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How to Sell Your Ecommerce Business in 2024

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By Robert Kale and Jock Purtle

You have been building an Ecommerce business that you’ve put a lot of time, effort, and sweat equity into growing, and now you’re looking to sell. Your objective is to get maximum value and you’re assessing steps to prepare for the sale. There are a multitude of variables to consider and in this post, we’ll cover them all to maximize the price you receive when exiting. Keep in mind: the insights in this article are not inclusive of Amazon FBA business sales, this is only for standalone Ecommerce websites. If you want to learn more about selling an Amazon FBA business, our insights article is here.

Let’s get right into it.

We Analyzed 215 Ecommerce Sales in 2021. Here’s What We Found:

 

The biggest takeaway — there were less deals overall in 2021 (the least since 2016) and this affected transactions of all sizes. The categories that saw the least decline most were deals in the $2M+ range. Since our data is based on listings, we can’t assume 1) they all closed, and furthermore 2) they closed at the listing prices. So, we will go through some statistics that show big upticks in deal sizes and multiples, and keep in mind this is a result of many more high value Ecommerce listings in 2021 compared to previous years.

  • The average multiple for standalone Ecommerce sites was 3.49x, a slight jump from 3.41x in 2020.
  • Larger businesses still commanded the highest multiple (see multiples graph further down) but businesses selling for over $250K continued to rise as well.
  • Ecommerce continues to be the dominant category in the market, with a whopping 81% of all business sales being standalone Ecommerce websites for 2021.

 

What Are The Market Trends?

 

2021 had an explosion of high-price Ecommerce listings, with many more Ecommerce businesses listed over $7M asking price. With higher earnings, Ecommerce businesses can command higher multiples, so we saw the continued increase in average ecommerce multiples as more businesses reach higher earnings and listing prices:

 

Year Avg Multiple for Ecommerce
2014 2.34
2015 2.20
2016 2.25
2017 2.88
2018 3.00
2019 3.07
2020 3.41
2021 3.49x

 

Transaction volume for Ecommerce:

What Has the Average Sales Multiple Been Per Year?

Ecommerce businesses can sell for as little as a few thousand dollars, to hundreds of millions (if not billions) of dollars. This graph shows the data we analyzed – typically businesses in the $100,000 to $10 million valuation range. The average has been sitting around 2.2-2.3x earnings for the previous two years, and then jumped to 2.88x in 2017, 3.00x in 2018, 3.07x in 2019, 3.41x in 2020 and 3.49x in 2021.

Average multiple over the last 10 years:

What Size Store is Worth More?

In general, the larger the Ecommerce business, the more it is worth. Here is how to understand this graph below. Let’s say that a business sold for $300,000. On average that would mean that its annual profit was around $111,000 ($300,000 divided by 2.7, because the average multiple for that size is around 2.7x). Another example would be a business that sold for $600,000. On average that would mean that its annual profit was $153,000 ($500,000 divided by 3.26). Similarly, a business that sold for $4 million would mean that its annual profit was around $1 million ($4 million divided by 3.91).

 

What is the selling process?

The selling process is fairly straight-forward but can be more complex and take more time depending on the size of the business. In general, most sales will be structured like this:

  1. You decide to sell
  2. You get a valuation of your business
  3. You develop a prospectus (all the facts and figures about your business)
  4. Find potential buyers for your business
  5. Negotiate a price with potential buyers (total price and terms of the deal)
  6. Due Diligence – buyer verifies all the financials of the business
  7. Transfer of the assets & money
  8. Help train the new buyer to run your business

 

What is the value of your inventory?

How do you value my inventory?

Inventory is required to run your business. It is customary to include a normal inventory level in the purchase price of a business that can sustain current revenues being generated by the business. Therefore everything over that amount is to be purchased by the buyer in addition to the business valuation. The following will generally happen when considering inventory:

1) Prior to closing the sale, an inventory count is taken and the sale price is adjusted, up or down, from the amount included in the sale price.

2) Inventory is valued at cost. If the inventory is significantly higher than the normal level, a price over that level will may be negotiated.

3) A decision needs to be made whether the cost of the inventory is to be determined by using the original invoice, a percent of retail price, or a professional inventory firm.

4) Not all inventory is created equal. Aged, broken or obsolete inventory will be determined if it is sellable and the price negotiated appropriately. This mainly comes about as discounting a portion of the inventory, but can also be the seller financing a portion and the buyer paying for it only when it sells.

How do I increase the value of my business before selling?

If you can achieve the following you will be able to increase the value of your business:

  • Predictable key drivers of new sales
  • Stable or growing traffic from diversified sources
  • Established suppliers of inventory with backup suppliers in place
  • Traffic stats (Google Analytics or other) with a long history
  • High percentage of repeat sales
  • High percentage of repeat visitors
  • Clean legal history
  • Brand with no trademark, copyright or legal concerns
  • Documented systems and processes
  • Growth potential

Where Can You Sell Your Business? The Best Ecommerce Business Brokers

Small Business Marketplaces – (under $300K yearly profit)

Smaller business and micro-businesses are usually best sold privately by the owner through forums or classified websites.

To sell your small business, check out:

Broker – ($300K- $10M in yearly profit)

Medium-sized businesses in the $300k-$10m yearly profit are best sold through brokers who help with finding buyers and negotiating and structuring the deal. To sell your medium-sized business, check out:

  • Business Exits – great if your business is making 300k – $10m in yearly profit

Investment Banks and Merger & Acquistion Companies – (over $10M+ in yearly profit)

Larger businesses are best sold through investment banks or merger and acquisition companies. To sell your large business, check out:

  • hl.com – best for businesses over $10m in yearly profit

 

How much will it cost to sell my business?

Generally a business broker will charge 10-12% of the sales price of an Ecommerce business, including inventory (and there can be a smaller, negotiable commission for larger businesses).

How long will it take to sell my business?

The time it takes to sell an Ecommerce business depends on the individual business and terms of the deal. Generally, larger deals (over $1 million) will take longer to sell than smaller deals (under $300K) because of the complexity of the business and the risk that a buyer is taking. Over 50% of deals close within 90 days and over 70% close within four months.

How To Sell Your eCommerce Business in 2024

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You have been building an ecommerce business that you’ve put a lot of time, effort, and sweat equity into growing, and now you’re looking to sell. Your objective is to get maximum value and you’re assessing steps to prepare for the sale. There are a multitude of variables to consider and in this post, we’ll cover them all to maximize the price you receive when exiting.

Let’s get right into it.

We Analyzed 115 Sales: Here’s What We Found

Some interesting things we found:

  • -The average multiple (2.25)
  • -There where more transactions in the $0-$250k range, this is reflective of the mode (most frequent) being higher for eCommerce businesses compared to all internet businesses
  • -Larger businesses ($5 million plus) still commanded the highest multiple
  • -Dropship sites commanded a lower multiple
  • -Seems that it’s harder to grow a dropship website over $1 million in sales

What Are The Market Trends?

On a total deal transaction volume basis, we can see that between 2014 and 2015 the total businesses sold doubled. 2016 took a slight downturn but I forsee an uptick for 2017.

What Has the Average Sales Multiple Been Per Year?

 

E-commerce businesses can sell for as little as a few thousand dollars to hundreds of millions if not billions of dollars. This graph shows the data we analyzed which are typically businesses in the $100 thousand to $10 million valuation range. As we can see the average has been sitting around 2.30 times earnings for the past two years. I think there has been a drop in the average multiple slightly because there has been more supply of e-commerce businesses on the market.

Are Small Or Larger Businesses Worth More?

Surprisingly there is a large portion of sales in the $200k-$500k range. In each of our reports, we have seen a large proportion of sales pushed towards the lower end of the spectrum in the sub $200k range. A guess at why this is happening is because of the large transaction value of eCommerce stores. This graph represents gross sale price so that might mean it is easy to grow an eCommerce store a few hundred thousand dollars per year in gross sales.

What Size Store is Worth More?


In general, the larger the e-commerce business, the more that it is worth. Here is how you understand this graph below. Let’s say that a business sold for $75,000. On average that would mean that it’s yearly profit was $32,500 ($75,000 divided by 2). Another example would be a business that sold for $500,000. On average that would mean that it’s yearly profit was $208,000 ($500,000 divided by 2.4). Similarly, a business that sold for $4 million or on average that would mean that it’s yearly profit was $1.2million ($4 million divided by 3.3)

From the data you can see that multiples averaged similar prices for each valuation bracket between 2013 and 2015.

Where Were the Sales Distributed?

This graph represents the distribution of the sales.

What is the selling process?

The selling process is fairly straight forward but can be more complex and take more time depending on the size of the business. In general, most sales will be structured like this:

  1. You decide to sell
  2. You get a valuation of your business
  3. You develop a prospectus (all the facts and figures about your business)
  4. Find potential buyers for your business
  5. Negotiate a price with potential buyers (total price and also terms of the deal)
  6. Due Diligence – buyer verify’s all the financials of the business
  7. Transfer of the assets & money
  8. Help train the new buyer to run your business

What is the value of your inventory?

How do you value my inventory?

Inventory is required to run your business. It is customary to include a normal inventory level in the purchase price of a business that can sustain current revenues being generated by the business. Therefore everything over that amount is to be purchased by the buyer in addition to the business valuation. The following will generally happen when considering inventory:

1) Prior to closing the sale, an inventory count is taken and the sale price is adjusted, up or down, from the amount included in the sale price.

2) Inventory is valued at cost. If the inventory is significantly higher than the normal level, will a price over that level will be negotiated?

3) A decision needs to be made whether the cost of the inventory is to be determined by using the original invoice, a percent of retail price, or a professional inventory firm.

4) Not all inventory is created equal. Aged, broken or obsolete inventory will be determined if it is sell-able and the price negotiated appropriately. This mainly comes as discounting a portion of the inventory but can also be the seller financing a portion and the buyer paying for it only when it sells.

How do I increase the value of my business before selling?

If you can achieve the following you will be able to increase the value of your business.

  • Predictable key drivers of new sales
  • Stable or growing traffic from diversified sources
  • Established suppliers of inventory with backup suppliers in place
  • Traffic stats (Google Analytics or other) with a long history
  • High percentage of repeat sales
  • High percentage of repeat visitors
  • Clean legal history
  • Brand with no trademark, copyright or legal concerns
  • Documented systems and processes
  • Growth potential

Where Can You Sell Your Business? The Best Ecommerce Business Brokers

Small Business Marketplaces – (under $100k)

Smaller business and micro-businesses are usually best sold privately by the owner through forums or classified websites.

To sell your small business, check out:

Broker – ($100k – $20m)

Medium sized businesses in the $100k-$20m are best sold through brokers who help with finding buyers, negotiating and structuring the deal. To sell your medium sized business, check out:

Investment Banks – ($20m +)

Larger businesses are best sold through investment banks or merger and acquisition companies. To sell your large business, check out:

  • Business Exits – great if your business is making over $4m dollar profit per year.

How much will it cost to sell my business?

Generally a business broker will charge 10-12% of the sales price of an eCommerce business including inventory.

How long will it take to sell my business?

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QuestCo PEO Review

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Whether you’re looking to grow your business and need to be able to better organize things from an HR perspective, or simply wish to remove the burden of payroll and some additional related tasks, a PEO (professional employer organization) might be just what you need. You outsource such work to the company, and their experts handle it with more efficiency and expertise than you could provide on your own.

Yet there are many PEO different companies operating in this market, which can make choosing a service provider difficult. In this article we look at QuestCo, a widespread and rising PEO in the market, to help you determine if they are the right pick for you.

General Overview

Based around Houston, Texas and founded in 1989, QuestCo has always sought to be at the forefront of the PEO market, providing affordable payroll and HR solutions to its clients whenever possible. Utilizing modern ideas, practices, and technology, QuestCo has made themselves more competitive recently, despite being a somewhat smaller company in the PEO space (but still large enough to handle most company’s needs).

A more affordable and adaptable PEO than many of its competitors, we find that’s it’s usually best for small to medium-sized businesses looking for a simpler solution.

Features

  • All of the normal payroll and tax support functions you primarily expect from a PEO company.
  • Safety programs available for your employees that will be effective for most offices and industries. In some cases, worksite inspections will even be available to help maintain the maximum standards of safety and security.
  • Email and live chat support options, which help to increase accessibility.
  • The ability to cancel your plan without penalty, although they do ask for a commitment and some notice before your services are canceled.
  • You will remain strictly in control of your workplace and still make all relevant decisions.
  • Benefits plans available including those available for health, prescriptions, dental, and vision coverage. Health care accounts are also available.
  • Also available are life and personal accident insurance plans, as well as short and long-term disability insurance options.
  • 401(k) retirement plans available for your employees to utilize.
  • A commitment to lowering your workers compensation costs as much as possible. This is combined with risk management strategies and solutions to keep things affordable for your business.
  • Guidance and support for you regarding potentially tenuous HR and management situations should they arise.
  • Assistance in creating an HR handbook, should you desire it.
  • Help with the recruitment process, including handling job postings, some forms of screening and testing if your industry requires or would be benefited by them, and new employee documentation and setup.
  • The heavy use of a software cloud and related technologies to keep your information available and safe.

Main Takeaways

Pros

Access to All of the Basics: Generally, we found that QuestCo was missing none of the basic services and HR functions a smaller business should look for in a PEO company. If you’re looking for a comprehensive package that can handle anything you might need, QuestCo can help you.

No Bundling of Services: QuestCo generally does not bundle together its services and plans. This means your business will only need to select and pay for the services it plans on using.

A Clear Understanding of How to Use Software: While nearly every notable PEO in business today will have software or an online platform, we found that most of them don’t match up to what QuestCo offers its clients. They stay modern, think ahead, and remain accessible no matter the platform you need to work on.

Cons

A Relative Lack of Accreditation and Certifications: Most of the other PEOs we’ve reviewed had a few certifications ensuring that they were complying with the best practices in the industry. And while QuestCo does ensure they are above board in their dealings, those looking for a bit more confirmation might find it hard to come by. They are, however, a Certified Professional Employer Organization as per the IRS.

Not Too Much Information Regarding Their Customer Service: While we are unwilling to say that their customer service is lacking in any way, there aren’t too many reports about it in either direction.

They Do Not Operate in Every State: It should be noted that QuestCo does not operate across the country, do you will need to check to see if your business still qualifies. This combined with their ten-employee minimum makes them not the most accessible option for small businesses on the market.

What Businesses Is QuestCo Best For?

Smaller to medium-sized businesses: If you are working with a very large team or even an enterprise with hundreds to thousands of employees, we find that there are likely better options available that would not only be able to provide you with a better deal but also provide you with more options and services (which your business will likely need). However, a smaller business can feel right at home with QuestCo.

Businesses that know what services they want: Due to their flexibility regarding your service package, if you know exactly what you want and need for your business, you can make the most of QuestCo and likely save money in the long term.

Businesses with more than ten employees: QuestCo does generally have a ten employee minimum to work with them, which means smaller businesses might be excluded. If you have less than ten employees, you’ll want to find a different company.

Conclusion

With some of its limitations, we understand that QuestCo might not be the choice for every company, and it shouldn’t be. But for businesses that meet some of the criteria listed above and who could use most of the features they offer, QuestCo offers a great entryway into utilizing a PEO for your business. Yet whether you choose to work with them or instead decide on another company to handle your HR needs, we hope that you can come to the best conclusion soon and that you are satisfied with your final choice.

What Is Your Online Business Worth?

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The first question a seller asks us as a website broker when looking to sell their online business: “What is it worth?”

By Jock Purtle and Robert Kale

Back in 2008, we started analyzing all online business transactions that we could find for the previous year and presented it in a report to help online business owners, like you, sell your website. Each year, we analyze the previous year’s sales to come up with industry averages. Fast forward to today — this article represents a sales data analysis of the past 13 years from 2008-2021.

You will see the term “multiple” a lot in this article. That is referring to a multiple of the business’s profit. We use that multiple to determine the valuation, or list price, for the business. We calculate the profit for the business using SDE (Seller’s Discretionary Earnings) using this formula:


SDE = Net Profit + Owner Wages/Benefits,
In other words:
SDE = Total Sales – Cost of Goods Sold – Expenses + Owners Wages/Benefits

What are the Market Trends?

What is also discussed and needs explaining is when we say, for example, a “multiple of 2.44x.” This means that the amount paid for the business is a value of 2.44 times the profit (SDE).

Total Deal Volume (Selling Price) by Year:

EXAMPLE:

A business that is doing $300,000 in profit per year that sold for 2.44x means the selling price was: $300,000 * 2.44 = $732,000. This works in reverse as well. If a business sold for $723,000 at 2.44x, then (2.44 = $732,000 / 2.4x means the profit was $300,000). Note that the SDE is typically calculated for the trailing twelve months (TTM) of the business.

 

We Analyzed 2,543 Businesses With 7 Different Business Models

For this report, we analyzed 2,543 businesses that were listed from 2008 to 2021.

What we’re seeing from the data is a steady increase year-over-year in the average multiple of an internet business sale — and this trend continued through 2021.

In 2017, we saw an explosion in Ecommerce sales and this did not slow down in the following years.

This graph breaks down the percentage of the total deals each business category represented:

Below is how we categorized each business model:

    • Advertising – a website monetized through ads or affiliate offers
    • Ecommerce – traditional Ecommerce stores, drop-shipping and digital products
    • Ecommerce FBA – a storefront on Amazon, including businesses that hold inventory through Amazon FBA or ship inventory themselves or through other means.
    • Lead Generation – websites monetized through selling leads
    • Service – websites monetized through providing a service
    • Software – SAAS (software as a service) and any other software application-based business

Where Can You Sell Your Online Business?

Small Websites (Under $100K) – Sell yourself

Smaller business and micro-businesses are usually best sold privately by the owner through forums or classified websites. To sell your small business, check out Flippa.

Medium Websites (Under $50M) – Sell with a broker

Medium-sized businesses making between $250K and $20M in profit are best sold through brokers who help with finding buyers and negotiating and structuring the deal. We recommend Digital Exits.

Large Websites (Over $50M) – Sell with an investment bank or merger & acquisition company

Larger businesses making over $20M in yearly profit are best sold through investment banks or merger and acquisition companies. To sell your large business, check out Business Exits.

What We Found From Our Analysis

This graph represents a snapshot of the total data. It will give you a better understanding of where your business sits in comparison to all the businesses analyzed. The sum of transactions between 2008 and 2021 is over $4 billion. We believe this represents only 10-15% of the overall market of traded web businesses. The rest are either partner buyouts, employee buyouts or private transactions.

What Is The Average Multiple Per Business Model?

Now that we have over 14 years of data, we can see how the average multiple has changed annually:

 

 

Here are my thoughts on why there is a differentiation in average multiple between each business model:

Advertising – Demands a low multiple because you don’t control the customer. Essentially, advertising websites drive people to their website with the goal to send them away to another source.

Ecommerce – A consistent performer with a large volume of businesses selling and growing fast. It is, in my opinion, the easiest business to understand and train a new buyer on. With the ease of platforms like Shopify, they also often require fewer hours per week to maintain, and the owner can focus on marketing and growth. Many more ecommerce listings are coming to market and fetching higher multiples every year.

Ecommerce FBA – The fastest growing segment. Amazon-based businesses, however, demand a lower multiple than standalone Ecommerce websites. This is mainly because the business owner does not “own” the customers – Amazon does. Also, there is always an inherent threat of Amazon competing with the business, adding more risk for the buyer.

Lead Generation – Lead Gen had a surprisingly high multiple for 2017 and it has persisted, with an average multiple of 3.53x in 2021. As more competition comes online it has been harder to generate leads for businesses and thus the higher demand for leads.

Service – Again, a consistent performer and easy to understand business. The main value in a service-based business is the book of clients which can be transferred easily and, if they stay on as clients, it can lead to a decent return for a buyer. This category has seen a steady increase in the average multiple from 2017 (2.57x) to around 3.5x in 2021.

Software – Still a very highly-demanded business model and is normally the biggest winner in terms of average multiple of earnings. In 2021, it was only upstaged by an incredible year for Ecommerce businesses, which saw an influx of larger listings. Software averaged 3.63x multiple in 2021 listings, with the highest multiple at 5x. 

Are Smaller Or Larger Businesses Worth More?

We can see from the last 14+ years that there are consistent trends of multiples at each price point. The larger your business, the higher multiple you can demand. For example, in 2019 the average multiple for a business that sold between the price of 0 – $250K was 2.05x. However, if your business was worth over $7M, the average multiple was 4.21x. This is why if there is capacity in both the operator and the business for more growth, and the operator can be patient, we recommend growing the business to a higher level before seeking a buyer.

 

How to interpret this graph: If your business is generating:

  • 0-$125K annual profit = valuation range of 0-$250K
  • $125K-$200K annual profit = valuation range of $250K-$500K
  • $200K-$380K annual profit = valuation range of $500K-$1M
  • $380K-$650K annual profit = valuation range of $1M-$2M
  • $650K-$2M annual profit = valuation range of $2M-$7M
  • $2M-$10M annual profit = valuation range of $7M-$100M

This will give you a pretty accurate range of where you business sits in the valuation spectrum.

How many transactions occurred at each price point?

This graph represents the total number of transactions that occurred in each price range. For example, in 2017, there were 125 transactions in the $0–$250K range. Similarly, there were 103 transactions in the $250K–$500K range.

 

This data represents the volume of transactions at each price point. Obviously, there will be more transactions of “smaller” businesses in the $0 – $500K range and less supply of businesses at a higher valuation range.

What do the multiples look like on a scatter graph?

To get a true appreciation of averages you need to look at the dataset as a whole. This scatter graph represents each transaction’s multiple:

scatter_Graph

 

Best YouTube Marketing Agency

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A specialized YouTube marketing agency will either help your company create video content that will bring in new leads and sales, or alternatively find opportunities via solid ad placement and sponsorships that will allow your products and services to reach new markets. And as opposed to more traditional forms of marketing, YouTube marketing can target the audience your key audience, providing the best ROI possible for each marketing dollar.

Based on our research the top Youtube Marketing Agency for 2019 is Voy Media 

What to Look for from a YouTube Marketing Agency

Choosing the right agency for your business is an important endeavor that is worthy of your time. Fortunately, we’re here to make the research a bit easier. While you look for a marketing agency that will mesh well with your company, you should also look for the following from any company you look at:

  • Adaptivity: Above all else, it’s vital to find a YouTube marketing agency that can quickly adjust to new trends on the platform while also determining which new trends are worthwhile to pursue in the first place.
  • Attention Given to Your Base: A poor YouTube Marketing Agency will use a one-size-fits-all approach to the platform. While there are general strategies that will work for nearly every business, a good agency will know precisely how to identify and then target your core customer base.
  • A Complete Understanding of Video Content: This should be a given, but some marketing agencies might most go strictly by the numbers and react from there. If they don’t have an understanding of what makes good YouTube content or ads in the first place, then they’ll always be a step behind.
  • A History of Success: Many agencies can talk the talk, but how many have proven track records? Look for proof, and don’t just listen to their marketing materials.
  • Honesty and Transparency: If you don’t feel you can trust an agency entirely, move on and look at a different agency. You need to be able to work with people who will at any time by happy to tell you what they are doing and why they are doing it. Your business needs and deserves nothing less.
  • A Clear Vision for Your Marketing Efforts: While adaptivity is vital, you also need to find an agency that won’t get sidetracked too easily. When talking with them, see if they have a goal or vision for your marketing campaign. If they do, even if you want to adjust that vision, that’s a good sign.
  • Sufficient Resources: Is the agency prepared for success? Should your efforts prove highly effective, you don’t want to be weighed down by an agency that doesn’t have enough resources to capitalize on that success. Make sure they can scale their efforts.

1) Voy Media – #1 Pick

Voy Media to have an excellent understanding of You Tube Ads.

Overall, we find Voy Media to be an excellent marketing Youtube agency able to adapt to many platforms (especially YouTube) and create a big-picture strategy for your business, no matter what industry you happen to be in.

You can expect the following when working with Voy Media:

  • – Excellent Facebook integration and great marketing support for other social media platforms on top of YouTube.
  • – A highly adaptive approach that keeps them ahead of the competition, keeping you ahead of your competition.
  • – An approach to video content that emphasizes your business’ specific target audience, making sure to send the right message to the right people.

“Youtube now gives us more granular feedback about the demographics that are responding well to our ads. This way, we can make the necessary adjustments to optimize our campaigns. To make Youtube ads convert well, our brands focus on testing their ad creatives, landing pages, and conversion rates by running promotions and special deals to Youtube users — this will help get better returns on the campaign, also targeting the right people at the right time.”

Kevin Urrutia, Voy Media’s Founder

2) Digital Marketing Agency (DMA)

Digital Marketing Agency is one of the biggest and most highly regarded agencies in the field, seeing as it’s been around since 2002 and they have hundreds of active clients. This expertise and clear demonstration of adaptability (think of all the ways marketing has changed over the last two decades) only prove that they can be a great choice for your business. Their size also means that you’ll always have the resources you need to make the next big move.

There are a few caveats to working with them, as you’ll want to double check what industry you’re in (they handle most industries, but your business might fall outside their traditional purview). And despite their massive reach, they don’t specialize in YouTube marketing as much as other agencies.

As a whole, we would recommend DMA as a good option for a business looking for a full digital marketing solution as opposed to a YouTube-centric service.

You can expect the following when working with Digital Marketing Agency:

  • – An agency large and comprehensive enough to handle all your marketing needs. If there is a marketing service you want to be done, they can deliver. This means you will likely have a greater degree of synergy between your different efforts and campaigns.
  • – Other services as needed such as reputation management and additional web development.
  • – Excellent e-commerce business support, ensuring that you get more leads regardless of your main platform.

3) Marketingagency.io

Founded in 2007, Marketingagency.io is a larger agency that will call its services “boutique,” hoping to emphasize the fact that they will cater to your business’ core audience. It has a variety of more personalized marketing services that make it a great choice when you know what you want to zero in on and you think that the standard plans aren’t going to cut it.

When it comes to YouTube marketing, they have a dedicated plan of action in which they will take their time to investigate your brand, develop a strategy that is tailored to their findings, and then constantly adjust as needed in order to change with the times and with your brand. They’re willing to try every tool in the shed to get you the success your business needs, and for that reason, they stand out among the rest.

You can expect the following when working with Marketingagency.io:

  • – Dedicated engagement and adjustment to your YouTube marketing campaign after it has begun. Optimization of lead generation, conversion rates, and other metrics and processes is their priority.
  • – A willingness to try a variety of (or more likely a combination of) YouTube marketing strategies based on what your business needs.
  • – A high level of communication regarding your marketing services, so you don’t ever feel left out.

4) Working Media Group

A relatively smaller agency when compared to the other entries on this list, Working Media Group (founded in 2005) has a variety of clients ranging from medium-sized businesses to such clients as Walmart and Centurylink. Handling both B2B and B2C needs, it’s likely that they will be able to adjust to your business.

They also engage in influencer marketing (a potentially great way to utilize YouTube) and experimental marketing techniques. Working Media Group is willing to try the most efficient solutions for your business, even if that means they have to put in some extra legwork themselves. For that reason, we recommend them above other YouTube marketing agencies.

You can expect the following when working with Working Media Group:

  • – A high level of transparency. Working Media Group clients will be able to see their ROI for all marketing strategies and media channels.
  • – High-quality sentiment monitoring, so that they (and you) not only know what ads and content and being engaged with, but how those engagements unfold.
  • – A willingness to try experimental marketing ideas, live experiences, and more. With Working Media Group, you might find novel solutions that you won’t get elsewhere.

5) TubeMogul

For our last pick, we decided to choose something a little different from the agencies you’ve looked at thus far. TubeMogul stands out from the rest of the agencies on this list in that it is primarily a product line which you do your own marketing with as opposed to handing over the reins to someone else. If you already have experience or want more control as to your campaign.

If you’re worried that TubeMogul is just a platform, they also offer creative services and support, having videographers, designers and ad professionals on staff so your video content and outreach performs at the top level. Their creative team is very effective, and you will get advice and production that takes your brand and breathes fresh air into it.

TubeMogul is likely not the best fit for a lot of businesses, but if they sound like a good fit you should investigate them further.

You can expect the following when working with TubeMogul:

  • – A greater degree of autonomy for your marketing, if you have a general idea of what you want but just need help getting there.
  • – Economic and performance transparency at all levels to maintain accountability and allow for more informed decision making on your end.
  • – A fantastic platform that gives you the information you need at a touch and makes purchasing and managing ads easy.

Conclusion

YouTube marketing, whether you’re just starting or reinvesting in the practice, can be a daunting task that requires a great deal of expertise. For this reason, we ask you look into the above five companies to help guide your efforts.

How To Sell Your Software/SaaS Business in 2024

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By Robert Kale and Jock Purtle

In our 2021 Business Valuation Report, we analyzed the sales of 215 companies for the year 2021 from 7 different categories of business. Over the past few years, software has typically had a higher average multiple when sold, due to its recurring revenue and more attractive business models. Even though 2021 had a high number of high-value listings in the Ecommerce space, software was the #1 category on average multiples, with an average multiple of 3.63x for software business listings.

Here’s a quick summary of which types of business models are worth the most in today’s current market.

According to our data, software companies sold for an average of 3.63x multiple in 2021 – with the highest premium business selling at a 5x multiple. This specific business had $2M in earnings which contributes to the higher sales multiple.

With a valuation multiple like that, getting a great ROI is a no-brainer! With this information, it’s easy to see that investing in the software niche is smart business.

If you’re interested in selling your software company, the real question is: how can you get the best possible rate for your high-value business? And for investors: how can you make sure you’re acquiring a guaranteed winner when you find a great deal?

At Digital Exits, our valuation and vetting processes are second to none. Thanks to our exceptional appraisal resources, buyers know we ONLY offer the highest quality companies and sellers know they’re listing at the best possible price for the current market.

We’ve leveraged those resources to help high-value investors get the information they need to gain an unfair advantage over the competition in the software niche. Here’s what we found:

We analyzed the sale of 187 software companies over the past 7 years to help high-value investors get a competitive edge when buying or selling software businesses in 2022

Here’s what we found:

 

Average Sales Multiples Per Year

If you’re unfamiliar with the term “multiple”, this metric refers to how much a business is worth (also known as the company’s valuation).

The value of a business is calculated by multiplying the amount of profit a business makes, by the valuation multiple:

$ Profit amount x Multiple = Appraised value of the business.

If a Software company generates $350,000 in profit, and is estimated to sell at 3.2x multiple, then the business is predicted to sell for approximately $875,000.

$350,000 x 3.2x  = $1,120,000

Here is a quick summary of how much software companies were worth in terms of multiples over the past 6 years:

  • Average 2.37x multiple in 2014
  • Average 2.77x multiple in 2015
  • Average 2.90x multiple in 2016
  • Average 3.16x multiple in 2017
  • Average 3.34x multiple in 2018
  • Average 3.21x multiple in 2019
  • Average 3.24x multiple in 2020
  • Average 3.63x multiple in 2021

This gives us an average of 3.36x multiple over the past 4 years.

It’s important to recognize that net profit isn’t the only factor in determining value. In fact, valuation is greatly impacted by the size of the business as well. Let’s look closer at whether small or large sized businesses are worth more in this market.

Are Smaller or Larger Software Businesses Worth More?

Now we’ll look at our multiple per sales price. This indicates how the size of a business impacts its valuation multiple. We can use this metric to determine whether large software companies or smaller software companies are worth more overall, by analyzing what kind of multiples they are commanding based on their profit size.

Here’s how business size impacted the valuation multiple over the past few years:

  • In 2015, software businesses that generated $20K – $110K in net profit would fetch on average a 2.53x multiple. The businesses that did $115K-$600K in net profit would fetch 3.63x on average. Those were the two largest groupings for 2015 and they demonstrate the difference in multiple based on the profit size.
  • 2016 brought a similar trend but with a more drastic contrast. The smaller profit businesses (again the $20K-$110K range) only averaged 1.92x. The medium-sized profit businesses (up to $600K) would sell for an average of 3.37x.
  • In 2017, the data corroborated the same finding but with higher multiples all around: 2.28x multiple for smaller profit businesses and 3.88x for medium profit businesses.
  • In 2018 and 2019, you can also see the higher multiples for the larger-sized businesses:

2018:

Price Bucket Avg Multiple for Software
0-$250K 2.53
$250-500K 1.42
$500K-$1M 3.23
$1-2M 3.07
$2-7M 3.92
Over $7M 4.45

2019:

Price Bucket Avg Multiple for Software
0-$250k 2.2
$250-500k 2.45
$500k-$1 Million 3.76
$1-2 Million 3.54
$2-7 Million None
Over $7 Million 5.0

For 2020, you can see that the largest deal commanded the 6.4x multiple for the $2.5M in earnings, and the rest are mostly in the 3-4x range:

2020:

Price Bucket Avg Multiple for Software
0-$250k 3.95
$250-500k 1.83
$500k-$1 Million 2.89
$1-2 Million 3.29
$2-7 Million 3.65
Over $7 Million 6.40

For 2021, it’s apparent that the deals over the $7M price point commanded the highest multiples, with deals in the $1M-$7M range also beating the average.

2021:

Price Bucket Avg Multiple for Software
0-$250k 2.86
$250-500k 2.69
$500k-$1 Million 3.63
$1-2 Million 4.14
$2-7 Million 4.10
Over $7 Million 5.00

 

Multiples by price bucket:

 

So, if we look at a quick summary of the past 4 years in software business sales…

  • Software companies were valued at an average of 3.36x multiple
  • Software businesses sold for an average of $1,603,728
  • Software companies generated more than $145 million in transaction value combined

Now that you know the numbers — how does your Software business stack up against the current market?

Here’s How to Sell Your Software Business in 2022

The process of selling your software business will vary depending on the size of your company, but generally follows this straightforward process:

  • Get a valuation of your business so you know what it’s worth
  • Put together the prospectus (facts, figures and numbers about your business)
  • List your business on a high-quality investment platform like Digital Exits
  • Negotiate a price with potential buyers (or have an agent handle this for you)
  • Conduct due diligence to verify the buyer’s financials
  • Transfer all assets and money
  • Help transition the new buyer into running your business

If you want to find out how much your business is worth right now, our dedicated team at Digital Exits can help.

With decades of experience in high-value business investments under our belts, our appraisal and vetting resources are unmatched in today’s market.

 

 

Where Can You Sell Your Software Business?

 

Small Business Marketplaces

Smaller software business and micro-businesses are usually best sold privately by the owner through forums or classified websites.

To sell your small business, check out:

  • Flippa – Best for businesses under $100K in yearly profit

Broker

Medium-sized businesses in the $100K-$20M range are best sold through brokers who help with finding buyers and negotiating and structuring the deal. To sell your medium-sized business, check out:

  • Digital Exits – best for software businesses $100K – $1M in yearly profit

Investment Banks and Merger & Acquisition Companies

Larger software businesses with yearly profits more than $1M are best sold through investment banks or merger and acquisition companies. To sell your large business, check out:

  • Business Exits – best for software businesses making over $1M in yearly profit

 

We’ll help you get the most accurate valuation for your business, and match you with the best potential buyers in your niche.

Our specialty is connecting buyers and sellers in high-value transactions that represent only the absolute best companies on the market today. Buyers invest confidently knowing they’re getting the highest quality businesses, and sellers can relax knowing they’re listed among only the highest-value companies available.