Flicflac
Joined 6 years ago
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Jan 17
Find my socials here: https://bio.link/michaellin
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Comment · 3 years ago
I recently did an interview with Acquire.com on my experience buying and selling a company on their website.
One tip I share in the interview is how to properly value a company.
Most of the time, we value companies based on a multiple of revenue. Eg If a company makes 10k/year and we give it a 3x multiple, then the company is worth 30k.
However, for smaller companies this is actually a mistake because it doesn’t account for the value of the IP itself. Especially at low revenues, the code and IP are worth far more than the revenue it generates.
So the proper way to value a company, especially if it doesn’t make that much money, is to ask these two questions:
1) How much would you pay for this company if it made 0 revenue? 2) Then add on the revenue multiple on top of your answer to 1).
And that’s the real value of the company.
In full transparency, I didn't make much on the acquisition, maybe $15k from the acquisition + revenue which I had to split with a partner and to cover some costs. But it was still an experience.
If you have any more questions on buying and selling companies, I’ll answer them below.
My full interview is here: https://acquire.com/blog/how-to-buy-and-sell-a-saas-business...
Comment · 3 years ago
We often think building courses is the ultimate passive income play. But the reality is that selling a course is neither easy nor passive.
1. I only made about $1500 from two courses I built in the last 6 months.
Considering I spent 3 months on the first course, and 2 weeks on the second, I probably won’t break-even on either course for a long time.
2. I also have a sales conversion rate of 1.5%. That means for every 100 people who land on my course pages, I can expect to make 1.5 sales.
Driving 100 people to a course page is actually very difficult, as it requires somewhere between 50k-100k post impressions to get there.
While attainable for people with a mid-5 figure audience, I’d have to post an insane amount to get that many post impressions to make a sale.
Stories of people making lots of money from course sales are anomalies. The reality is that most course creators likely won’t break-even on their course.