#21 - How To Value, Sell and Buy Online Businesses

**Joe Valley** (0:00)
First thing you got to do is get the numbers right.
Sellers, discretionary earnings, net income, trailing 12 months, profit and loss, ad backs, lipped to accrual. Listening to business, getting under LOI, and then having it fall completely apart in due diligence because all the numbers are wrong. It's heartbreaking, it's debilitating, it's emotionally crushing, but it's reality.
People listening, they know the value of their car, their house, their condo, their retirement account, but they probably have no real accurate idea what the value of their most valuable asset is, which is their business. So we're seeing larger, more mature businesses where the entrepreneurs are smarter, they're more educated, and the size of the businesses are much larger. You know, in 2013, when I closed 23 transactions myself, it was about $225,000 on average. In 2018, my average size was about $2,000,000.

**Shaan Puri** (1:00)
Five million is not enough.

**Joe Valley** (1:02)
10 million.

**Shaan Puri** (1:03)
15 million.

**Joe Valley** (1:04)
$100 million.

**Shaan Puri** (1:04)
Almost a half a billion in revenue.

**Joe Valley** (1:05)
$850 million.

**Shaan Puri** (1:07)
One or two people in a bedroom actually are the threats to these giant, multi-million dollar companies because you have creativity and you have nothing to lose.

**Joe Valley** (1:16)
Add another zero to that price, buddy.

**Shaan Puri** (1:23)
Every week, we sit down with self-made millionaires and ask them, how did you do it? I didn't start a podcast. I started my own personal business school and the teachers are the successful entrepreneurs behind the biggest brands and businesses that we find today.
I wanted to know the real stories with all the details, like how did you get your first 100 customers? What did it feel like when shit hit the fan? I ask them, how did you spend your money now that you're rich and what would you do if you were starting over from scratch again today? If you're like me and you want to own your own business instead of living a nine to five job, this is the podcast for you. The Hustle presents My First Million.
Here we are, I got Joe Valley with me here on the podcast. He's a partner at Quiet Light Brokerage, which, if you listen to the episode, I think two, with Ramon van Muir, who had an amazing story where he created a blog about soap operas, even though he's never seen a soap opera in his life, but he made one of the most popular soap opera blogs in the world.
And when he needed to sell it, he went to Quiet Light. He actually tried several different methods to sell the business. When he finally was able to sell it for nine million bucks, it was through Quiet Light Brokerage, and that was the first time I had ever heard of it. And since then, I've been hounding your site to see what are the other opportunities, what are the other great businesses that are up for sale, because if you're somebody who is looking for a business to buy rather than start, these are businesses that are already running, have been running for years, they have income, they have profits, and they're not marked up like a crazy tech company with like 50 times revenue or something like that, very reasonably priced. So I love Quiet Light. I wanted to get one of the main people behind Quiet Light on the podcast just to talk about this. And so we have Joe here today. Joe, welcome. How are you feeling?

**Joe Valley** (3:12)
I'm doing fantastic, Shaan. Thanks for having me on. I'm gonna jump right in to say something.

**Shaan Puri** (3:16)
Yeah, please.

**Joe Valley** (3:16)
The beautiful thing about Ramon, who I count as a friend now, is that he didn't just sell a $9 million business. He actually sold a $200,000 business first, right?
And learned from that and built another. And the next one that he sold through Quiet Light was $400,000.

**Shaan Puri** (3:33)
Right.

**Joe Valley** (3:33)
And then hit the mother load and jumped up to $9 million. So I don't want anyone to think, oh my gosh, that's amazing, I'll never get to that. People start where they start. And they just keep going forward and fighting and ramping and succeeding. People like Ramon, it's an incredible success story. If anybody hasn't listened to that episode, go back and listen to it. He's got quite a story.

**Shaan Puri** (3:53)
And even better, his new venture, which he originally bought, I believe, off Quiet Light and has ramped up, I think is gonna be a $100 million business. And in the time I've been messing around doing a podcast, between episode two and wherever we're at now, 15 or so, this guy's built another massive business that he bought and sort of renovated off of Quiet Light.