Chapters from Starting & Sustaining
Always be preparing to exit
You may have no plans to ever sell, but sometimes life throws you a curveball. Moreover, even if you never sell, being mindful of these aspects of your business will make life easier for the rest of your time running the business.
Be certain that selling is the right option
Once the idea of selling starts to take hold, it can quickly become tempting to follow through. But there are some serious questions to ask yourself to avoid any regrets.
Know what buyers want
Every business is unique, and every buyer is just as unique. However, there are some fundamental things that matter to buyers. Understanding them long before you sell can help you build a better business.
Understand your business valuation
Valuing a SaaS business is fairly straightforward, but there are some ways you can work to improve your valuation.
Understand the process of selling
Selling a business isn’t easy, and you’ll learn a lot your first time around. Knowing a little bit in advance can really help you prepare and build your business in a way that makes life easier whether you sell or not.
Consider talking to a broker
Should you use a broker to sell your app? Maybe, but not necessarily. Whether you work with a broker or not, it can’t hurt to talk to one. They’ll help you think about your business critically, and if you decide to work with a good one, they could get you a better offer than you might on your own.
Understand deal structures
Deals for buying business can be incredibly complex, encompassing holdbacks, escrow, seller financing, non-compete agreements, consulting agreements, and more. Acquire a basic understanding of how these can affect you if you ever sell your business.
Resources & Links
Fourteen Things That Will Keep Me From Buying Your App
JD Graffam shares the factors that he’s found to be central to his decision-making process when buying an application.
SaaS Metrics for Valuing a SaaS Business
Thomas Smale from FE International presents a much more granular view of the formulas and detailed considerations that will affect the value of your business.
What I Learned Selling A Software Business
Patrick McKenzie (aka patio11) details the process of selling his small software business, Bingo Card Creator. He talks about valuations, the transactions, and all of the ups and downs of going through the process.
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