Ever thought about selling a business as a side gig? You’re not alone.
You start or buy a business, nurture it for a while, then sell it for a profit. Not too complicated, right? Not to mention how lucrative it is as a secondary income stream!
This guide covers everything you need to know about selling businesses, including how much it can earn you, why you should consider it, and the problems you may face.
- An Overview of Selling a Business: A Primer
- How Much Can Selling a Business Earn You?
- How Much Does It Cost to Start a Side Hustle Selling a Business?
- Where Can You Find Businesses to Sell?
- Why You Should Consider Selling a Business as a Side Hustle?
- Problems With Selling a Business
- Frequently Asked Questions
An Overview of Selling a Business: A Primer
Selling a business for a profit is one of the best side gigs if you want to make a decent amount of cash in one move.
It might need a larger time frame than other side gigs, but the outcome is worth the wait.
You could either start your business from scratch or buy one that’s already up and running.
In both cases, you’ll have a business you can work on for a while and sell it for up to six times its annual profit. It just needs patience and strategizing to land the perfect deal for your business.
How Much Can Selling a Business Earn You?
There isn’t a set ratio or benchmark to how much you could make off of your business. However, the average ratio is between two to four times the SDE’s, AKA seller’s discretionary earnings.
So, if your business makes an annual cash flow of $100,000, you could sell it anywhere between $200,000 and $400,000, depending on the business valuations. However, some businesses could make up to six times their annual revenues.
The sale price of your business is valued based on its performance, industry trends, and most importantly, your negotiation skills. The more solid and lucrative your business is, the more profit you make off of it.
How Much Does It Cost to Start a Side Hustle Selling a Business?
The first step to start a side hustle selling businesses is to either create a business from scratch or buy one and flip it.
To do so, you’ll need to have enough capital to fund your new business and get it ready to be sold.
If you can’t afford a business but still want to pursue this side gig, there’s a solution. Check out if your business idea qualifies for small business grants provided by the government.
The same applies to buying an existing business. Even though it’s cheaper when comparing the overall costs, you still need to have a large capital to invest in a new business.
Where Can You Find Businesses to Sell?
As an entrepreneur and a business owner, it helps to know the basic business terms to professionally pitch your business to prospective buyers and negotiate prices with them. That way, you’ll be able to build a solid plan and successfully sell your business to the right crowd.
Where to Independently Sell a Business
There are two routes to choose from when it’s time to sell your business. You either hire a business broker, or you sell it yourself.
So, which one is better?
If you’re selling your business to a trusted friend, relative, or even an employee, you won’t need a business broker. You could sell them the business yourself and save the money on broker fees.
Otherwise, hiring a broker will help you get the highest price, since it’ll reflect on their commission, and handle all the logistics for you.
Gig Economy Companies to Sell a Business
If you want to sell your business but you’re not sure where to find the ideal buyer, we’ve got the answer. There are plenty of business broker sites that would help you reach potential buyers and sell your business with ease.
Additionally, if you’ve ever wondered where to buy an online business to resell it again later, these platforms are your go-to. You’ll find business sellers posting plenty of lucrative unusual businesses that will spike your interest.
Some of the best business broker sites for selling businesses include:
Each one of these platforms is suitable for different types of businesses, both on-ground and online. So, consider looking through their features and sell your business on the platform that best suits its nature.
Why You Should Consider Selling a Business as a Side Hustle?
- A Large Profit: Selling and flipping businesses is a very lucrative side gig, especially if the business you’re selling is making a decent annual net profit.
- Take Up New Projects: Buying and selling different businesses allows you to start a new adventure with every new project. Once you successfully sell your current business, it only means that you’re now available for the next exciting challenge.
- Create Wealth and Retire Early: With the large profit you get with every sale, you can build your wealth in only a few years and enjoy the rest of your life, spending your money as you wish.
Problems With Selling a Business
- A Long Procedure: The whole process of buying and selling a business takes time. You need time to improve the business and increase its professional valuation, and you need even more time to find the right potential buyer.
- Expensive Legal Costs: Expect to pay from 4% to 10% of the business’s price as a business broker commission fee. Selling larger companies, however, requires smaller commissions than smaller businesses.
- Negatively Affect Employee Morale: One of the main issues of selling a business is that it affects the sense of stability for employees, even if it’s sold to a qualified buyer. They will no longer feel that their job is in a safe place, which will definitely affect their morale. Many of them might even quit.
Frequently Asked Questions
What Is the Best Site to Sell Your Business?
Which Form of Business Is Easiest to Sell?
Businesses that are related to health and wellness, technology, real estate, or education are always in demand. This makes them some of the best businesses to buy and invest in because their services and products are timeless and sustainable.