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Last Updated on September 22, 2022
Welcome to the Success With Soul podcast! Today we’re talking about a topic we’ve never talked about before: how to sell an online service business. As many of you know, I sold my service-based business and blog Root + Revel in 2020. But this is the first time I’ve sat down with another person who’s also sold a similar kind of business (in Rachel’s case, a social-services biz) to talk about the practical and emotional details. So if you’ve got an online service business that you’re thinking of selling, or you just want to know more about how to build a sellable asset — today’s conversation is for you!
Table of Contents
I’ve talked about the emotional journey of feeling “done” with my first blog, Root + Revel, navigating that new territory, and trying to decide what to do.
At the time, I was relatively new to the industry. R+R was my first big success — an online service business that had so much of me in it: my passion for healthy eating, my values, even my face! (more on that later)
It was also my baby. When I started it, I thought, This is it. I’ll never do anything else again. I LOVED it and was so energized by it.
So I was genuinely troubled when I realized a few years later that I wasn’t energized anymore. I looked at the blog and recognized that I’d said what I had to say.
The truth was, as extremely grateful as I was (and still am) to have been on the journey … I was restless and bored with it. I was hungry for something fresh, a new challenge. Some of my perspectives had shifted around “diets” — and I struggled to find a way to hold the tension of earlier blog posts (that were by that time very well established on Google) that contradicted my own evolution. Also, I was a brand new mom, and I really wanted a business that was less hands-on.
At the same time, I felt a great deal of trepidation of making such a big change. I wondered if it was wise to change directions like that, or if I was doing something wrong by leaving something behind that I had so lovingly built.
This was one of the (many) big lessons of entrepreneurship that I had yet to learn: what you choose today is not forever … and that’s 100% okay. It’s actually pretty damn normal to evolve along the way and want something new.
When it’s time for a change, the good news is that you have choices — which I didn’t know at first.
Part of the grief I felt when I realized I wanted to move on from Root + Revel was that I literally thought I’d just have to walk away. It didn’t even occur to me that selling was an option! I didn’t understand that an online service business like a blog can actually have monetary value.
It was only in my mastermind group (yet another reason to have a group of solid women to hang out with) that someone suggested I try selling it.
Suddenly a whole new world of possibility opened up.
I didn’t have to leave it and watch it just … disappear. I didn’t have to abandon all my years of labor and love. If I sold it, all that good energy would still be out in the world. And while it obviously wouldn’t be mine anymore (meaning I’d have no control over what happens), it would still be bringing joy to someone else in its new incarnation.
Selling felt like an empowering and healthy choice: I would get my chance to launch out on a new adventure, I’d have some financial abundance, and the business I’d spent so many hours nurturing would have a good, new home.
So if you’re in that place, too, I think you’re going to get a LOT out of this episode. This conversation is great for you if:
Let’s dive in!
Rachel is the programming and marketing coordinator for Team KK.
She came to us with a wealth of entrepreneurial experience: she’s a Certified Level 1 Aromatherapist holistic health coach, and had over a decade of owning her own businesses rooted in social justice, community health, and coaching.
Something I learned in this conversation: she’d owned her own business, purchased a business, and sold a business by the time she brought her amazing powers of coordination to us.
So in this episode, she really has an informed and complex perspective to add, because she’s been in every role, and she has her own unique experience selling her online service business.
An online service business (also referred to as a service-based business) provides instruction, guidance, assistance, or work via the Internet that helps customers or clients meet specific needs or solve specific problems.
So instead of a tangible product, they are doing something for a client that the client cannot or doesn’t want to do on their own. And while that work might result in a product (e.g., a graphic designer creates a logo for you), you’re paying for the design service.
Also, it could be that the service you’re purchasing could be done in person (for example, therapy or coaching). But if customers can get the same assistance and value without in-person contact, and the person is providing it that way, then that’s an online service business.
Now, of course, many businesses offer both products (physical or digital) and services.
So, as a basic example:
And you can see how this same person could do one or other, or both, and could also offer those services online as well as in person. In addition, depending on her credentials/experience, she could offer digital courses to other aestheticians on, say, how to build a successful practice, or teach people how to make their own natural products.
The list goes on — and so can the combinations of different types of hybrid offers and business models.
The short answer is: hell yes!
I had a lot of people give me a confused look when I told them I wanted to sell my blog. It’s not a product, and I was just beginning my journey into the world of digital courses. So it seems like assessing its value would be sort of a vague process.
But in the world of selling online service businesses, there’s actually a way that brokers (if you choose to engage with one) evaluate past and potential revenue and use that to calculate the selling price.
Part of what made this discussion with Rachel so rich was that she and I made different choices when it came time to sell our businesses — and in the end, they both worked out.
Rachel opted to sell directly to someone she knew was a good fit for the social-services biz she’d built. She didn’t use a broker, and she and the buyer landed on a price that felt fair for both of them.
I chose to hire a broker (a couple, actually), because I wanted that help professionally evaluating the economic potential of Root + Revel, and because it was my first time selling, I didn’t know how to do that. Yes, the broker takes a cut, but for me it was worth it, because I was able to get a higher asking price.
This is just one example, and we also go into what we learned, what we’d do differently next time around, and what surprised us most about the whole process. There’s a lot of practical details in the episode, so be sure to listen all the way through!
Thanks so much for joining me this week. Have some feedback you’d like to share? Leave a note in the comment section below!
If you enjoyed this episode, please share it using the social media buttons you see at the bottom of the post.
Also, please leave an honest review for The Success with Soul Podcast on Apple Podcasts so we can improve and better serve you in the future. Plus, you could be featured on a future episode during our listener spotlights. Ratings and reviews are extremely helpful and greatly appreciated! They do matter in the rankings of the show, and I read each and every one of them.
And finally, don’t forget to subscribe to the show on Apple Podcasts to get automatic updates. My goal for this podcast is to inspire those who seek flexibility and freedom in their lives by making something happen with holistic, soulful, step-by-step strategies from me and other experts.
I’m a big proponent of just paying attention to your body and your desire — which I admit is sometimes easier said than done.
It can be difficult to try and mentally figure out the most “logical” next step or what you “should” do — but your intuition isn’t going to steer you wrong. Do you feel energized to do the work that’s before you with your current service-based business? Or do you wake up feeling a sense of dread? Are you focused, or do you find yourself daydreaming about other endeavors? Pay attention to the signals your life is sending you, and then you can discern if it’s time to take a break, maybe slightly tweak your approach/offerings, or truly leave the old behind and start something entirely new.
Whether your online service business is something you want to do for two years or 20, there are things you can do right from the start to maximize your site’s earning potential, so IF you decide to sell later on down the road, you’ve got a solid foundation. Inside the Success With Soul Incubator, we cover all kinds of ways to monetize your site and your biz, so you’re creating something that has immense value for your customers and for you as an entrepreneur.
Welcome, welcome to the Success with Soul podcast. This is Indira with Team K K. And I am so excited to share this week's episode with y'all. We have our very own Kate, and Rachel, our program coordinator with Team K K. They will both be discussing how they sold a service based business. I'm so excited to share this episode. Let's dive in.
You're listening to the Success with Soul podcast with Kate Kordsmeier ex-journalist turned CEO of a multi six figure blog and online business. But it wasn't that long ago that Kate was a struggling entrepreneur who lacked confidence, clarity, and let's be honest money. But all those failures, experiments and lessons learned helped Kate create a thriving business that impacts 1000s and brings freedom, flexibility and fulfillment to her life. If you're ready to do the same and make something happen with holistic, soulful, step by step strategies from Kate and other experts, you're in the right place. Here's your host, writer, educator, mom, recovering perfectionist, bookworm and sushi connoisseur Kate Kordsmeier.
Kate Kordsmeier 1:22
Hello, everybody. Welcome back to the Success with Soul podcast. It is Kate your host and I am joined here today with Rachel from tiene que que Rachel is our program coordinator extraordinaire. She joined the team a few months ago and has made everything better since then we're so glad Rachel is here today. And we're here together because we're going to be talking about how to sell a service based business, which both of us have some experience with as y'all know, most likely I sold Root + Revel on my blog at the end of 2021. And Rachel has also sold a business that she owned in the past. So before we dive into the topic at hand, I'd love to just have you introduce yourself to everyone and tell us a little bit more about your entrepreneurial journey.
Rachel Silves 2:05
Sure. Thanks, Kate. Thank you so much for having me on Success with Soul today. So like Kate shared, my name is Rachel silvus. And I'm the program coordinator here on Team KK. And I have a little bit of different experience coming in as an entrepreneur, I actually kind of fell into it where I was I graduated college was kind of working a quote unquote, regular job. And then my supervisor or my co manager at the time was like, I'm going to start my own business. Do you want to come with me? And I felt like it was the time in my life. I was like, in my young, my early 20s. I didn't have kids yet. I was like, okay, if I'm gonna take a risk. Sounds like a good time to do it. And so I kind of ended up getting into being an entrepreneur, like I said, I kind of fell into it. And I ended up running that service based business for over 10 years. I fell into it, I loved it, I purchased another business that I ended up running for five years. And then I started my own coaching business. So it kind of just as you all know, snow balled a little bit. And I fell in love with being my own boss and the ideas and all the fun things that come with the entrepreneur journey. So I'd say overall, I think I have about 15 years experience as an entrepreneur in three different businesses. And I am super excited to be part of Team KK now.
Kate Kordsmeier 3:20
I didn't realize you had also bought and sold a business in the past. Correct? Yeah. Okay, so I know we're going to talk about written revel, too. So we're just going to kind of be flipping the script on each other here. Tell us about like, how did you know it was time to both? You bought a business first or you started a business first, and then you bought another business?
Rachel Silves 3:42
Correct. I started a business first. And then I had the opportunity to buy another business that was in is like a natural product making business where I made like soap and lotion and sold it at craft fairs and kind of a hot mug, kind of a more hobby business opportunity to buy that business as well.
Kate Kordsmeier 3:59
Okay, and so that's really cool. So that was a more product based business and their business that you sold was service space. So tell us a little bit more about that. Sure.
Rachel Silves 4:09
So I was in the social service sector and in the service industry, we helped people with disabilities get jobs in our community. And I ran that business for over 10 years. And I think I realized that just as things were evolving, I still loved the work that my company was doing. But I was ready to just make a career change personally. And so I'll ask you the same question, Kate. But it just felt like the right time to go a different direction, in my personal life and in my career, and I felt like that my business partner and I had built up something that was so valuable for our community that I didn't just want to see it and when I wanted to transition out of it, and so I think that that was I just knew it was the right time for me. I don't know I'd love to flip that question back to you and have you share a little bit about written rebel and how you knew it was the right time to sell that business.
Kate Kordsmeier 5:00
Yeah, super similar. And I mean, just for anybody who doesn't know the full story, the short version is, you know, I started rootin rebel as a holistic wellness blog in 2015. And when I started it, I had no intention of ever selling it. Like I didn't even know that was something people could do. I thought this, like, if this works, this is what I want to do forever. And so I say that just because I do think there's a mindset that like a mindset shift that happens once you get into the, like, the space of really knowing that you can buy and sell businesses and websites and things like that, that it makes you approach your next thing very differently, at least for me. And so anyway, I started the Root + Revel blog, and I loved it. And it served, as they say, like it served every purpose it needed to in my life. And it was a great season for me for you know, six years. But around maybe four and a half years in, I kind of just started feeling like a little bit bored a little bit like, kind of feel like I've said, what I wanted to say about this topic, I don't really have that much left to add, there were some things that I was having, you know, that have kind of become problematic, where, like, a lot of my early posts were about the anti inflammatory diet. And then I really became more into intuitive eating and very anti diet and anti wellness diet. And so it felt really kind of out of integrity in some ways to have this site that was promoting a way of eating that's outside of your own, like internal knowing and trusting your body and that kind of thing. So we've worked for a while trying to like remove that as much as we could. But you know, it's a business also. And a lot of our top posts, like the posts that we're bringing in the most traffic from Google and things like that were some of those posts. So by removing them, we were losing traffic. And so sometimes it was like, hard to manage whether or not we wanted, you know what was more important, like we can't have a business and we don't have the traffic, but we only we want to be talking about things that feel in integrity and authentic. So that was a part of it. At the same time I had also I had my first baby. And then I had another baby. And then I had a third baby, which was launching the six figure blog Academy. And so I had started doing some courses. And I just really loved teaching, I always kind of wanted to be a teacher, but never really wanted the teacher salary and like working with kids. So I prefer working with adults. And once I started doing that I really loved kind of coaching and consulting in that way and teaching other people how to do something. And that business just really took off. And I just kind of felt like I needed to follow my heart into what the next thing was. There was a lot of other I mean, like anything, I feel like there was a million little things that went into it. So those are some of the biggest ones. You know, we've talked before about eat expertise, authoritativeness trustworthiness on this podcast before and certainly a lot inside the incubator, which is really important for SEO. And that was another piece where I felt like I didn't have medical credentials, I wasn't a dietitian or a nutritionist, it felt it was not even that it felt Google was basically saying, if you don't have these things, then we're not going to send traffic your way anymore. And so I needed to either go to med school or hire a doctor to medically review things. And I just didn't feel like you know, that's where I wanted to spend my time. So I was thinking like, I would just have to walk away. And I remember I was in a mastermind and it was the very beginning of 2020. So before the pandemic and I was just kind of sharing with my friends and they're like, I don't know what to do. I'm kind of burnt out isn't quite the right word. But you know, just kind of like over Root + Revel and I want the next thing. But how do I just walk away from this multiple six figure business? They're like, well, you don't you sell it. And it just was this light ball. Like what I could sell it? What do you mean? So it was a very long process. It took me I'm very curious to hear what the process was like for you to like it took me a year and a half to sell it. And part of that time I hadn't I didn't even have it listed. I was like preparing it for sale. So the blog was so focused on me as a persona. So it was really like removing me from it as much as I could. And there were lots of other things to do to kind of just get it ready for sale. Then I listed it for sale, ended up working with a couple of different brokers ultimately did end up finding it was one of those things like I got zero offers in nine or 10 months and I said all right, if this thing doesn't sell by the end of the year, I think I am just going to have to walk away from it. And I kind of had this surrender moment like I give it over to you universe. I've done everything I can I'm unattached from the outcome and I got three offers in one week and ended up going He was one of them. And a couple of months later, it was a done deal.
Rachel Silves 10:03
I think that's interesting that you shared some of that key because I also had that like lightbulb moment when my business because I owned it with a business partner. So as we were talking about kind of both of us feeling like we are ready to move on, and we are talking about closing the business down, I was actually the one that was like, Well, hey, like, what if we sell it? What if we sell it. And I think that just even having that thought, I think is just something like if you have a business, that's something that you should be open to in the future is being able to sell your business and just being open to that possibility of it being valuable. And it's serving a need in your community, in your online community. So I just wanted to share that I we also kind of had that light bulb moment where we were thinking about just shutting it down. And then all of a sudden, we're like, oh, like your friends told you that. And I was thinking that myself. So that was kind of an interesting experience that it sounds like we both kind of had similar.
Kate Kordsmeier 10:56
Yeah. So blogs have a very particular way that they're, you know, price to sell. I'm curious, how did you figure out like, what to sell your business for? How did you know what it was worth?
Rachel Silves 11:08
Yeah. So that's a really tricky question. There's lots of different ways to value your business. And in the end, we did kind of a hybrid approach between our gross revenue and what we thought the market could bear. We did not get our business professionally evaluated, I'm not sure if you did with really revel but in the end, we kind of just looked at what our gross revenue was, and then picked a price that we were comfortable with, which is very unofficial. But that is how we did it. How about you? How did you? You said there's an official way to price blog. So I'm curious to hear more about that.
Kate Kordsmeier 11:42
Yeah, well, I'm sure there's, you know, lots of ways to accomplish the same thing. But in my experience, I you know, everybody that I talked to said, Well, there's brokers that buy and sell help, you know, help people buy and sell websites and blogs. So talk to them, you know, you can try to sell it on your own, of course, and so that was also why it took a while at first I did try to sell it on my own because brokers take like 10 to 20% Commission, depending on the broker. And so that's a big chunk of change. So I tried to sell it myself at first. But it was pretty clear, like there was a lot of tools online that you could get valuations and put in information and stuff. And so in simplest terms, blogs sell based on the last 12 months of revenue on a multiple, so it's like you take your last 12 months of revenue, and somewhere between two and five times that revenue is what you could sell it for. And there's so many variables that would determine whether it's two times or five times or something like that. But I really struggled with this, because I had checked out of Root + Revel so much like if, you know, hindsight is 2020, if I had sold it, when I first got the idea, and I was able to just like list it and get it sold, I think I could have sold it for at least two or three times what I ended up selling it for. But because it was based on rolling revenue, as my revenue started to decline, as the business started to decline, and I was totally removed from it, I wasn't spending any time doing anything for the site anymore. And I was always caught in this kind of limbo, you know, scenario of like, well shoot, do I put more time and energy and effort and maybe money into getting the business back up. But that wasn't just like an easy thing to do? Or do I take maybe a lower sale price and just take what I can get and not spend any more, especially as a new mom, and the pandemic was like time was very precious. So ultimately, I did end up deciding to just do that. But my friend actually gave me not in this industry at all a good perspective, because I still ended up selling the blog for multiple six figures. So it wasn't like it was nothing. And a lot of people I know were like, again, I didn't even know you could sell blogs, people still don't even know you can make money blogging. So the idea that you could sell something like that was you know, unfathomable. But my friend said, you know, most people when you like want to change careers, or just change direction, like you just get a new job, you leave your old job and you just go to a new job, but you're actually getting paid to start something new, like somebody is paying you to say, Okay, you're bored with this, go on to this next thing, and I'll give you money to do it. So once you said it like that, I was like, Well, gosh, even $50 would seem like amazing, because that's not you know how things normally work. So it's good perspective.
Rachel Silves 14:27
Yeah, I like that perspective a lot. And for us, we sold our business for less than six figures. But in the end, I like you said I'm just glad we were able to get some money out of it. And then also just see the business like the bigger thing was to see the business transition on to somebody else who could then continue to take care of our clients and provide the community with a much needed service. So I just felt really good about being able to pass the torch on to the next person who would do a better job than then we would just because I was ready to transition out.
Kate Kordsmeier 14:58
Yeah, yeah, for sure. So How did you find a buyer?
Rachel Silves 15:01
So for us, we kind of made a short list of other people that might be in the same industry as us that might be interested in basically purchasing our client list because we were a service based business. So basically purchasing like our client list and then providing the services to them, almost like kind of a done for you type of thing. And so we found we made a list of other vendors or other people that were doing a similar thing, but hadn't like broken into either our location yet. And we actually just reach out with personal letters. And that's how we found the buyer that was wanting to buy our business thing. Yeah, we didn't have to work with a broker, we didn't have to, like list it anywhere, we are able to just use some of our warm contacts, and get the word out that we were selling our business and then make those personal invitations to connect more.
Kate Kordsmeier 15:52
Yeah, like I mentioned, like, I originally wanted to try to sell it privately. So I did some things like we used ad drive as our advertising network on the site. So I went to ad thrives Facebook group where there's, you know, hundreds of other publishers there and just said, Hey, I'm selling this blog, here's, you know, what I'm thinking of, for it. And I just posted it in their Facebook group. And I got a lot of conversation started from that. But I think what was tricky was that it was a lot of just like regular individuals. And so because I was selling it, you know, originally for high six figures, it was like, most people don't have a million dollars lying around. So that was hard to find a buyer at that price. And then ultimately, I ended up discounting it significantly, just because I was like, I just need to sell this and you know, be done with it, you always kind of think get to a point where it's like, you have to measure what your energy is worth and think about more than just the financial costs, but the opportunity cost of spending my time and energy working on this when I really wanted to be somewhere else. So the broker ended up being really helpful for that. And I worked with two different brokers. And the first one is a common blog broker, I won't name them by name, and they were great. I mean, they helped a lot in terms of helping me figure out how to price it and getting it listed and whatnot. And I did have a handful of calls with potential buyers. But what was interesting is that a lot of the buyers I talked to, because at this price point, they were corporations, many of which were run by just like old white men. And it was just not who I imagined selling like a female Holistic Health website to. So I remember having some conflicts like internal conflict thinking, do I care who the buyer is? Or do I just want to sell the thing, and ultimately, none of them made an offer. So I didn't have to really make that decision. But when I, I did end up selling it to just another individual. And that felt really good to like, be able to sell it somebody that I felt like would take good care of it. And it wasn't just like a commodity, it really meant something to them and whatnot. But I'm curious if both I guess if you cared, you know, it sounds like you did a good job like researching the types of people you would want to buy the business.
Rachel Silves 18:08
Yeah, mostly because we were working with vulnerable population and providing a service. And so we wanted to make sure that the people that were going to be taking care of our clients had similar values, and we'd feel good about transitioning our business to them. So that was actually a pretty important factor for us personally, which is why we kind of went the personal approach and reaching out to people who we thought would be a good fit rather than putting it on like the mass market. Because it was really important that our values were in alignment.
Kate Kordsmeier 18:41
Yeah, for sure. And you mentioned I just had two separate thoughts. I'm like so many questions, which way to go. So I was going to ask if the buyer was important. And then I was also going to ask you well, it's escaped me but the next question I had in my mind was you mentioned like they were buying your client list essentially. And so yeah, I was curious like when you're buying a service based business I know a lot of people would ask me so like you sort of blogs like what did they get? What are you actually selling? So for you it was the client list anything else come with it and like your name and likeness? Did it go with the business I think that that was a hard thing for me to also was figuring out how to remove myself from the business in a natural way that didn't leave my existing audience pissed or wondering what happened, but also made it clear that moving forward I have nothing to do with anything that you know, like now if you go to Root + Revel.com anything on there like I don't have any say in I have no control over it's a totally separate business I have no affiliation with so kind of making that clear was a little bit tricky.
Rachel Silves 19:48
Yeah, I agree with that. For us. Also, we just I just stepped out of the business and so they were not using our name. They were not using really any of like our internal systems necessarily. But then going back to your question, like, what they were really getting, like, yes, they were getting a client list or names or whatever, but they were also getting just like the potential value then of those clients. And so those clients provided, you know, X number of income for that we had 10 years of income to documented. And so the buyers was really getting them that like future potential of income, right. So they provide obviously the same caliber of service. And then the other piece that we did that I don't know if you did for a rune rebel, but we are also offering as part of the sale of the business was to help with the transition. And so we kind of had an outline like how exactly myself and my business partner were going to help with the transition, what exactly like training we were going to be providing. We were consultants for a year after we sold our business. And so there were some other pieces involved in the sale of the business as well, aside from like, just the client list,
Kate Kordsmeier 20:53
if that makes sense. Yeah, yeah, for sure. And did you have a lawyer to help you like manage the sale? How do you know which things to include and how to write the contract?
Unknown Speaker 21:03
I know, I think I was thinking you were going to ask me that. And I think we did use a lawyer just for the sale just to do the contract for us. We had a lawyer that we had worked with previously. And so we did use a lawyer for the sale and outlining the contract. And then also, I was going to ask you this too, but a lot, a lot of people or corporations even or corporations, probably but now a lot of people just have that kind of cash laying around. So we did have to be flexible. With our buyer. I'm not sure if you did, too. But the buy out process was a little longer than originally what we had anticipated, because they actually ended up doing multiple payments so that they could cover the cost of it. So we did use a lawyer to just outline all of those things inside the contract, since it wasn't for us just a one time buy out. I don't know if you did that with Root + Revel.
Kate Kordsmeier 21:50
Yeah, I mean, all of those things are certainly things that can be negotiated, I felt very much like once I'm not involved, I was already used to having payment plans for different products. And I know people fail their payment plans, and I didn't want to feel like I was chasing money. And so I made my contract say that it was a one time lump sum payment upfront. And the buyer, I don't want to speak for her. But I know like she ended up getting a business loan in order to pay for it. And so there's ways around it. But certainly, if I was more flexible, I could have found and maybe that would have helped me, you know, sell it sooner. If I was more willing to do that, I think I felt very much like energetically, I needed to close the chapter, like once and for all and just very completely all at once rather than having it be more of a drawn out process. But I think because I was already so busy in the other business and again, pandemic, two toddlers, it was like I just don't have time to Part of the reason I needed to sell was I don't have time to manage two businesses. So I think that was an important thing for me. But it's good to know, like all of that stuff can be negotiated. And the broker that I worked with, like she sells, she was great. And she sells websites from some people think like, oh, in order to sell, it must be like a million dollars or something. And she's like, No, I've sold websites for $2,000. And like, sometimes it's just getting started, you have a little bit of traffic and somebody else goes great. You did that work for me. Like I remember actually, even when I met with the buyer that ended up getting written rebel, I asked her why she was interested in Root + Revel instead of just starting her own blog. And she's like, well, you know, I could start my own thing, but it might take me years before I'm really making good money, or I could just buy a business that's already making good money and be profitable from day one, essentially. And so it's like, Oh, that's really smart. I don't know why that never occurred. To me, it always feels like you have to start from scratch, but you really don't. And so you're listening to this and you're either interested in selling but you think your site is too small, your business is too small, or you're interested in buying but you think I can never be able to afford something like there definitely is something for every you know, every market.
Rachel Silves 24:01
Yeah, for sure. Okay.
Kate Kordsmeier 24:02
Hey, hey, Kate here, pausing for a quick interruption. I just wanted to talk about something that's been on my heart lately. And that is that I feel like sometimes in this online media landscape, the digital world, that human connection is sometimes missing. I don't know if you feel that too. But one of the things we've changed in my business to account for this is that we're doing discovery calls. Because sometimes you really just want to get on the phone with somebody a real human being and have an actual conversation where you can talk about where you are in your business, what your hopes, fears and dreams might be what you would do if you knew you couldn't fail, and how maybe we could help you or somebody else could help you. You might just need a little bit of guidance or that little push or a confidence boost or maybe you have questions that you just need answered before you make a decision. Sometimes we feel like we just need more information before we're ready to take that next step. And if that resin at all with you, I would love for you to book a call with my team. Just head over to Kate kordsmeier.com/talk and book a free 30 minute discovery call today. We can't wait to hear from you.
So what do you think? What mindset did you need to embody to successfully sell your business?
Yeah, great question. I mean, one of the things that my dad talked to me a lot about, because I think I really struggled with discounting the site knowing like, you know, it was making multiple six figures a year ago, in one year, so to sell it for much less than that was like, Oh, I just feel like I'm walking away from money. And like it, you know, you mentioned like that future income was part of the was a factor in how you price the business. And that was really interesting to me, too, because my dad is like an angel investor for lots of different software companies. And he works on the board of companies, software companies, too. And so anyway, he's very involved in like, buying and selling of businesses and what it takes and everything. And he was saying that they price a lot of their things based on Okay, well, right now, let's say, Twitter, this is a bad example. I'm trying to think of like a common thing. Okay, right now, QuickBooks makes $50,000 a year, but they only have one salesperson, well, what if you could buy this business for $50,000 a year and hire 10? Salespeople, then could you 10x What the You know what you're currently making, and they're gonna factor those kinds of things in. But blogging was really interesting, because it was nothing about the future, it didn't matter what the potential could be. It was only what you've done in the last 12 months, and not in the last three years, or the last 10 years or anything, like it was very specific to that time period. So the mindset that I had to embody was one of non emotional attachment, because I think that it was such my baby, and I was so like, proud of and attached to it. And even though I did want to sell, I remember my dad asking me several times, like, if you took all you know, I'd be like, I don't know what to do. I have three options. And I hate all of them. And he said, Well, if you took out all emotion, what would you do? And I'm like, oh, option B, that's obvious. This is all just about my own ego and wanting to be able to say, I mean, of course, I'd like the money in my bank account, too. But you know, like, there was a certain ego attached to like, what if I could say, I sold my business for a million dollars? And anything short of that felt like a failure? And it was like, That's ridiculous.
Unknown Speaker 27:35
Yeah, I think for me, it showed up a little bit different. But I think that's a really important point, you have to take out the emotional attachment and become unattached to it. And it's hard when it is your baby. So for me, it showed up in a different way. Because I would tell people, I was selling my business, and they're like, wait, what do you mean, like you're selling people with disabilities, like, that's really weird. Like, it wasn't commonplace in our industry, to be like, to be able to sell a business. And so I had to think of it like, well, if I was a CPA, of course, I could, you know, sell my business like, so I had to, like, remove this social service component from the business and remove the emotional attachment, and just really get to a place of like, I'm outgrowing this, I'm ready to move on. This is a valuable, important service that we provide. And I want to help somebody be able to serve my clients, and continue to serve our community and selling my business really is the best way to do that. And like remove all of the emotional attachment around like all the weird stigmas, if there was any, just slowly get to a place of like, come on, like CPAs, or lawyers might do this all the time. And it'd be totally commonplace, and it'd be no big deal. And so, yeah, so I think I had to get to that place in terms of like detaching myself from that emotional component as well. And then also, the other thing I was going to add, Kay is just like, you have to believe that your business is valuable, like, from a place of like, scarcity, or like, Oh, I hope I can sell my business. Like, if you don't really believe that it's valuable, then you're probably not gonna find a buyer that thinks it's valuable. So I think that's a really important mindset to embody as well.
Kate Kordsmeier 29:09
Yeah. 100% I mean, just like anything, whether you think you can or think you can't, you're right. And I feel like that, yeah, totally applies here. I think the other thing that came up for me, too, is thinking more about an attachment. I also had to unattach from whatever happened to especially because Root + Revel, you know, it was like a public facing website, like anybody can go and look at it. And so, it was like, I have to unattach from at first when I was trying to sell it. It was like what if they run it into the ground or what if they ruin it, or they do something that I would never do or agree with? And I had to be okay with like, okay, but that's their choice, and only they're going to be affected like, you know, so that was a mindset I had to kind of reframe. But then, interestingly, once I got an offer that I accepted, I kind of had a freakout, too and I called my girlfriend and then, like, what if it turns out what if they turn it into this amazing business and it becomes a multimillion dollar business, and then I'll have no part in it. But I built the foundation. Like, it's so hard to just give up the potential of that. And she just said to me, and it always sticks with me. She said, That's not where your abundance comes from anymore. And I was just like, yes, that resonates exactly, I have something else that is like filling my heart and lighting the app and just I'm so passionate about it revel serve the purpose that needed to in the season of life that I needed it to. And now my abundance comes from somewhere else, and I can share this abundance with someone else. And that was like a big shift that I didn't see coming. I thought it was all going to be about what if they ruin it?
Rachel Silves 30:47
Yeah, that's interesting to think of both ways. But I think the important point there is you have to be unattached to the future outcome of whatever happens to your business after you're no longer a part of it anymore. Yeah, I think. And that's harder than it sounds, because like you said, there's extremes on either end, and you have to be able to be unattached, when be willing to like, not only be unattached, but like be willing to, like let the next buyer do their thing with your business. However, they want to do it because they're stepping in and taking over the control and the range. And I think that can be hard sometimes.
Kate Kordsmeier 31:16
Yeah, I know, sometimes, I won't say I've never looked at it. But I really kind of try to not look at it sometimes too, because I think once you start a kind of brings you back into that energy, and I just go like, you know what, I trust that whatever is meant to happen is happening with it. And, you know, occasionally my curiosity gets the best of me, but like, not on the email list. Of course, I'm not on social media anyway. But I just really try to just like trust that. Yeah, what's meant to happen is happening with it and walk away.
Rachel Silves 31:47
So what advice do you have for others who are considering selling their business or building a sellable asset? Kate?
Kate Kordsmeier 31:53
Yeah, I think the biggest thing for me is that I think we're moving away from this a little bit, I kind of hope we're moving away from it a little bit, at least, especially because as a blog, you know, it was more, it was almost synonymous, it wasn't, but people think it is with like, being an influencer. So it's very much about me, and who I am, what I like, where I live, what I buy, what I eat, you know, what I wear, like, all those types of things is so focused on me. And you can't sell you at the end, like unless I was willing to have somebody come in and pretend to be me, which I was never going to do. So yeah, so my biggest learning was not to make everything so centrally focused on you as a single person. And that you can still have some some personal story woven in, but like, it doesn't have to be you. So like, I wouldn't name if I were to launch another blog, I wouldn't name it my name, or I wouldn't make every photo a picture of me, I would incorporate lots of other people's faces, and maybe not even my own at all. I think I would just bring in other voices, or maybe even have a fake persona that I was using, if I felt like that was really, you know, that's what some of the brokers would tell me like, so what are they going to do? Some people, some buyers wanted to keep the name Kate on Root + Revel? And I was like, No, I'm not involved. I can't have people thinking that, you know, what if they published something that I really disagreed with, and then people think that that's me? And they just say, oh, you know, it happens all the time, like half the blogs out there, which I don't know if this is actually true, probably not. But you know, that there are blogs out there that are run by fake personas. And so that was, I don't know, you know, if I love that idea, but I guess I'm just saying like, there's other ways to build a business and to make it centrally about you. So that was one of the biggest lessons I learned. And something I'm definitely doing more even in this business is like having other people on the podcast and other people on the team and really trying to amplify other people's voices more. And right now, I'm like, I would never sell this business. This is the best, but who knows?
Rachel Silves 34:13
Yeah, I think for me, the biggest advice I'd give to somebody is just how important it is to have good systems and good documentation. Because you can't sell like a jumbled up mess. And just, I mean, you maybe could try but you can't really like handover a jumbled up disorganized mess. So just the more systems you can have in place, and the more documentation, the more you can, like clearly document your income that you're generating. Those are all going to be things that are going to help you sell your business. So that would be my piece of advice is like operate from day one. Like you're gonna sell your business and set your systems up and your documentation up even if you think you never gonna sell it. Just have it set up from the beginning and have it be organized so that you have the option of selling it in the future if you should choose to do that.
Kate Kordsmeier 34:57
Yeah, for sure. That's a great advice and it's not like would never hurt you to be systematic in your current business, even if you never sold it right? What was like the biggest surprise for you and all of the process?
Rachel Silves 35:09
That's a good question. I think it was. I'm not gonna sugarcoat it, I think transition is hard. And it was, like, in my mind, I think, because I was already thinking about selling the business for a while, I was already at a place where I was like, This is what I'm doing. I'm unattached, I'm moving on to the next direction. But to be fair, like it was the first time like my clients, or my community, or my employees had heard about the business selling. And so I think I was surprised at how difficult the transition was, how difficult it ended up being, where in my mind is already like a done deal. I'd already like mentally prepared myself. And I didn't really think about how much time other people would need to prepare themselves for the idea as well. So I think it was a little more emotional, the transition was a little more emotional when I was thinking it was going to be what about for you? What was the biggest surprise?
Kate Kordsmeier 36:03
Yeah, it's interesting, because in some ways, I could say the opposite. Like, I think the ease of the transition, there was a lot of prep work to lead up to it. So I don't mean, it was just like, oh, five minutes, and we were done. But it actually was a fairly smooth process to just close, I think one of the things that surprised me the most was how similar it is to just buying and selling a house, like, it was very much just like, this is the asset, this is what it's worth, this is what you get when you purchase it. And then at the end, like you don't have the keys to come back to your old house anymore. And like you don't have control over what color they paint it. And, you know, any of that, I mean, I shouldn't be surprised if control was a hard thing for me to let. But it is hard when you just like you don't have control and, and even just have other people's, you know, emotions and how they handle different situations and whatnot. So, but I think my biggest surprise was, yeah, just how, how similar it was to a house. I think when I told people I was selling my business, you know, everybody's just like, what, what does that mean? I don't understand. And again, like, what do you even selling? And I don't think I actually ended up answering that question, which was for the blog is like, well, we're we sold, you know, the domain, the URL, we sold the social media accounts, and the email list and WordPress access and some other software access. Of course, they take over, like paying the bills on things, but it was pretty much like, here's the passwords for everything. And now you can now it's yours. And I'm out.
Rachel Silves 37:36
And they got all the content as well, correct? Yeah.
Kate Kordsmeier 37:38
Yeah. All previous content. So and you know, that's, again, like, it doesn't have my name on it anymore. And I did go through and I removed any pictures of myself and especially of my children. So there's some photos where like, I'm kind of blurred out in the background, but it's not like an obvious face. If you didn't know me when no, it was me. I mean, that was a very time consuming process, because it was six years old and hundreds of posts, and my face was on every one of them. So that was a process for sure. Yeah. All right. Well, I think we did it. I'm super curious to hear what everybody thinks of this episode is very different from anything we've done before and even the topic so leave us a review or comment on the blog post and let us know what you think. If you have other questions, we can do a part two and see what else comes up for y'all. I'm sure buying and selling a business is probably not something you would think you would be doing. But you never know what can happen. So I hope this gives you some perspective that will help you either way. Any parting words, Rachel?
Rachel Silves 38:38
Nope. Just thanks so much for having me, Kate. I really appreciated being on today and sharing my experience and I hope to see all of you inside the incubator.
Kate Kordsmeier 38:46
Yay, me too. Bye. Ah. I hope you've been inspired by this episode and feel ready to take action on your dreams and goals. If so, please hit subscribe. This makes it possible for me to continue to provide free helpful content and bring you amazing guests. Just go to iTunes or wherever you listen to podcast and subscribe so that you know when we released a new episode, and you never miss a thing. Plus, we often put timely opportunities in our shows. So if you don't subscribe, you might miss something valuable
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