Somewhere between 110k and 733 hours of labor is an asset you are just looking to throw away.

If you look at subbing it out to someone else(though they get full source, i mean they have to) and if you pay this/these guys 60/hr, you are looking at paying out around 44k-ish a year plus lazy bloat so probably 60k a year.

You should hopefully realize you have built something pretty awesome, you are just missing the steps covered by: http://www.amazon.com/E-Myth-Revisited-Small-Businesses-Abou...

which basically means that you need to put processes into your system where you can sub yourself out as needed and someone else can handle this. Support requests and RFQs going to your personal email aren't conducive to this. Using things like zendesk, some other support app etc would be really beneficial.

So really you have 25k a year + a hose of consulting money you can divvy up/spray around as you see fit.

You really have something cool here, you should value it correctly. People buy jobs all the time, isn't that what college is all about?

another one I liked is: http://www.amazon.com/Built-Sell-Turn-Your-Business/dp/09864...

Neither of us were looking for the additional contracting work that you take on, we instead regarded this as passive income, and took the liberty to travel and relax.

I've now moved onto a new (bigger/riskier) project full time (with another partner), with my month-to-month financial burden still being taken care of by this first business.

From my experience, what I'd suggest is that, if you haven't already, build out incredible demonstrations, tutorials, how-tos, videos, etc for your customers, in an attempt to render yourself as useless as possible (on the contracting side). Then I suspect (based on the particulars of your business), that you could just maintain the project for some amount of time, only fixing problems, enhancing support materials and answering technical support, while earning significantly more than the $25k you suggest.

I say some amount of time because these things don't last forever, especially if you aren't growing it. But to me this doesn't sound like a killer business - it sounds like some passive income that you can use as a stepping stone to the next big thing in your career.

So don't sell it. Round it out with a last big push, turn it into a solid source of passive income, and let it fuel your future endeavors.

If you want to talk about this more in private shoot me an email, it's in my account info.

Keep it. The consulting business is worth very little, I think you're right to view it as "selling a job". Take it out of the equation for now. You have $25k - $35k in passive product-based income. That's your sellable asset.

So what's it worth? Three years of demonstrated profit would probably be a fair selling price. Based on that you're looking at about $75k pretax. Why do that when you can just sit on it for three years, realize the profit, and still have a business that generates income?

If you don't want to do any more consulting work but have recurring business coming in, consider finding a trusted developer who can assume your clients and will pay you a commission on future billings.

Then it might be a better value for you to keep the business (while putting little to no effort into it) and consider the $25k/yr an annuity of sorts. In four years you've got a hundred grand, which should offset the grad school expenses nicely.

HN, please comment on my idea, as I don't have any real-life experience.

Also, if you are selling a business that small consider building it our yourself first and train your replacement while you're at it. That way an exit becomes both more likely and much more profitable.

I'm your inverse in the sense that I'm done w/ grad school and now doing freelancing/consulting to fund my own web-based projects.

Hell, go get your degree and I'll grow your business while you're gone, all the while kicking back 20-25% of consulting income. So you'll make a passive $60k+ a year while continuing to own your operation. And I won't have to spend time looking for clients.

Trust is a real issue, of course, but there are genuine hard-working people out there. If you want to talk more, my email's in my profile.

Bizbuysell.com has a lot of businesses more in that ballpark, and if you want to be a little more proactive in selling it you could talk to a business broker about selling it.

There's passive(stock dividends) and passive(almost no ongoing maintenance), those are two entirely different things, one doesn't require any thought, one does.

1. Without maintaining the website/business you run the risk of being overtaken by a newcomer and lose your passive income.

2. Even passive businesses take some amount of work. For example you need to file your paperwork / sales tax / taxes / everything else related to the boring side of things. Even if you have people to do those things you still need to talk to them to make sure it is getting done.

3. If you want to turn that 200k income stream into some other business with more potential you can get 200k * X where X is the multiplier that you get for selling now. you can then take the 200k * X and invest that into some new thing.

1.) Definitely. This will be a slow burn unless someone wants to blow you out of the water and totally undercut you in every way/shape/form.

2.) You are right. That was the idea of my comment, there probably isn't such a thing as passive income without buying an object(not asset) that pays a royalty/dividend, I just thought you were using the word in a way in which it isn't intended.

3.) Totally, i think you need to build the support systems around the business. People will want to buy a money machine, not a hassle. Having as much of that handled before you go to sell it will make it at least at first glance a way better investment. if they are looking at buying a business, aside from them being a competitor, they are basically saying, "You know, I don't trust TNK, and i'm really tired of buying stocks, maybe i'll sink some money here" then they look at your recipe for making money and decide if they want to buy the whole lot.

I just think if you are making 200k you can probably find someone that would be happy as hell to manage most of it and you dabble in it a few hours per week. So mathwise (rounding a week to 50) 4k a week..you can certainly find someone that wants to take some equity and try to build upon that, figure out some sort of metrics for gain aside from salary handled things(what you don't ever want to see, q/a etc) and go from there.

The recurring license revenue is nice. The billable hours are a little difficult to value though since they are very dependent on you skill set. If you are doing something fairly unique, and the buyer can't be trained easily or successfully than it might be hard to honestly justify that revenue when negotiating a business value and price.

What are you marketing and advertising costs now? If you say "basically zero" then you might have a lot of untapped potential value.

Since you are not interested in running a business and hiring people, I'd suggest selling now. It'll take a few months to find a buyer and a few months to close a deal so might as well start now.

To paraphrase Warren Buffet "no one ever lost any money by taking a profit".

On the other hand, $2k per month of passive income while in grad school is a great way to live and study and work without a lot of added stress.

I wouldn't take less than $125k for it, cash (don't carry a note for the buyer). And offer the buyer 40-80 hours of training over the first 2 months.

I think the ideal purchaser would be a web development company or enterprising web developer (PHP programmer with frontend skills too) who is willing to pay ~$100,000 up front for a growing and proven business, the client leads, etc. However, I'm not sure if this is possible to find.

You have enough business savvy to find customers, use the same savvy to find buyers.

Revenues do not say much, you must subtract costs of running the business. To do that, you must also decide, what is your wage (or what would cost to hire someone to do your job) and what will be left as the profit.

To simplify, the value of your business is present value of future profits.

I'd happily support it for you and pass on a cut of the earnings. ;)

That hopefully answers your question around value vs job.

Am guessing you've probably made your mind up by now which way your going to go so if your selling it on, I may have some buyers for you, contact me off list on:

throwawayaccout2010@gmail.com

happy to sign NDA before code review/discussion starts.

throwawayaccout2010@gmail.com

I was able to liquidate the clients for 5K.

This was due to poor planning, documentation of process and of course a divorce. (so communication was somewhat an issue).

You would really need to define the business...every nut and bolt...and module that drives it. Then the processes that go with it.

Then if you could quantify that to someone, and show how it makes money when operated correctly you might be able to get some money squeezed out of it for grad school.

The likelihood you will get lump sum is small...but more like you could get a residual with maybe a balloon.

Let me know if you need help packaging it up. I'm helping my current employer with this now....info@kinlane.com