Selling Your Side Hustle
July 29, 2022 |
About this episode
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Jeremy Nagel started his entrepreneurial career teaching clients how to get the most out of Zoho, a popular CRM platform. Nagel began cultivating a small following on YouTube by sharing his advice for Zoho enthusiasts.
Given his status in their ecosystem, Zoho approached Nagel about creating an SMS plug-in for their application to allow users to text their clients while using Zoho. Nagel developed the application while keeping his day job. Despite only dedicating one or two days a week to its growth, the feature quickly became one of the top five applications in the Zoho marketplace.
Two years later, Nagel received a LinkedIn message from the head of corporate development at MessageMedia with a lucrative exit offer he could not refuse. In this episode, you’ll learn how to:
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- Identify new business opportunities inside pre-existing software platforms.
- Motivate your employees using an unorthodox technique.
- Build trust with your customers using YouTube.
- An innovative way to communicate with your advisor in the heat of a negotiation.
- Avoid making one of the most common mistakes owners make during due diligence.
- Leverage five-star customer reviews in a negotiation to sell your business.
Show Notes & Links
The Art of Selling Your Business
Definitions
Sellers Discretionary Earnings (SDE): Seller’s Discretionary Earnings, or “SDE”, is a financial metric used to determine the true historical benefit to the owner of a business.
Calculating SDE is a way to standardize or “normalize” a company’s earnings so it can be more accurately compared to the earnings of other companies and the industry as a whole.
Source: https://bit.ly/3zDMWs8
Due-Diligence: Due diligence is an investigation, audit, or review performed to confirm facts or details of a matter under consideration. In the financial world, due diligence requires an examination of financial records before entering into a proposed transaction with another party.
Source: https://bit.ly/3yYDfo5
Employer Net Promoter Score (eNPS): Employer Net Promoter Score, or eNPS, is a scoring system designed to help employers measure employee satisfaction and loyalty within their organizations. It is based on the Net Promoter Score system from Bain & Company, Satmetrix Systems, Inc., and Fred Reichheld, that gauges customer loyalty.
Source: https://bit.ly/3OIS4j3
About Our Guest
Jeremy Nagel
Jeremy is an indie hacker who focuses on building SaaS plugins for Zoho Marketplace. After selling his SMS plugin, Smooth Messenger, to MessageMedia, he continues working on making SMS on Zoho even easier to use. On the side, he is working on a work-life balance app for freelancers and entrepreneurs: https://focusbear.io
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Rory Fatt began his entrepreneurial journey running marketing seminars for restauranteurs. After several owners approached Fatt to do their marketing for them, he decided to launch Royalty Rewards in 2005.
The business was a multimedia marketing platform that helped small businesses market their products and services by rewarding loyal customers. The company took off, hitting just over $2 million in revenue in its first year.
Inspired to achieve financial freedom, Fatt began to explore selling his company. In 2022, he accepted an offer from Schianti Partners that would set his family up for life.
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By now, you’re accustomed to hearing John Warrillow ask the tough questions.
Every month, we turn the tables and grill John on his favorite anecdotes and transferrable lessons from the latest batch of guests on Built to Sell Radio. In this episode, Dr. Jeremy Weisz gets John to reflect on what stood out, any missed opportunities, and how each story imparts the Built to Sell Methodology.
How To Sell A 12 Employee Company For 8-Figures
James Ashford had a burning drive to become an entrepreneur and start a successful business. After a failed attempt to grow a marketing agency, Ashford knew that to build the business he had always dreamed of, he needed to make some drastic changes.
In 2016, Ashford took what little was left after his business failed and invested £4,000 in developing proposal software for accountants which he named GoProposal. By 2020, GoProposal was a slick application with £1.5 million in revenue and hundreds of accountants using it. That’s when Ashford agreed to be acquired for a healthy 8-figure sum.
The Inside Story Behind Sage’s 8 Figure Acquisition of a 12 Employee Company
In 2016, Ashford took what little was left after his business failed and invested £4,000 in developing proposal software for accountants which he named GoProposal. By 2020, GoProposal was a slick application with £1.5 million in revenue and hundreds of accountants using it. That’s when Ashford agreed to be acquired for a healthy 8-figure sum.
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In 2001, Haroon Mokhtarzada and his brothers started Webs.com, which allowed anyone to build a professional website. Eager to grow the company, they decided to raise money from a venture capital firm – a decision Mokhtarzada would later regret.
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Selling to a Publicly Traded Company
In 1988, Tony Falkenstein started Just Life Group, one of the first water-cooler companies in New Zealand.
In 2016, Falkenstein identified the need to diversify into new service offerings and opted to start acquiring companies. Since then, Falkenstein has acquired six businesses, aligning with their overall focus of enhancing lives through healthy living and healthy homes.
In 2017, John Whiting started Digital Kryptonite with the goal of providing business owners with more leads. Helping his clients mine LinkedIn, Whiting quickly grew his company from zero to seven figures within a year. The company saw massive growth month-over-month when suddenly Whiting received a message from his credit card processor that his account was being shut down.
Although 98% of Whiting’s customers were happy, 2% were not, which led to a greater dispute rate than Stripe allowed. This ultimately led to Whiting being placed on the Match List, which inhibited his ability to process payments. Suddenly, the seven-figure business Whiting had built was in jeopardy.
With little faith left, John received an email from a friend asking to buy his company. In his own words, it was a “lifeboat,” and Whiting jumped on with both feet.