This transcript was generated from the episode audio and may contain minor errors.
I'm ready to sell my side hustle. How do I do it? How do you sell a side hustle without getting short changed? How can you get long changed? I don't think that's actually a word.
I just thought of it because people say short changed. Basically, how can you make the most money possible? How can you value your business, find the right buyer, and make a smooth exit? Now, that's usually the kind of thing that you think of for a startup, founder, or a company. You know, they're making their exit. They get acquired by a larger company. But we have seen
over the years a number of side hustlers also build projects to the point where they are then acquired. I'm going to give you a couple of resources. We're going to hear a question from Natalie. She's built this hustle that has grown bigger than expected, and now she's looking for the best way to sell it. But it's also challenging. It is a tough process because in her case,
she's not sure how to find the buyer, how to determine the worth, make sure she gets the fair deal, and so on. So let's break it down. What can you do? And also, if you want to build your business in a way that can get acquired at some point, what are some critical steps to take? Now, that could be a whole question of its own, but I'll just throw in a couple points on that when I respond to Natalie. I always want to give you something helpful and interesting detailed
question about selling your side hustle coming right up. Hey, y'all, this is Natalie from Orlando. I started my side hustle a few years ago, and it's grown to something bigger than I ever expected. The thing is, I'm feeling ready to move on. I don't necessarily want to just shut it down. I'd love to sell it to someone who could take it further, but I have no idea how to find
a buyer or even figure out what my business is worth. What's the best way to sell a side hustle, and what should I look out for to make sure I get a fair deal? All right, very cool that you have grown this side hustle more than you expected, and now you're looking at selling it. I want to refer you to a couple of friends who have a bunch of free resources, and they have specialized in this very area. So one of them is Alexis Grant, AlexisGrant.com. She also has this business, theygotacquired.com, which is all about helping
small business owners get acquired, theygotacquired.com. And then my other friend, John Wirillo, he's from Canada, builttosell.com. He's got some books on this same topic. And he also focuses on how to build your business in a way that it can be acquired later. Probably Alexis does that too. Aside from looking up their work, a couple of points, figure out what your
business is worth. And of course, this is part of the big issue here. But you want to determine a realistic price or at least a realistic range. And unlike big companies, side hustles and very small businesses are often valued based on how much profit they generate per year rather than their total revenue. So a really simple method is to calculate your seller's discretionary earnings, your SDE, basically how much money the business puts in your pocket each year. And a lot of small
businesses will sell for 1.5 to 3x, 1.5 times to three times their annual profit. Sometimes it can be more than that. Sometimes it is less. So that just kind of gives you a little bit of a ballpark. If you make $50,000 in profit annually, based on these numbers, your business might be worth anywhere from 75,000 to $150,000 depending on its potential. Again, lots of factors. But then next,
you're going to look for the right buyer. Most side hustles are sold privately rather than through big marketplaces. But there are some marketplaces like Flippa, Empire Flippers, Microacquire that specialize in buying and selling online businesses. And buyers are typically looking for cashflow positive businesses. Some investors are looking specifically for businesses they can take over and optimize and grow. And a lot of people are really happy to buy something that's already
running than to start from scratch. So that is your market. Next, you need to prepare for a smooth sale, which is all about documentation. There is a due diligence process, which can be quite elaborate, sometimes painful. And sometimes there is a transition period where some buyers want you to stay on for a few weeks or months or sometimes even longer to help them take over smoothly. So if you have a broker, they can help you navigate negotiations. But if it's a smaller
sale, you can structure it yourself with legal templates from platforms like Starter Story or LegalZoom that can help with the business sale. Now, obviously, this is a really big topic. I haven't explained everything that's involved. Just want to give you like a concise answer here. But hopefully, those are some next steps to get you thinking. Again, check out Alexis Grant and John
Rillo. They're offering some really great resources. Selling a side hustle is not as complicated as it sounds, but it does take planning. It is complex, let's say. So the best approach is to determine your fair valuation, find a serious buyer, and make the transition as smooth as possible.
I hope that helps. Let us know how it goes. Listeners, thanks for being out there. Complete archives of the podcast at the website, www.sidehustleschool.com. New episodes drop every single day, every morning, quite early in the morning, but you can listen wherever you want. Seven days a
week, always free as well. That's all for now. My name is Chris Guillebeau. This is Side Hustle School. From The Onward Project.
