A hobby can turn into a business. After all, work shouldn’t be “work.” Chris Guthrie spent his evenings blogging and it turned into his full-fledged job. His business excelled. It didn’t take long for him to work with an investment banker and find the perfect buyer for his home grown company.
In January 2009, Guthrie started his site, netbookreviews.com, which was dedicated to reviewing laptop computers. It was a quick success, so he decided to spend more time building out the site for a sale. His story is an example used on Plan for the Sale, an online educational tool used by entrepreneurs to help them learn how to plan for selling their businesses. Selling the site would allow him to work on other projects using his pastimes. Using an investment banker, his afterhours activity quickly sold in November 2010.
“It’s an example that you can kind of build something that’s a pretty sustainable income stream if you really kind of focus in and spend a few hours after your typical day job to really kind of work on developing your own business,” says Guthrie.
He valued the power of networking. Attending conferences and reaching out to others in the same industry, especially owners who are where you would like to be, can only help the sales process. It can also help you find people to assist you with a sale.
Guthrie connected with Zane, his valuable investment banker. Using his services, Guthrie was able to find the right people with the right funds. In his case, finding a banker was a good move.
“Really, they bring the buyers to the table,” says Guthrie. “My site was on the smaller end of the side, but they’re able to get access to those businesses and people that have a lot more money that are able to make a purchase decision and close the deal like that.”
Zane also had the responsibility of getting the best deal and keeping everyone pleased. Guthrie could also tell that the sale was on a quick timeline. That didn’t bother him, but he was a little weary about the final sale price.
He also says a banker wants to get a sale done, and it is apparent. But they also want to make sure a seller is getting the best deal and that all parties are satisfied.
“It was still kind of fine by me,” admitted Guthrie, “because I knew that in general there were sites that were going to be a little bit lower multiple because they don’t have as much age and then other aspects can kind of control the multiple as well.”
The site sold around Black Friday, which meant it was going to gain a lot of holiday shopping traffic. Guthrie had an employment agreement that kept him working six months to help with the ownership transition. An employment agreement kept him in the business picture so he could phase out after the new owner got their bearings. When he looks for a buyer, he makes sure that he can easily work with them and that they have a passion for the end product.
“I’m looking for people that had the same passion that I had for the niche that I was working in because then I know that they took good care of their site and that they were trying to build up something that was different. Not really trying to cut corners and other stuff like that,” says Guthrie.
Though he wishes he would have waited a little longer to sell so he could create a larger bundle of sites to sell, he was happy with his buyer and the smooth sale. He was able to create a new hobby—selling sites.
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