpful educational tutorial with a lot of things to think about before you go even considering a business that might be for sale or selling a business.
I really hope you have been able to watch this before you have tried to buy a business because there is a lot of bad deals out there.
I love you.
You are awesome and I appreciate the chance to serve you today as a part of my business.
Edits from video transcript by Michel Gerard at www.michelgerardonline.com.