[alex_g]

If you're interested in buying and/or selling small projects, you can typically expect to pay more than $5k for something that's making any consistent amount of money.

You're also unlikely to find a great deal on a really special project on a marketplace. People who post on marketplaces like Flippa or MicroAcquire or SideProjectors (there're dozens of them) have either:

1. Realized the time it takes to maintain is not worth the revenues/profits

2. Realized the income is not sustainable and are trying to cash out at the end of a great run

3. Realized that some folks are willing to pay very high multiples and will list their projects at prices most (but not all) people will balk at.

If you're really interested in taking over a project that's profitable, network with people, do cold emailing, and find opportunities to take over projects that the owners are simply not interested in any more.

In other words, look for the elderly couple who is ready to move on from owning their profitable, outdated shop.

[runako]

There are a lot of reasonable reasons people would list a sub-scale business on a site like those. Some examples:

Take an app that makes $500 net monthly and requires 1-2 hours per week of work. Solid hourly rate, why sell? Except:

- Sudden change in family responsibilities leaves founder without the small amount of time needed.

- The business might net $5k in a sale, and the founder has an urgent need for cash (for ex for home purchase/repairs). The founder resigns to a fire sale because she needs money now.

- Founder realizes the business will remain sub-scale until someone injects another $50k. Founder has a day job but not $50k, and has no interest in raising money.

- Founder's job reviews side project and decides it's too close to "competitive" and asks founder to dispose of it.

- Founder takes a new job that prohibits side gigs.

- Founder gets sick and isn't able to maintain the business.

- Founder gets divorced and is ordered to split the value of the business with ex-spouse. (A sale may be the founder's only option to produce the cash.)

- Founder built the app using tech X 3 years ago. Founder now viscerally hates tech X and would rather have $5k than keep using that tech.

- (Edit: adding this one) Founder was just learning business when they started this business, and now wants to aim bigger. This business could be a good starting point for someone else in their personal development cycle.

Basically, there are a lot of reasons a founder might sell that have nothing to do with the business or its prospects. There are also reasons that have to do with the business not being a fit for the founder at that time. Due diligence is key when buying anything.

[IgorPartola]

I am in that last category myself. I had a really nice and useful budget app that had thousands of daily users and cost all of $20/month to keep going, if that. Was making some money off it too with ads and sales of the ad-free version. Except I built it using Ionic back when it was based on Angular 1. Fast forward to now and that code simply doesn’t compile anymore against modern iOS and Android and I don’t have the time to rebuild it. With some TLC it could have been something but at this point all I’m doing is sending replies to customer emails explaining why the app isn’t available anymore. Lesson learned: JavaScript frameworks ruin lives.

[muzani]

I sold an app with good traction for $20k. Part of the reason was we hated the users. We built a diet community and that community was literally toxic - they'd encourage people to follow crazy diet approaches that would make them pass out and they'd group attack anyone who brought up medical evidence that this was a misinterpretation (including me, our suppliers & our dietitian).

The company that bought it got sick of the users within a few weeks but unfortunately their attempts to pivot and rebrand didn't work.

[evrydayhustling]

Those are good reasons to motivate a seller. But the main problem with small transactions is that the buyer's costs/risks in making an investment can eclipse the "inherent" value of the project.

Consider that theoretical 2h -> $500 / month project:

- Would those 2h for the founder be 2h for the buyer, or much more? - How much initial training would it take for the buyer to sustain those economics? - Are those 2h sufficient to protect / grow the business in a changing market, or just an instantaneous rate? - Are the assets of the business actually secure? (unambiguous ownership / confidentiality, etc.)

Those are all pretty big unknowns, and even if the founder is confident about them the buyer would spend significant effort to verify -- very possibly more than the $5k sale price. It might even be cheaper (incorporating risk) to build a $500 / month business than to verify the purchase of one. Small projects have to sell at a VERY unfavorable discount to counter this.

The exception are buyers who make their own business out of efficient diligence and exploitation for many similar projects (like high-traffic sites for a single community). If you fit into such a category, it is probably better to find a specialized marketplace or a buyer with a reputation than attempt to sell in a broad market.

[alex_g]

All valid reasons, but I think my point was moreso if they find themselves posting on MicroAcquire, they will likely end up in my #3, whether they intended to or not, and rightfully so.

[Scoundreller]

Or 4: realized that the real money is in being an unethical operator, and while you’re not such a person, you’re okay selling to someone that is.

See: browser extensions. Or anything with traffic that is otherwise hard to monetize.

[beambot]

Best write-up I've seen about selling a small SaaS is HN OG patio11 / Kalzumeus' sale of Bingo Card Creator:

https://training.kalzumeus.com/newsletters/archive/selling_s...

[iaw]

Just to echo this, I recently had a lovely conversation with a guy building a business he knew would be irrelevant in 10 years with the goal of selling in 3 years to someone who didn't realize that.

I will never buy a business, real estate is a much safer bet.

[beachy]

> a guy building a business he knew would be irrelevant in 10 years

To be fair, almost any software based business could be irrelevant in 10 years.

[shard]

Real estate comes with its own set of problems.

First is the large capital outlay as compared with a small web project, which means many more eggs are in that one basket.

Second is the slow turnover, which means that you may be waiting for years for a good property (since if it's a good property, there are only a few situations where the owner would sell), and if you choose poorly, you will be stuck with the poor property for many years (as no one would want to buy it).

Third is you will still have to watch out for your property becoming irrelevant, for example for a retail store, either due a downturn in the trendiness of the neighborhood driving out business, or perhaps undesirable construction in the area (e.g. a mall across the street that takes all your foot traffic).

Really the safest way to invest in real estate is through REITs, where the risk is spread across many properties.

[gpapilion]

This is basically Don Fisher’s (gap founder) advice for planning a business. Assume you’ll go out of business in five years.

[alex_g]

Yeah that's messed up. Any time you're buying anything, but especially a business, you need to do your due diligence.

Perhaps I'm naive, but I think your risk in buying a business goes down if the current owner under-appreciates what they have, and you have the skills to do it better than them.

[raspasov]

Don't you think that's a bit of an extreme statement? There must be a price where the price-to-risk ratio makes it worth it. Nothing is 100% certain, after all. Every investment has some amount of risk.

[prawn]

Or don't have the time. I have/had profitable projects that don't take much time, but they'd be more profitable under someone who isn't spread as thin.

[rlayton2]

This is why I sold a website making about $150/mo in ad revenue for $5k. I knew the site could make more, but had other things on the go and I couldn't spend the time on the site to improve it.

The person that bought it from me did make those changes and did make more money, but I just didn't have the time to get there. Win-win for me

[HeyLaughingBoy]

That last one is exactly what a friend of mine did. IIRC, he contacted a business broker and told them what he was looking for and they found the company.

He bought a literal Mom & Pop outfit that made thermocouples for a specific application. The "Pop" was going blind and Mom wanted to retire. They were barely making money but my friend realized that it was mainly because they were underpriced and their marketing was nonexistent.

He bought the business for a song and immediately called all the customers and told them he was raising prices to market rates. After turning things around, he sold the company about five years later for a healthy profit.

[enobrev]

Any suggestions on the other end: where to sell a business that is both profitable and should continue to be? Asking for a friend who is looking to retire in the next couple years (at the normal retirement age).

[alex_g]

No shame in my #3 above. I'm not an expert, but typically multiples range from 1-4x annual profit, but I've heard through the grapevine that some folks are paying 5-10x. So absolutely list on MicroAcquire.

If it's very profitable, then they might consider talking to FEInternational (or another firm like them). They take a cut, though. But they do pay referral fees, so make sure you get that cut!

Edit: Before someone says I'm crazy for saying things sell for 1x annual profit, I'm not saying that's typical for a brilliant business. It's more typical for something with heavy maintenance, or with really low profits. If you're really interested, check out the link in my bio.

[amoghs]

A part of me feels that with any acquisition ever. If it's really that good, why're you selling?

I think there's some element of passion (like you said), though also just around the skill set needed to really take the business somewhere.

[tekstar]

I have a niche iOS app that makes between $200-400 monthly. I would sell it to someone who would continue to grow it because I would rather build new things than continue to add content to the app.

[nodesocket]

Agree, but love this idea. Just change the maximum sale price to something like $25,000.