Related Book Chapters & Interviews
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.
It can be intimidating to see large companies that seemingly have more bandwidth and can eat your lunch without trying, but it’s important to remember that being small gives you strengths those other businesses wish they had again.
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.
Of all the activities that can destroy a business before it starts, how you assemble the team is one of the most difficult parts. Don’t choose partners and cofounders haphazardly. Take your time.
More and more businesses operate with some degree of transparency. But how do you know if it makes sense to run your business transparently? Make sure you weigh the pros and cons before deciding one way or the other.
You may have asked friends, family, or strangers if they would use your product. You may even have asked if they’d pay for it. But until you ask them to enter credit card information, any assurances they gave you are worthless.
Valuing a SaaS business is fairly straightforward, but there are some ways you can work to improve your valuation.
It’s handy to have some money set aside to get your application off the ground, but you may need less than you think. More importantly, you may have a lot more options for gathering that money. Make sure you understand the pros and cons of whichever path you choose.
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.
As a founder juggling multiple tasks, it’s easy to forget about the business in the face of all of the other product decisions, but you have to factor business and operations into your decisions now.
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.
Ben and his co-founders started Honeybadger after a bad experience with an existing exception tracking tool. With a focus on customer service, they’ve successfully bootstrapped it into a healthy and sustainable full-time endeavor.
Scott Nixon is the co-founder of Meal Mentor, a subscription-based vegeterian meal planning service. Scott handles the technology side of the business and works to keep the operational side of things humming with software.
Matt and I talk about running a SaaS business after acquiring it, the mistakes they made early after taking over Churn Buster, and the common ways that SaaS businesses get dunning wrong and how they can do better. We also talk about the value of iteratively improving automation for tasks and how important it is to clearly document and explain manual process.
Rachel and I talk about what it’s like supporting self-hosted software, juggling a busy travel schedule to make time for work. She’s been working on Perch with her husband Drew for eight years, and they’re still going strong.
Tracy and I talk about her experience building and running Wedding Lovely, raising some funding for it, losing a co-founder, and even going through a heart-breaking acquisition process with Etsy. Through it all, she’s kept going and even published books to help others build their own web applications. She’s a brilliant example of someone that simply won’t give up, and while there’s no IPO looming, she’s making a great living doing what she loves with a small team.
Josh and I discuss what it’s like going from a bootstrapped small team to a team of 30 in a funded startup. We touch on what it’s like going from being a lifelong business owner to being an employee of a large corporation experiencing huge growth. And we talk about some of the differences between building a small profitable business and hitching your wagon to venture capital. Simply put, Josh brings some great perspective and deep insight to building and running software businesses.
Recently I sat down this Thomas Smale of FE International. Thomas and FE International helped me sell Sifter and made the whole process seem easy. After selling so many online businesses, FE International has the process down to a science, and they’ve been able to pick up on quite a few trends. So Thomas takes some time to share what they’ve seen and what matters when it comes to buying or selling an online business.
Nathan and I talk about the early days of ConvertKit, reaching a point where he had to make a decision to invest more significantly in it or walk away. He invested a significant portion of his income from other projects and really doubled down to make it work long before it was obvious things were going to take off. He talks about his sales process and how it simultaneously helped him better understand the needs of potential customers as well as build a relationship and find his first customers.
Courtland’s story is great because he’s been on a bit of the roller coaster, and now he’s starting fresh with Indie Hackers. He’s interviewing other founders of businesses of all sizes and helping to shed light on what’s possible for small independent software-based businesses. At the same time, the stories are also grounded in realistic stories of slow growth and hard work instead of just focusing on those businesses that hit the jackpot. Courtland’s past experience combined with his discussions with other founders has given him some great perspective and insight on what works and doesn’t work for small software businesses.
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