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 David Fairley
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.
Do You Know An Entrepreneur With A Story To Tell?
We’re constantly on the prowl for interesting stories from owners who have sold their businesses. We look for owners who have sold a business that was generating $1 million or more in revenue, who are willing to share their story candidly with our community. Forbes ranked Built to Sell Radio one of their top 10 podcasts for entrepreneurs and we have more than 100,000 downloads, so your story will get shared with a great community of like-minded owners. Nominate yourself or someone you know today.
At Built to Sell we’re all about shifting the balance of power from the buyer to the seller. If you support our mission, please write a review on iTunes—and if you have any comments or questions you can find us on Twitter and Facebook. Tune in every Wednesday for another episode of #BuiltToSell Radio with John Warrillow.
Hammocks.com was a successful online business, so when founder David Fairley put it up for sale, he was confident it would fetch a king’s ransom. Only problem? It didn’t.
Drew Goodmanson started Monk Development as a custom website development shop and evolved it into a product enabling churches to establish an online presence. With more than 300,000 churches in the United States, Goodmanson’s company took off and he grew it to more than $3 million in recurring revenue per year, leveraging the Software as a Service (SaaS) business model.
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