4 ms·
is 8k revenue or profit ? If profit, 250K is not a stretch considering it is just over 2.5x the profits. Some may argue that 2.5 of revenue is also not a bad th
by codegeek 3y ago
is 8k revenue or profit ? If profit, 250K is not a stretch considering it is just over 2.5x the profits. Some may argue that 2.5 of revenue is also not a bad thing but usually for revenue under 500K, I don't consider multiples of revenue as it is too small and need to focus on profit.
It is par for the course if everything else checks out. If anything, it is at the higher end of multiples for a business of this size.
THe question you should be asking is if this is a business you can take over and run and more importantly, grow further. How solid are the existing customers ? What is the churn rate ? What is the current growth rate ? What do you know about Social Media Management ?
Also, forget about "Passively Managed business". There is no such thing especially in early days. Even if you are buying an existing business, you have to run it actively no matter how passively managed it was because for you, it is a new thing and like a job the first 2-3 years. Don't fall in that trap thinking it will run itself. It won't.
Source: Bootstrapped business owner for 8+ years and counting. If it matters in this context, I did buy it as a side project but built into a proper company.
- 6DM 3y agoIt's $8k cashflow. Those are great questions, I figure I would get all of those once I reach out to them for more details. Thank you for posting them as I will make sure I don't miss that. I don't know much about social media management, but I feel confident I can quickly learn just about any business. It is risky to go into a business that I don't specialize in, but I have a lot of experience delving into topics I don't know much about and becoming an expert. I think that being able to market an existing product will be a key skill to master early on, if I want to continue growing any business I take over. Thanks for the heads up about passively managed business. You're right it would involve taking over and learning a ton. I was mostly thinking from the keeping-my-day-job perspective, but I agree with you, I should probably forget about these "side" projects as it would just be another full time job.