This transcript was generated from the episode audio and may contain minor errors.
[Music]
When should I sell my business and where do I sell it? We talked about this question on one of the third way calls recently. And today another listener is wondering something similar. Welcome to Side Hustle School. My name is Chris Guillebeau.
So first of all, couple of things here. To get to this point where you're even able to ask the question, is reason to celebrate twofold? Because first of all, this caller and anybody else in that situation, they have created an asset. That's what it's all about. You're trying to create something that can make money for you, not just work harder.
Create something that can potentially earn money for you, which of course, when you're gonna sell a business, that is a primary goal. So, wonderful. But secondly, another reason to celebrate might be because you're smart enough to realize that you might not want to do this thing forever. Whatever it is that you have started, instead of just planning to operate it forever, you've actually thought, oh, maybe I want to consider moving on. Maybe I want to ask myself, what's the next project?
I'm rather just trying to do both things or trying to continually start projects or just shut them down without getting any value from them. Maybe there's a way to sell it. So, two reasons to celebrate, but how do you know when it's the right time and then what do you do next? How do you actually go about selling that business? That's what we'll talk about in this episode.
So glad you're here. Here's a message from our sponsor and then we'll dive right in. [Music]
Hi, Chris. This is Mike Jacob from Grand Rapids, Michigan. And I've been listening to the show for the past two years.
Thank you for all the value you provide through your podcasts and your books. My side hustle is called Saturday's A Rugby Day. It is a rugby lifestyle brand and custom uniform provider for our United States based rugby teams through our website at saturdaystarugbyday.com. My question for you is that, when do you know it is the right time to sell your business? And in addition, where are the best places to sell your niche e-commerce based business?
[Music]
Thank you so much, Mike Jacob, Grand Rapids. Appreciate you listening and congratulations, as I said in the introduction on getting to this point. Saturday's A Rugby Day. Pretty cool concept, very memorable name and obviously serving a tightly focused community. So all good things there.
When is the right time to sell your business? So I'm gonna give you two answers, which I think kind of go hand in hand. One is a bit more emotional or let's say heart centered and the other is very nuts and bolts business focused. So just to kind of lead with the first one, the right time to sell or the right time to move on, whatever it is, is kind of like when it's the right time, which is circular, but if you think about it, the right time is the right time. It's when you're not loving it.
It's when you're not into it. You have obviously been very passionate about building this business, this brand. Well, when you're no longer passionate or you sense that you're ready for something new or that you will be in a certain time, I think it's very important to pay attention to that. So whether it's selling that business or just finding another way to make a transition, that's usually gonna be the right move. But business wise, the answer is the right time to think about selling is when you have enough sustainable income to make selling it worthwhile, because the value of your business, and here when I say value, I just mean the monetary value, like what it can sell for, what it is worth to a potential buyer.
That's gonna be based in large part on the recurring income or the predictable income of the business, okay? So in this case, it sounds like Mike is selling these rugby uniforms to teams throughout the United States. So that could be somewhat predictable in the sense that there's a certain number of teams, they're gonna be ordering a certain number of uniforms. It may not be a subscription service or a recurring revenue in the sense that it's exactly predictable, but it does seem like it's sustainable, so that's good. So it's when you have enough sustainable income that an independent buyer or an auditor or somebody looking at the business will be able to say, oh, here is what the annual predicted income is gonna be, and here's what a fair multiplier of that value will be.
There's a lot more we could say about that, but to not go into too much detail, I'm gonna give you two resources for Mike Jacob and anybody else out there who's interested. The first one I always send people to in this situation is a book called "Built to Sell" by a guy named John Vorello. John has actually built a whole space, like a number of books about this concept, but I think "Built to Sell" was his first one, kind of his legacy book about it. So I actually read that a number of years ago and really, really enjoyed it. "Built to Sell" by John Vorello.
And the other resource is bizbysell.com. So I think Mike Jacob was asking like, where would I go and sell my niche e-commerce-based business? Well, that might be where, or if it's not where, you're at least gonna get a lot of information from it. So bizbysell.com. I haven't looked at it a number of years, but I just pulled it up and on their homepage, it says they've had 100,000 sales.
So 100,000 small businesses have changed hands on this site. Right now they have 45,000 active listings. So there's a whole formula there of how businesses are listed. As I said, if you kind of dive in there, it's been a few hours, perhaps, you're gonna get a lot of information and can determine some next steps. So good luck.
Thanks again, Mark Jacob. Anybody else out there, you're awesome. Thank you so much for listening. If you have a question of your own, come to sidehustleschool.com/questions. We're gonna continue to feature them, and keep rolling along no matter what's happening in the world.
Now I'm gonna be here, and I'm so grateful that you're listening. My name is Chris Guillebeau. This is Side Hustle School. [Music]
- From the Onward Project.
