If you're interested in buying and/or selling small projects, you can typically expect to pay more than $5k for something that's making any consistent amount of money.
You're also unlikely to find a great deal on a really special project on a marketplace. People who post on marketplaces like Flippa or MicroAcquire or SideProjectors (there're dozens of them) have either:
1. Realized the time it takes to maintain is not worth the revenues/profits
2. Realized the income is not sustainable and are trying to cash out at the end of a great run
3. Realized that some folks are willing to pay very high multiples and will list their projects at prices most (but not all) people will balk at.
If you're really interested in taking over a project that's profitable, network with people, do cold emailing, and find opportunities to take over projects that the owners are simply not interested in any more.
In other words, look for the elderly couple who is ready to move on from owning their profitable, outdated shop.
There are a lot of reasonable reasons people would list a sub-scale business on a site like those. Some examples:
Take an app that makes $500 net monthly and requires 1-2 hours per week of work. Solid hourly rate, why sell? Except:
- Sudden change in family responsibilities leaves founder without the small amount of time needed.
- The business might net $5k in a sale, and the founder has an urgent need for cash (for ex for home purchase/repairs). The founder resigns to a fire sale because she needs money now.
- Founder realizes the business will remain sub-scale until someone injects another $50k. Founder has a day job but not $50k, and has no interest in raising money.
- Founder's job reviews side project and decides it's too close to "competitive" and asks founder to dispose of it.
- Founder takes a new job that prohibits side gigs.
- Founder gets sick and isn't able to maintain the business.
- Founder gets divorced and is ordered to split the value of the business with ex-spouse. (A sale may be the founder's only option to produce the cash.)
- Founder built the app using tech X 3 years ago. Founder now viscerally hates tech X and would rather have $5k than keep using that tech.
- (Edit: adding this one) Founder was just learning business when they started this business, and now wants to aim bigger. This business could be a good starting point for someone else in their personal development cycle.
Basically, there are a lot of reasons a founder might sell that have nothing to do with the business or its prospects. There are also reasons that have to do with the business not being a fit for the founder at that time. Due diligence is key when buying anything.
I am in that last category myself. I had a really nice and useful budget app that had thousands of daily users and cost all of $20/month to keep going, if that. Was making some money off it too with ads and sales of the ad-free version. Except I built it using Ionic back when it was based on Angular 1. Fast forward to now and that code simply doesn’t compile anymore against modern iOS and Android and I don’t have the time to rebuild it. With some TLC it could have been something but at this point all I’m doing is sending replies to customer emails explaining why the app isn’t available anymore. Lesson learned: JavaScript frameworks ruin lives.
Not just javascript, I built an app in Objective C. It stopped working after IOS 8 (I think) and I no longer had access to a Mac to update it. I too am in the stage of just replying to customers to explain why it isn't available.
Last I checked it was making about $100 every 3 months with the dwindling usage and all. The app took me probably a solid 80 hours of work to put together. I do not know if hiring a developer to work on it would in any way be worth it.
Sure. https://family-fortune.ridgebit.com/ Is the promo page. As I said, this is a bit of a lego project with a bunch of pieces spilled on the floor. Email is in my profile if you are actually interested.
I sold an app with good traction for $20k. Part of the reason was we hated the users. We built a diet community and that community was literally toxic - they'd encourage people to follow crazy diet approaches that would make them pass out and they'd group attack anyone who brought up medical evidence that this was a misinterpretation (including me, our suppliers & our dietitian).
The company that bought it got sick of the users within a few weeks but unfortunately their attempts to pivot and rebrand didn't work.
I'm very sorry you had that experience and I respect your morales. I shy away from community style projects for similar reasons, and a lack of safe-harbour laws makes them extra risky.
Those are good reasons to motivate a seller. But the main problem with small transactions is that the buyer's costs/risks in making an investment can eclipse the "inherent" value of the project.
Consider that theoretical 2h -> $500 / month project:
- Would those 2h for the founder be 2h for the buyer, or much more?
- How much initial training would it take for the buyer to sustain those economics?
- Are those 2h sufficient to protect / grow the business in a changing market, or just an instantaneous rate?
- Are the assets of the business actually secure? (unambiguous ownership / confidentiality, etc.)
Those are all pretty big unknowns, and even if the founder is confident about them the buyer would spend significant effort to verify -- very possibly more than the $5k sale price. It might even be cheaper (incorporating risk) to build a $500 / month business than to verify the purchase of one. Small projects have to sell at a VERY unfavorable discount to counter this.
The exception are buyers who make their own business out of efficient diligence and exploitation for many similar projects (like high-traffic sites for a single community). If you fit into such a category, it is probably better to find a specialized marketplace or a buyer with a reputation than attempt to sell in a broad market.
The questions & considerations you ask are all valid, and are generally included in the buyer's evaluation process. Every point is extremely subjective and not precisely knowable. That's part of the fun of business!
But you are obviously correct that there are no risk-free transactions.
> It might even be cheaper (incorporating risk) to build a $500 / month business than to verify the purchase of one.
Here I want to point out that I know a number of talented people who want to launch a business, but for whatever reason cannot get to the "launched, accepting money" phase of their projects. These people have no problem improving an existing business, but have trouble going from 0 to 1. (I believe this population is as much as 100x the population of people who have successfully launched & gotten revenue in an app.) For these people, it might be entirely worth knowingly overpaying for a working SaaS because it gets them past the launch phase. Putting it bluntly, would they rather spend $10k on an app with revenue that you can grow or another $50k of nights and weekends over the year with no launch to show for it?
Edit: I also forgot that there's the entire category of buyers who just want to keep the app as-is and either integrate it into a bigger suite, use its traffic for lead gen, or otherwise leverage it for some other purpose. If the buyer considers the purchase as part of its marketing budget, $5k is not very much at all. (Plus the bar is low as most marketing spend is wasted, see the adage.)
All valid reasons, but I think my point was moreso if they find themselves posting on MicroAcquire, they will likely end up in my #3, whether they intended to or not, and rightfully so.
Maybe the multiples only seem high to you, and others are anchoring on other market assumptions? (Different market assumptions being a key driver of trading in many things.)
Markets are crazy right now, and #3 could fairly describe transactions in the stock market, housing market, commodities market, etc. occurring now.
Also for sub-scale businesses, it may not be useful to value them based on revenue or profit multiples. For example, if the app is not making much money because there's been no money spent to promote it, how can one know if it's "expensive" or not? I might instead look at it and decide that I would need to spend $25k on development to build the app, so spending $5k to accelerate launch is cheap. Value really is in the eye of the buyer.
Just to echo this, I recently had a lovely conversation with a guy building a business he knew would be irrelevant in 10 years with the goal of selling in 3 years to someone who didn't realize that.
I will never buy a business, real estate is a much safer bet.
First is the large capital outlay as compared with a small web project, which means many more eggs are in that one basket.
Second is the slow turnover, which means that you may be waiting for years for a good property (since if it's a good property, there are only a few situations where the owner would sell), and if you choose poorly, you will be stuck with the poor property for many years (as no one would want to buy it).
Third is you will still have to watch out for your property becoming irrelevant, for example for a retail store, either due a downturn in the trendiness of the neighborhood driving out business, or perhaps undesirable construction in the area (e.g. a mall across the street that takes all your foot traffic).
Really the safest way to invest in real estate is through REITs, where the risk is spread across many properties.
A mall across the street pretty much universally increases the value of existing retail in the area due to increased car traffic. But the mall across the street shutting down or converting to non-retail use would fit.
Not universally true. Depending on points such as competing stores in the mall and the parking situation, number of customers can decrease for the store outside the mall. For example, you are a cellphone store with no parking and the mall will have 3 cellphone stores and a giant parking structure, the mall will hurt your business.
Yeah that's messed up. Any time you're buying anything, but especially a business, you need to do your due diligence.
Perhaps I'm naive, but I think your risk in buying a business goes down if the current owner under-appreciates what they have, and you have the skills to do it better than them.
> your risk in buying a business goes down if the current owner under-appreciates what they have
This is completely true, my sentiment is more for the idea of a "turn-key business" acting like an annuity. I don't think every business for sale is going down but I think there's a large enough risk case that I'd rather avoid it.
Don't you think that's a bit of an extreme statement? There must be a price where the price-to-risk ratio makes it worth it. Nothing is 100% certain, after all. Every investment has some amount of risk.
Or don't have the time. I have/had profitable projects that don't take much time, but they'd be more profitable under someone who isn't spread as thin.
This is why I sold a website making about $150/mo in ad revenue for $5k. I knew the site could make more, but had other things on the go and I couldn't spend the time on the site to improve it.
The person that bought it from me did make those changes and did make more money, but I just didn't have the time to get there. Win-win for me
Anyone with time for SEO/content work, general outreach and so on, could definitely capitalise on these opportunities. Many people building these projects don't have the time or interest in the more social side of it.
I know web development and my wife has been hankering to learn SEO / web analytics on her own. I would definitely buy spend 5-10k even if it is just so she can get some real world experience learning SEO in the real world.
There’s loads of online courses and even free YouTube resources where you can get started for free. Learning from the ground floor with something you built from scratch is far more illustrative IMO.
I was about to post a question about sale prices as a multiple of revenue.
Someone bought it with 2.7 years break even ? Assuming close to zero ongoing cost + labour. That’s surprisingly high
I expected a .5-1.5 for micro sized revenue
That last one is exactly what a friend of mine did. IIRC, he contacted a business broker and told them what he was looking for and they found the company.
He bought a literal Mom & Pop outfit that made thermocouples for a specific application. The "Pop" was going blind and Mom wanted to retire. They were barely making money but my friend realized that it was mainly because they were underpriced and their marketing was nonexistent.
He bought the business for a song and immediately called all the customers and told them he was raising prices to market rates. After turning things around, he sold the company about five years later for a healthy profit.
Any suggestions on the other end: where to sell a business that is both profitable and should continue to be? Asking for a friend who is looking to retire in the next couple years (at the normal retirement age).
No shame in my #3 above. I'm not an expert, but typically multiples range from 1-4x annual profit, but I've heard through the grapevine that some folks are paying 5-10x. So absolutely list on MicroAcquire.
If it's very profitable, then they might consider talking to FEInternational (or another firm like them). They take a cut, though. But they do pay referral fees, so make sure you get that cut!
Edit: Before someone says I'm crazy for saying things sell for 1x annual profit, I'm not saying that's typical for a brilliant business. It's more typical for something with heavy maintenance, or with really low profits. If you're really interested, check out the link in my bio.
For a business that is all about monthly recurring fees, rather than an annual multiple a big part of the consideration can be the customer acquisition cost in the industry. If I have a similar company already, I'll pay you up to somewhere around what it costs me to acquire the same number of new customers some other way. If you have 10,000 subscriptions and it generally costs me $5 per customer to land new subscribers, $50,000 makes a lot of sense. Much less than that is a real bargain. Much more and maybe I just spend the money marketing to your customers instead, depending on what other assets come in the deal. This is largely independent of what your subscription fee is.
I have a niche iOS app that makes between $200-400 monthly. I would sell it to someone who would continue to grow it because I would rather build new things than continue to add content to the app.
In this specific case I would sell at a lower multiple to someone in the niche community. The amount of money to be made by selling someone who wants to exploit the userbase isn't worth tarnishing my reputation and subsequently shooting future projects within the same niche in the foot.
I've had an interest in taking on a project for a while and your comments have sparked something for me. I'd be interested in chatting with you about your project if you'd like. I'll buy a coffee/beer/tea/beverage of choice just for the trouble of a call. Contact info in my profile if you're interested!
A friend of mine is doing this as his day job through MicroAcquire. He's bought a few businesses so far and is writing a blog about his experience: https://microangel.so/
So far, it looks like he's having fun but putting in a lot of work. He seems to be doing a lot of little code updates and fixes when apis change or other little things break.
I feel like the trick must be if you can amortize some of the maintenance costs across multiple projects.
Maintaining DNS records and SSL keys is not 3x as hard for 3 domains as for one. Probably neither are taxes. Or keeping on top of security fixes for projects using the same tech stacks.
There’s a couple groups out there who do something like this for public sector projects, sort of taking over the devops aspects and keeping the lights on. And in that case creating project generators could be feasible as well, because it’s easier to run a project that’s built the way you prefer them to be built.
Yeah and you can leverage learning across projects also. Find a marketing strategy that works well for one of the projects, then deploy to the rest.
And one can share the cost of outsourced labor down the line. For example one customer support agent, software engineer, marketing person could work across all products/businesses, which might together fill near a full time role. It is often terribly hard to hire good part-time workers for many roles.
And with a diverse portfolio the risk of high impact business failures should go down also.
More tickets for potential buy-outs from bigger companies also, those can often be quite random, so more chances is better chances.
Not to mention you can leverage skills learned from earlier projects, greatly accelerating your progress. For example, if your project relies on content marketing, perhaps you learned to write quickly and produce enticing YouTube videos, and outsource effectively to remote writers (all skills that take dedicated time and effort to get good at). You can definitely leverage that and speed up your progress.
The problem with your website is that you accepted bunch of low quality, no value websites made in 7 minutes and selling for thousands of $$$$. Which make hard or impossible to find real quality projects.
That's why curating, reviewing, examining real projects is needed in order to keep the quality and not quantity.
I'm curious if there's a market for people who want to buy small projects like this. I imagine there's a lot of projects that are already on GitHub with a small following with owners that would like to cash out, but I'm not sure there's a market of buyers looking to pick up repos?
I’m a buyer in this range. I’ve bought various small online tools that either weren’t monetised or weren’t monetised well, then I just put a small amount of effort into tidying it up a bit. Zero goals to “go big”, each just brings in a bit of pocket money.
If you compare the typical big-money SV-style startup sales to be like people building/flipping properly, this would be the equivalent of fixing up and flipping cheap cars or furniture. It’s a fun side hobby that makes you some extra spending money, not something to make you rich.
Depending on what it is, I would certainly be a buyer. There are a lot of niche projects that I know nothing about but I am good at picking up on a topic and making projects successful once I find the niche and get into it. $5k seems right and if it’s a thing that can be profitable then yeah it seems like a good investment amount.
There is a bunch of small tools that exist online (base64 encoders, hash functions, SPF rule generators, etc). Most of these wouldn't make much money, maybe enough to cover hosting.
I could imagine someone basically picking these up and collectively monetizing with ads, or other methods. Likely not suitable for a massive business, but likely able to sustain a sole operator or even a small team if operated frugally.
> Most of these wouldn't make much money, maybe enough to cover hosting.
Do you have any personal experience or any other sources that estimate this kind of thing? I'm legitimately curious, I've often wondered what kind of revenue these types of things pull in. Obviously if they're not running ads and don't have any explicit monetization then it would be very little. But I always wonder about the ones that do.
I'd imagine hosting would not be resource-heavy so <$2/mo, that's why sites like these don't really need ads as the cost of hosting is negligible. is there any way of generating revenue other than plastering a load of ads onto a website? because doing so would cost a great number of users
I would assume they would be inexpensive to host as well. That's a given. I'm more interested in how much money they can make.
Simply running ads doesn't really seem like an issue as long as you're not making the site unusable. I'd be more concerned about the fact that the average user in need of a base64 converter is arguably more likely to be using an adblocker.
those on the first page of search engine results are more likely to command a higher price. I wonder how much time it would take to reconcile the investment with ads, and likely a reduced userbase. probably years
Most Sites shows ads through Google AdSense. Most web searches are through Google. Makes sense for them to try and send you to properties where they might make some more money off of you.
I bought a subscription box business once because I was In the same business and figured I could cross-promote it and already had the experience to run another one.
In the end I shut it, because I realized that with a newborn in the house I didn’t actually have the time/energy to run another one. Also prev. owner had priced it such that it was impossible to source legit good quality products.
I did run it for a bit and just about got the investment back (it only cost $3k) before shutting it down.
All the HN comments here say "buying/selling projects", which I guess is because the website itself says "buying/selling tiny projects".
However this is very different to buying/selling businesses (i.e. going concern with books up to date), and the search interface doesn't let me specify that I want to buy something with at least one paying customer (i.e. a business).
I'd be interested in buying a going concern (even if it's going off a cliff), but not someone's weekend attempt to learn a new web platform whose only hits are from search engine indexing and people who got there by mistake.
Seems like all you'll be buying here are snippets of working code, which is not very valuable in and off itself.
Since this is likely my first conscious run in with a website explicitly generated through a no-code platform, I have to say my experience are very negative.
The load time is unbearable for something as simple as this.
I had a side project game that made it to the front page for half a day and it logged about 28k visits for that day.
Any proven open source database should be able to handle that, sqlite included. It's most likely some form of bloat sitting in the middle slowing everything down. And probably more due to the way the page is generated via 'low code' framework vs. the intention/design of the author.
Oh yeah, they're terrible in many ways, but so was the first version of <insert favourite platform here>. At the moment you can prototype with them. In five years, though...
I have been seriously considering doing a tiny acquisition myself as a gambit to get back into tech after a very long period away.
Frankly, it's been hard to find something that seemed serious or at least real and somehow worthy of existing in the world (I get that this is my own internal value judgement). I left with the impression that this sort of thing is like the tech version of /r/CrackheadCraigslist.
Also, it didn't help that at least one of these sorts of sites demands users link to their LinkdIn account to even see the projects that are for sale. I think LinkdIn is creepy enough on its own and that really put me off.
Assuming I wanted to buy a few of these, what's the best way to get the cash out at the end of it all? Create an LLC, have the LLC buy the sites, then just do dividends or something?
I'm kind of hazy on how to fund such an LLC to buy stuff in the first place - do most people structure the initial money as a loan so it's tax free?
I'd love to hear practically-speaking how to do this on a small scale.
The best way to get cash out is to not get cash out. You run "business expenses" through the company: laptops, your internet, cell phone, monitors (maybe you need a really big one, like a TV size.) Get creative. It's like getting a ~40% discount on everything you buy that way, since you're paying with pre-tax money. If you're lucky, you'll have very little profit. Pay yourself a small distribution with some of the remaining cash.
I'm hoping experts will arrive to tell me why I'm wrong - but I think you just buy stock in your LLC at whatever price, or you can loan the LLC the money at whatever terms.
sounds like a fun project, but it shows empty on mobile (iOS) and desktop (Firefox). Also, having a search before a browser is a bit weird. I don't know what to search for, maybe if I could look at a few projects before I could have some ideas.
This makes little sense to me. Surely to be worth doing at all, the purchase of a "project" needs to have legal paperwork to ensure that the IP is secure, and so on. Legal fees to get that drafted and reviewed will be approaching $5k. It's like trying to sell a micro-house for $5k.
I assume at that pricepoint, there's little scope for extensive due diligence. Take the seller at their word and fly under the radar. I've started many small projects over the years in which a lawyer/accountant has had zero involvement. If I were buying at that level, I would expect little more than some code review and historical analytics/revenue info.
Weird that anyone would acquire anything for <$5K; I would have thought that sensibly taking on any kind of going concern or project would require too much in the way of legal expenses to make it worth it.
Maybe I have an exaggerated notion of this after having been part of an 8-figure exit to an S&P 100 company, but I would figure you take on anything like this you're potentially buying something with an imminent lawsuit, patent infringement problem, etc. unless you do due diligence, but that said due diligence would be ridiculously expensive relative to the $ involved.
Do they provide any help with this issue, or are they a no-legals as well as a no-code startup?
Mostly, but there are legal actions one could stumble into where $5K is pocket change. These typically 'downscale' but they don't necessarily downscale all the way.
Here's a list I put together last year of similar sites, I just added Tiny Acquisitions to it. Disclaimer, haven't looked at this in a while, some may be inactive.
These are a little too tiny. There are projects I would pursue as a side project, but not in the 5k territory (it's just not worth the effort), and I would be very concerned that they were simply using small projects to push malware.
For businesses that have not been aggressively monetized, the $5k range is not an uncommon number. This is often due to the creator not being interested in monetization.
A $5k price tag is roughly $100 a month in profit/SDI (seller discretionary income), and there are a lot of good projects that could have much more revenue that are currently at or below the $100/mo SDI level.
Fwiw, while you not be the target market, there are many sellers (of businesses in general) that like to see something they made grow, even if the growth is done by someone else.
If somebody is selling something it's because it's not making them money, and that's the end of it. Nobody would sell you a project for 5k that's generating 1k per month. People sell when either the writing is on the wall, or they can't finish the project and don't care anymore. Just expect that.
Of course, there are no absolutes. But how common are projects like that? Exceedingly rare in my experience. The great majority of projects (especially web and tech) are no longer profitable or decreasing majorly by the time of sell. That's been my personal experience from extensive study and searching for profitable projects for sale. But one could always get lucky I suppose.
It's common. As soon as your project starts making money it also starts giving you anxiety and stress. Having a project that's stuck on a moderate income is a curse and you dream of getting rid of it. Been there many times and I've also closed down a lot of profitable projects even without selling them. That's how much of a burden it is. The fun part is creating something new before it starts getting paying users.
That's not a week's salary for most of the US, maybe in SV and NYC. $5k/week is $260k/year. The median salary in 2019 was apparently $107k or so for software developers, which is more like $2k/week. I wouldn't expect it to have more than doubled in the past 2 years.
I don’t have the formal education or know how to get hired as a developer, and make 35k a year in Seattle doing non-developer stuff. $5k would be pretty neat. It does remind me of the height of the flash game period though (where I started programming!)
Haha at your edit, you really should take the advice of the people replying to you. Making 5k every few weeks is still close to a 90k a year salary and about 30k more than the US mean.
Is it really or is it just in the SV bubble? Or is this a case of "it's not interesting if it's not in SV"?
Sometimes reading HN gives me the feeling that there is no "tech" other than FAANG in the US. Or somehow every little "tech" company is just making FU money, which sounds hard to believe.
No it's not [0]. I know HN is a bubble, a rich and successful one, but it's crazy how detached from reality some comments are. It borders between an extreme 'fake it till you make it' mentality and sheer trolling.
For reference, in my G7 country $5k are 3 to 4 months wage.
> Or is this a case of "it's not interesting if it's not in SV"
This is a case of "get deep knowledge about something which can not be replicated by googling your way out".
Become a recognized expert in compilers, OS internals, or similar areas and suddenly you get $250-300k anywhere in US/Canada. Europe tech salaries are much lower.
Not sure where you’re located, but as others have said, this is not an uncommon or unreasonable salary for a strong developer in certain parts of the United States.
You’ll have to work for certain companies in certain industries but if you value comp and you’re good at your job, this is very doable.
What this is good for is people with failed projects who want to just sell them off so they can save face and say their project was "acquired" and technically not be lying.
If they can go a step further and send out press releases about the acquisition automatically that would be great, but without revealing the sum of the acquisition.
You're also unlikely to find a great deal on a really special project on a marketplace. People who post on marketplaces like Flippa or MicroAcquire or SideProjectors (there're dozens of them) have either:
1. Realized the time it takes to maintain is not worth the revenues/profits
2. Realized the income is not sustainable and are trying to cash out at the end of a great run
3. Realized that some folks are willing to pay very high multiples and will list their projects at prices most (but not all) people will balk at.
If you're really interested in taking over a project that's profitable, network with people, do cold emailing, and find opportunities to take over projects that the owners are simply not interested in any more.
In other words, look for the elderly couple who is ready to move on from owning their profitable, outdated shop.