Is this a good deal?
You have a website that is generating a good amount of cash.
You have been approached by a company that wants to buy your site. You have been offered $1.6m for it.
Now you are asking yourself if you should sell your precious business or if you should keep it and continue running it.
Because I don’t know anything about your situation I have to make a few assumptions.
First of all I’m going to assume that the $8K to $11K is pure profit and that all else is paid for.
Then I’m going to calculate a mean of the $8K and $11K to arrive at a figure per month. This turns out to be $9,500.
Then I’m going to multiply an average of $9,500 with the number of weeks in a year:
$9,500 x 52 = $494,000
So you are roughly making $500,000 a year.
From the point of view of an analyst looking into the offer this would represent a Payback period of 3.2 years.
From an investment perspective this would be considered good. The initial investment is rapidly being paid back. This means that the deal makes sense from the buyer’s perspective.
But you are asking if it’s also a good deal for you.
I would say go for it.
The thing about being an online entrepreneur is that there’s no shortage of ideas of how to make money.
Once you have made one company work it’s easy to make another one with just a slight change of the input parameters.
Even if you are signing a deal with the company not to participate in the exact same market again, you can easily find another niche where you can thrive.
Therefore I would accept the offer.