The EXITPreneur’s Playbook, Joe Valley
Mar 14, 2022
How to maximize the value of your online business to sell it
Entrepreneurial Tips you'll learn today on The Sales Podcast...
- He used to focus on the money
- Now he focuses on how many people he can help
- Now he makes more money
- Self-employed since 1997
- Was a media buyer back then
We present good information and let people make a decision."
- In 2005 he launched his first online business
- Came out the other end tired and woke up and just decided to sell his business
- His advisor told him to hold on for another six months because the market was turning around in his opinion
- He put together some SOPs and sold in 2010, took a year off, and joined the Quiet Light Brokerage then (a team of two)
- Last year they did $250 million in transactions
Tom Hopkins is on The Sales Podcast
- Grown 55% a year on average the last four years
- They represent the sellers
- They don't "sell."
- Considers himself an educator
- When you're desperate you can't give it away
- He was a typical entrepreneur
- He ran his business and got sick of it and wanted to move onto the next venture, but he wasn't prepared for it
- Most entrepreneurs don't have accounting in place
- Most entrepreneurs don't have accrual accounting
- He didn't outsource his accounting
- Outsource your e-commerce accounting
- Set a goal to sell and reverse engineer your business
- You need to know your exit goal in dollars to know if it's a pipedream or a reality
- Buyers are looking for four things
- Risk
- Is it a single-channel vs. multi-channel?
- Is it a young business?
- Buy a bigger business with more history
- Growth
- Transferability
- Documentation
- Risk
- Gets 300-400 leads a month
- The valuation call is free
- Buying with an SBA loan is fantastic
- But SBA loans are tough for online businesses since they might be too young or they co-mingled their finances
- You need to qualify as a business and a buyer for an SBA loan
- E-Commerce Lending in Florida is a great SBA broker/lender
- His median transaction size was $1.8 million and 90% were all-cash
- SBA deals are usually more stable and more likely to close, but they take longer
- It's emotional
- It's hard to find a buy-side broker
- He has to help the buyer as much as the seller
- He creates a detailed P&L
- He asks all of the tough questions upfront
- There are lots of reasons to sell a business
- Entrepreneurs get shiny-object syndrome and want to move on
- In the vast majority of businesses, the bulk of the money is made when the business is sold, i.e., when Elon Musk or Jeff Bezos "sold" by going public
- Most people don't take a lot of money out in the early years
- In 2021, about 30% of buyers were FBA Aggregators—Fulfilled By Amazon
- This is new in the last five years, Thrace.io is the biggest
- The other 70% are private equity firms (20%) and smaller entities buying for themselves (50%)
- "Acquisition Entrepreneurship" - "Buy Then Build"
- You should like what you're doing
- There will be tough periods so it helps to have a passion
- Training and Transition period
- Hold back 20% to keep the seller around
- 2013 he closed 23 transactions that were sold by what he'd call kids today
- We're in a different world now
- People know what an online business is today
- Transaction size has grown 10-fold
- 3.7 offers per listing
- But it's not as crazy as real estate
- Younger businesses are growing quickly
- This is not a passive investment
- You're buying a job
- Most transactions are done remotely, without meeting in person
- He does best when he focuses on one thing
- His one thing is M&A, so he doesn't mess with crypto
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- He has never had his entire team of 15 in one place
- He has never met his business partner's spouse in the decade they've been partners
- The book is a playbook for the seller
- If you're buying an online business, get his book and, "Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game"
Sales Growth Tools Mentioned In The Sales Podcast
- Get a free download of "The EXITPreneur's Playbook"
- Get his book, "The EXITPreneur's Playbook: How to Sell Your Online Business for Top Dollar by Reverse Engineering Your Pathway to Success"