A couple of weeks ago I sold ProCasts.co.uk, the screencasting business I built over the last two years. Some of you know that I moved away from the business back at Christmas and left it idle (a rather silly thing to do), here are some notes on how I sold it and how you could sell your business. This is my first business sale, some valuable lessons were learned.
I listed the business on flippa.com a month back, flippa specialises in matching buyers and sellers of domain names and small businesses. Since ProCasts was, after 8 months of inactivity, essentially a website that generated leads with a client list – I figured a listing on flippa would find some interested parties. I didn’t sell The Screencasting Handbook, I’m still happily developing the Handbook’s sales.
The new owners are Tintisha Technologies, a Leicester based video production company who wanted to expand their screencasting brand. Rich of Tintisha discovered the ProCasts sale through flippa by (happy!) accident, made a couple of bids at the end of the auction and came out on top. We completed the handover last week.
The reason for selling ProCasts was simple – I’d moved away from screencasting back at Christmas as I’d decided to return to my historic trade of artificial intelligence research and data science. I knew that a few of ProCasts’ competitors might be interested in the site and that a listing on flippa with money sent through escrow.com would make for a clean, safe sale.
I listed the site as an “Established lead generating screencasting site” with a two week auction. Flippa works differently to eBay – it uses an open auction (though private sales are possible) with a rolling end-time (if a bid is placed within 4 hours of the end of the auction the end time is advanced by another 4 hours).
Take a look at the listing to see the details that I included, I added:
- Full business and site description
- Details of past clients and warm leads
- Bank statements to prove income
- Verified Google Analytics traffic data
- A Transfer Agreement listing all assets/processes for the sale
I made a point of responding to all questions (lots came via the private email channel) and updating the listing with new information. Fortuitously a couple of older leads came back with requests for work during the auction so these ‘very warm leads’ got a mention in the comments too.
At the end of the day the site sold for $4,002 (£2,500), minus the sale fee (£100) and escrow.com’s fees I took away £2,400. Not bad for a site that was otherwise of no value to me but obviously not an ‘interesting exit’.
Here are some of the takehome lessons:
- If you’re selling a business, a pure consultancy (with no consultants) isn’t super interesting to buyers, only to existing market players
- Building a consultancy in a super-small niche (when I started I had 4 US competitors and 0 in the UK) means few buyers when you decide to exit (in fairness – I didn’t build the business to sell it, I know better for next time)
- Design your business with an exit in mind – recurring or passive income has real value to a buyer, make sure you can be removed from the business without damaging it
- A two week auction was fine but four weeks would have made more sense
- Soliciting private bids from competitors should have been done sooner rather than later
- Adding a product or recurring income stream to the business would have added a lot of value (I decided to keep The Screencasting Handbook as an experimental platform)
- BusinessesForSale is an alternative site, I didn’t know about it when I started, their companies tend to have higher value (flippa isn’t really for consultancy businesses, just simple web businesses)
Some of you know that I’ve been working in the field of artificial intelligence research for industry over the last 10 years (as both senior programmer, product designer and pure r&d bod) in my Mor Consulting. This role is evolving and I’m turning into a “Data Scientist” (the new shiny term for A.I. researchers!).
I’m also building some new IP by way of web services using A.I. technologies, these are designed with an exit in mind (I’m learning!). If you’re curious about using A.I. in industry see my new A.I.Cookbook.
I’m also continuing to develop The Screencasting Handbook, it is a useful experimental platform and I still very much enjoy teaching the art of screencasting.
If you have any questions, ask away.
Ian applies Data Science as an AI/Data Scientist for companies in ModelInsight and in his Mor Consulting, sign-up for Data Science tutorials in London. He also founded the image and text annotation API Annotate.io, lives in London and is a consumer of fine coffees.