How To Start, Grow, And Sell A Membership Site with Luke Ward


Manage episode 242274183 series 2442163
By Subscription Entrepreneur and Eric Turnnessen. Discovered by Player FM and our community — copyright is owned by the publisher, not Player FM, and audio is streamed directly from their servers. Hit the Subscribe button to track updates in Player FM, or paste the feed URL into other podcast apps.
Wouldn't it be amazing if you could sell your membership site for a tidy profit? "Wait a second... did you say SELL my membership site?" Yes we did! But why would you want to sell the membership site or subscription business that you've spent years building and poured your blood, sweat, and tears into? Plain and simple, recurring revenue businesses like membership sites are highly attractive to potential buyers and often fetch premium prices compared to other online business models. Here's what we mean: According to subscription business expert John Warrillow ⁠— depending on the size and growth of your business ⁠— you can expect to sell a recurring revenue business for anywhere between 24 x MRR all the way up to 96 x MRR. (MRR stands for Monthly Recurring Revenue) Here's what that looks like in plain English: If you own and operate a recurring revenue business (like a membership or subscription site) that earns a consistent amount of money per month, you can reasonably expect to sell your business for 24 times the amount you earn on a monthly basis. Let's do some quick math... Imagine that your business earns $10,000 in monthly recurring revenue. When you multiply that number by 24, you could expect your business to be valued at around $240,000. Not bad, huh? But as John Warrillow explains in his book The Automatic Customer, a 24 x MRR valuation is actually on the low end of the spectrum. If you have a healthy, well designed, and smoothly running online business, you could realistically expect to sell an online membership site for 36-48 x MRR. For your $10,000 MRR business, that'd come out to be somewhere between $360,000 - $480,000. Now we're talking! But before you get those dollar signs in your eyes, know that building the type of online business that you can actually sell requires a significant amount of work and careful planning. Not only that, but there are things you might be doing right now that can make it impossible to sell your business in the future! Seriously. This is exactly why we invited Luke Ward onto the podcast today. Luke is an online entrepreneur and long-term MemberMouse customer who built a successful membership site called BassGorilla over the past 7 years. As of a few weeks ago, Luke successfully finalized a deal to sell his membership site. In this episode, Luke shares the story of his entire journey: from starting his online business all the way to selling it. And, he reveals to you some critically important details about selling an online business that he had to learn the hard way. For example, did you know that having a large percentage of your recurring payments on PayPal can be a red flag for prospective buyers and cause a deal to fall through? This episode is full of practical wisdom from Luke and we can't wait for you to listen to our conversation.

34 episodes