#21 - How To Value, Sell and Buy Online Businesses
About This Episode
Shaan Puri interviews Joe Valley, a partner at Quiet Light Brokerage, about the technicalities of buying and selling online businesses. The discussion covers how to properly value a company using Seller's Discretionary Earnings (SDE), the advantages of SBA loans for acquisitions, and current trends in the e-commerce market.
Episode Description
Key Takeaways
Clean financial records using accrual accounting are essential for a successful exit, as cash-based accounting can significantly depress the perceived value of a growing business.
The SBA loan program allows entrepreneurs to acquire businesses with as little as 10% down, providing a 10-year term that makes multi-million dollar acquisitions accessible to individual operators.
In the acquisition process, trust and 'not being an asshole' are competitive advantages for buyers, as sellers often prioritize the future of their staff and brand over the absolute highest bid.