5 (Sobering) Lessons from the Sales of Hammocks.com
December 22, 2017 |
Want to increase the value of your business by up to 71%?
Take the 13-minute survey and get your Value Builder Score
About this episode
Subscribe:
David Fairley estimates he has sold more than 20 online properties but admits it was the sale of Hammocks.com—one of his first exits—that taught him the most.
Fairley had grown Hammocks.com into a seven-figure website with a pre-tax profit of more than $300,000 when he decided to put it up for sale. He received a “low seven-figure” offer and agreed to meet with the buyer.
That’s about when things started to unravel.
The buyer questioned Fairley’s bookkeeping and dropped their price to around $700,000. Exhausted, Fairley felt cornered and decided the only thing he could do was to accept the lower price.
In this cautionary episode, you’ll learn:
- How acquirers use an opening offer to bait sellers into a conversation
- How sloppy bookkeeping can derail a deal
- The dangers of over-valuing your business
- The worst time to sell your business
- The tell-tale sign that an earn-out contract will never be paid
Are You Tired of Always Carrying Your Company?
One of the reason Fairley agreed to a lower acquisition price was that he was exhausted by the weight of single-handedly running a seven-figure business. Is your business too dependent on you? If so complete the Value Builder questionnaire to identify some quick ways to free up more of your time.
About Our Guest
David is a serial Internet entrepreneur who started a hammock importing business back in the early nineties which he expanded online, establishing an early internet presence that eventually became Hammocks.com. After selling this company, David went on to personally develop, buy and sell over 60 website businesses in multiple niches and of various business models including strollers.com and unicorns.com.
David started WebsiteProperties.com as the first online business brokerage that specializes in selling established and profitable Internet based businesses. For over 12 years, he has helped over 500 internet entrepreneurs successfully sell their business.
Related to this topic
From Nothing to $25 Million in 12 Months
SnapSaves was created by Buytopia, which has a deal-of-the-day business model similar to Groupon. Started by Michele Romanow and her partners in Buytopia, the idea was to let shoppers snap a picture of their grocery receipt using the app.
In this episode, Stephan Spencer details three strategies he pursued to withdraw from his business’s day-to-day operations. By 2010, he was able to take a six-month sabbatical which ultimately lead to a sale in 2010 with only a six-month earnout.
The Acquisition of the Company Behind Chicago Bulls Sunglasses
If you own Chicago Bulls sunglasses—or sunglasses from just about any other NBA team—you owe your eyewear to Jason Bolt.
Derek Sivers sold CD Baby for $22 million dollars and decided to do something interesting with the money.
How Amazon Became a Blessing and a Curse for Beast Gear
Ben Leonard is a fitness enthusiast who found himself in bed with a heart problem in his early 20’s (he’s fit and healthy now). His doctors told him to rest. Said not to go to the gym, he cleared out his bag and noticed some of the accessories he used had worn out prematurely.
The experience sparked an idea. Leonard decided to launch a brand of fitness accessories made to last longer and cost less than the alternatives. He named his fledging company Beast Gear. He borrowed around £1,000 from his father and ordered 250 skipping ropes with the Beast Gear logo emblazoned on them.
The Humble Yogi Sells His Business
Along with three friends, Sebastian Johnston co-founded TheAmazeApp in 2014. The idea was based on a simple idea. Social media influencers could upload a picture of what they were wearing and tag the clothing on TheAmazeApp’s database of e-commerce retailers. Then, when one of their followers purchased the item, TheAmazeApp would receive a commission they shared with the influencer.
Would you rather have one million dollars in the bank today or a chance to have ten million a decade from now? It’s a philosophical question that comes down to the time value of money and your tolerance for risk.
The One Question You Never Answer
, a T-shirt business he quickly scaled from start-up to sale in 18 months.
The Inside Story of Petco’s Acquisition of Shark Tank-Featured PupBox
Like many young couples, Ben & Ariel Zvaifler got a puppy and found themselves trying to figure out how to train it. They wondered what toys were safe and what kind of food to give to their brand-new puppy.
The couple figured they weren’t alone and decided to launch PupBox, a subscription box for new puppy owners that offered owners training guides, treats, and toys for puppies appropriate for their age and stage of development.
From Food Stamps To A Seven-figure Exit
While Michael Pedone survived off of food stamps as a kid, he dreamed of living a lifestyle where money wasn’t scarce. Fast-forward a few decades, and Pedone sold his first company for $1.2MM.
The Man Behind the $1.3B Sale of Wind Mobile
Anthony Lacavera has started 12 businesses, six of which he has exited. His exits have ranged in value from the $6 million he got for one of his recent start-ups to the $1.3 billion that Wind Mobile sold for.