How to sell your SaaS business on MicroAcquire
Is your SaaS business ready to sell? It’s not an easy question to answer, but if you’re thinking about it, then it’s probably time. This guide will walk you through the process of how to sell a SaaS business, from valuing your company to finding the right buyer. So whether you’re just starting out or are ready to take your business to the next level, read on for tips on how to sell your SaaS company.
Why sell your business?
There are several reasons you might want to sell your business:
- You’re financially incapable of scaling it.
- You’re not really in it for the money but for the fun of building solutions.
- You want to pursue other interests or ventures.
Whatever your reason, it is vital to consider it seriously until you’re sure you want to go ahead with this.
Value your business using key metrics to guide you
A potential buyer wouldn’t want to walk blindly into a deal. There are specific metrics that inform whether the deal is worth it. Some of these key metrics include:
The two primary churn metrics; customer churn, which is the number of customers lost within a period compared to the total number at the beginning of the measured period, and revenue churn (revenue lost in a period compared to what it was at the beginning of that period) are vital in deciding the fate of the sale. Though losing customers and revenue is unavoidable, having these numbers in high figures shows that the business is in decline and can deter potential buyers.
Recurring revenue is normally measured annually (ARR) or monthly (MRR). A potential buyer would typically request these details because they’re a good indicator of your SaaS business’ health and can be used to predict future growth and revenue.
Other factors that influence sale success
Level of dependence on the founder
New buyers will most likely bring in their preferred people. If the business’s success heavily depends on your involvement in critical processes, your company will struggle without you. And that can deter potential buyers.
Complexity of business operation
Businesses with complicated processes are more challenging to run. Buyers want something easy to take over without minor issues. Check your processes, from operations to sales. See where you can automate or at least create a system of workflow. Document all these whenever you can. An easy-to-understand workflow is an attractive prospect.
Market and list your business on MicroAcquire
Then comes the hard part. MicroAcquire is an online marketplace for buying and selling businesses, including SaaS startups. Their easy processes and resources help you with everything you need for your potential sale, from finding qualified and vetted buyers to hiring an advisor to signing on the dotted line. Set up your account, give the necessary data about your business, and you could be smiling to the bank in as little as 30 days. Before contacting a buyer, ensure you’re ready for the due diligence.
Negotiate a fair deal
Now you’ve found an interesting buyer. But how do you negotiate a reasonable price? MicroAcquire has a valuation calculator to guide you. But there are a few tips to help you:
- Plan carefully; don’t rush to get it done.
- Have a walk-away number (minimum figure you’re willing to sell for).
- Don’t inflate your figures; the buyer would have done their homework.
- Read and understand the fine print, especially the legal language.
Close the sale
Once you and the buyer are satisfied, you can sign off on the necessary paperwork and seal the deal. Microacquire works with Escrow.com to ensure the safe exchange of funds (from buyer) and assets (from you).
It’s a big decision to sell your SaaS business. But if you’re thinking about it and have been considering how best to make it happen, reflect on why or when selling might be right for YOU. Then develop key metrics to value your company, and ensure it can stand independently without you. The final step is negotiating a fair deal and closing the sale. And once both parties have agreed upon the terms of the sale, it’s time for closing documents and transfer of ownership. Congratulations – You’ve just sold your business!