Find saas companies for sale

Find saas companies for sale

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Where to Find SaaS Companies For Sale

 Is it possible to build a 7-figure SaaS business without having to start from scratch? To answer this question, I'd like you to meet Bob, a proprietor of an online business.

For the past ten years, he has experimented with every way there is to make money online. Bob has tried almost everything, including SEO, e-commerce, and network marketing.

They all failed miserably.

He was ready to quit before he entered the SaaS sector. He already makes a respectable 7-figure income from his SaaS business, and he intends to expand in the following years. The best part is that Bob's SaaS business didn't even begin from scratch!

Despite having little prior experience with programming and knowing few programmers, he was nonetheless able to break into the SaaS industry and succeed there. Instead of building the ideal SaaS company, his goal was to buy one.

Bob and many other business owners show that purchasing a SaaS company is a wise decision. This is due to the fact that expanding an existing SaaS business is simpler than beginning one from scratch. You already have a loyal clientele and offer a lucrative service. Additionally, the investment has a quick return.

Choosing the ideal SaaS provider is anything from simple or secure. There are far more questionable businesses than profitable ones. Finding the latter is essential to your success. help you out, we asked our successful entrepreneur Bob to walk us through how and where he finds the best software-as-a-service businesses for sale with the right SaaS valuations.

Get into The Right Mindset When Buying a SaaS Business

Before purchasing a SaaS company, you must be doing so for the right reasons. Profit and expansion are the only two legitimate reasons to buy a firm. You must believe that you can do both if you want to be successful at buying SaaS businesses.

Compared to many other internet business models, a SaaS company is frequently valued higher. To find out why that is and how to value a SaaS business we’ve written a handy guide. It goes in-depth on the metrics you should be looking out for.

Here are two questions you can ask yourself to help you get into a better frame of mind when buying SaaS businesses:

Will it help me make money?

Buying a business is primarily driven by a desire to make money. But it appears that many people are overlooking this particular instruction. It doesn't matter how creative a company is or how it wants to change the world. Don't make purchases that won't bring in money.

This recommendation is the best advice you will ever get regarding buying SaaS businesses (or any business, in general).

You no longer have to personally benefit from it. If it does, that's good. If not, you might wish to consider other possible income sources. Is it something you could provide your current clientele to make them happier or more loyal (and hence

So long as the SaaS business is going to help your bottom line in any way, it’s a good buy.

Can you grow it?

The ability of a SaaS company to produce income is important, but it's only one piece of the jigsaw. On the other hand, you ought to consider whether you can grow your business. No matter how amazing the statistics are, your SaaS company won't last if you can't keep them up.

Do you have the skills and background required to run and grow the SaaS platform? If not, would you be able to hire someone to do it for you? Would the margins of the SaaS company allow you to achieve this?

Cloud software is growing in popularity so getting involved now is as great a time as any.

How to Successfully Evaluate a SaaS Business

Finding the best SaaS businesses up for sale might be difficult if you don't know what to look for. Bob claims that the key is to view the Saas provider as a business rather than just a piece of equipment. That requires looking closely at the data, analyzing the traffic, and performing calculations.

Remember that any SaaS company you buy must bring in money for you! To increase your chances of success, Bob suggests considering the following factors while looking for SaaS businesses to buy:

Price

The selling price is where you should begin your analysis of a SaaS company. This is done so that it can act as a useful baseline for assessing a platform's worth. The pricing of a SaaS provider is frequently established by multiplying its monthly revenue by a specific number based on the core functions it provides.

Using data supported by prior experience with buying and selling similar firms, we can offer you the best valuation for your SaaS business. If you already have an idea of the business’s income and other factors, then you’ll know exactly what other similar SaaS businesses have sold for. It puts you in a better position to haggle, negotiate, or move on (if it’s a bad deal overall).

B2B vs. B2C

Platforms for SaaS are accessible to both enterprises and consumers (B2C) (B2B). Both B2B and B2C are excellent, but it's important to consider their respective benefits and drawbacks. B2B SaaS companies often serve a much smaller audience. You can therefore work with fewer customer service personnel.

B2B clients need more attention and support than do individuals, which is the price to pay. Because there are fewer clients, losing even one can have an impact on your bottom line, thus you need to be more cautious with retention. The majority of B2B clients, particularly companies, also have a protracted sales cycle. Before a deal is finalized, a lengthy process and numerous decision-makers are involved (if at all). Therefore, B2B businesses profit from having a specialized sales staff to advance the sale.

Consumer-focused SaaS companies have a wider customer base. Serving a large number of customers has benefits and drawbacks. The good news is that losing a few customers won't be a big deal with B2C. The larger customer base can also help you sell the service more rapidly and affordably through social media and word-of-mouth.

The bad news is that managing a larger customer base is more difficult. Dealing with numerous complaints and unfavorable reviews will be necessary. B2C SaaS companies typically have lower prices, making purchasing considerably simpler for customers. To meet revenue targets, you must sell a lot more due to the decreased pricing, though.

Margins

Your margin is the amount of profit that is left over after accounting for operating costs. As an example, take a look at a SaaS company with a 60% profit margin. It means that for every $1 in revenue, $0.4 must be spent on operations in order to maintain a profit of $0.6.

The margins of a business can be used to assess its profitability. It might not be providing you with a clear picture of SaaS businesses, though.

The fact that the bulk of SaaS businesses have lean operations where the founder handles multiple jobs may be to blame for this lack of openness. You'll need to hire someone to do it if he or she is a programmer or coder unless you know how to make software yourself. The same holds true for additional fields like sales and

Of course, hiring results in more expenses and lower profits. You might find that the 60% margin is suddenly not as advantageous as you had anticipated. The idea is to contrast your margins with other costs you must pay to keep the SaaS firm afloat.

Potential for Growth

To see a SaaS company's potential, you must see beyond the present. Its future performance must be evaluated to determine whether it will meet your expectations.

Without a doubt, there are several factors to consider. However, you might use two measures as a guide for yourself. These are Monthly Recurring Revenue and Growth Rate (MRR). The company's MRR shows how much money it brings in each month from membership fees plus add-ons. It's an essential metric for assessing the macroeconomic health of the SaaS sector.

The growth rate, on the other hand, shows how much the revenue is rising month after month. You'll be able to see if a business finally draws in and retains customers as opposed to losing them.

You can predict how much money you'll gain or lose after buying the SaaS company by using these two indications. It will also enable you to estimate the potential speed of your return on investment.

Why is the Founder Selling?

Understanding the reasons a founder is selling their SaaS business is crucial to get insight into their motives. You'd hope that they were selling it for the right reasons rather than because they anticipated a decline.

Surprisingly, the majority of SaaS company owners who sell their do so because they are exhausted. Don't reject that if you ever hear a creator mention it because it's a typical and frequently plausible reason in the SaaS sector.

SaaS Performance

There are additional ways to assess a SaaS company's performance as well. Traffic is a common metric to look at. This is a crucial factor to take into account because a SaaS website with higher traffic requires less marketing expenditure. Use tools like Alexa and SEMRush to monitor online traffic.

Terms of the Deal

Every SaaS company deal is different. Particularly with smaller SaaS providers, there is a lot of bargaining and discussion. A successful purchase requires that you and the owner or seller be on the same page.

To achieve alignment, you need to ask a number of questions. What requirements must you meet on your end? How long till you receive payment? How will the switchover proceed? By the way, it's helpful to comprehend the founder's reasons for selling now. If you are aware of what they want, you can offer a more enticing deal.

Additionally, document everything you say and do during the preliminary talks. Having a written contract ensures that everything is stated clearly in case there are any lingering questions. It is intimidating to negotiate and sign a deal with another party. One of the trickiest and riskiest parts of selling a SaaS business privately is this. As a result, you ought to consider using a broker to handle everything in this circumstance.

Why Using a Broker is Better Than Performing a Private Sale?

A broker service, like the one we provide, makes it easier for both the buyer and the seller to sell a SaaS company. To make sure the transaction proceeds as smoothly as possible, we create a safety net.

And they are just a few of the advantages of working with a broker. Here are some other benefits:

  • We will look into the SaaS provider for you. It is the main advantage of working with a broker like us. To lessen risk on your end, independently verify the company's validity.
  • You can use our information and knowledge. We are aware of what works and what doesn't in the world of SaaS companies. We can also give you wise advice on the businesses that might be the best fit for you.
  • assisting in the smooth running of a sale and providing legal support should anything go wrong.
  • We offer a service for moving a SaaS platform from one owner to another.
  • You will get access to SaaS vendors that are normally difficult to uncover on your own.
  • Sadly, not all brokers are trustworthy, much like SaaS businesses.

Some are simply careless, while others overcharge or defraud you of your money by using dubious business techniques. Choosing a broker to deal with on the transaction requires research in either case.

It's best to steer clear of the broker if you notice any of these warning signs:

  • either skipping a SaaS company's complete investigation or relying just on screenshots, which may be falsified. As a result, you as the buyer assume too much risk.
  • They are displaying a SaaS provider's whole listing to practically everyone. You as the buyer will benefit from a buyer qualification process. It proves that the broker carefully vets only serious clients.
  • having listings for zombies (SaaS businesses that have already sold or are inactive, but the broker still displays on their website)
  • No assistance with moving
  • their advertising purposefully misleads

Find a Reliable Website to Buy a SaaS Business

Looking for some reliable brokers to help you find your next SaaS purchase? Here are some you can look into, as well as their pros and cons.

Flippa

Flippa is undoubtedly one of the largest and most well-known internet marketplaces. It started out as a market place for buying and selling domain names and websites. The platform has since expanded to incorporate apps and even online stores. One advantage of Flippa is its popularity. It suggests that you have access to a large number of potential clients. Anyone can buy or sell at any price they want because the price range is so wide-ranging.

Being the biggest market, though, has its drawbacks. The main disadvantage is the existence of numerous con artists, phony consumers, and other unsavory characters. This is a result of Flippa's loose seller policies on its marketplace. There is a good chance that your time and, even worse, your money, will be wasted when you try to buy a SaaS company on Flippa. Simply read a handful of the reviews that have been submitted here to see what we mean.

Don't misunderstand us, though. There are still some undiscovered jewels on Flippa, and many users have had excellent experiences with it. However, you must first wade through an incredible number of subpar selections before you can find them. Sincerity dictates that the risk is excessive.

FE International

FE International is on the opposite extreme of the spectrum. Unlike Flippa, this organization inspects each company listed on its platform. They are quite picky, only selling businesses with mid-five to seven-figure sales.

Thanks to FE International's thorough screening process, you feel significantly more confident in the legitimacy of the vendor. Any scams or phony businesses for sale are removed. The tool also guides you through every step, from picking the finest SaaS provider to drafting the contract.

However, due to their screening process, FE International's listing is highly selective. Unless you have millions to spend, you probably won't find anything "affordable" on their website.

The platform only offers one point of contact, too. A manual request is necessary for each potential SaaS company whose details you are interested in learning more about. Although it is meant to pre-qualify buyers, it actually causes the sales process to go very slowly.

Additionally, after you purchase the SaaS business, they don't offer migration services. This is important since it is frequently a labor-intensive process where mistakes might be made to transfer ownership from the prior owner to the new one. If you want a specialist to handle the migration for you, you must pay more.

Freemarket

You may trust that Freemarket has some legitimacy because it was formed by the same people who created Freelancer.com and the Warrior Forum. Freemarket and Flippa are comparable, while being less well-known.

Like Flippa, Freemarket is an open marketplace where a selection of websites and apps are offered for sale at different price points. As a result, it might serve a variety of clients, from beginners on a tight budget to those searching for 6-7 figure businesses.

However, Freemarket experiences the same problems as Flippa. To begin with, it is a platform with loose regulation. It suggests that there are many con artists. Freemarket also doesn't provide any support, so if you're scammed, you're on your own.

Quiet Light Brokerage

One of the oldest marketplaces on this list, Quiet Light Brokerage was founded back in 2007.

This organization's excellent feature is that they meticulously investigate each listing. Their websites' quality, which includes several Inc 500 Internet businesses, shows this.

However, you need to have a significant budget if you want to buy something from the agency. The majority of their transactions are seven figures or more, which is clearly outside the normal entrepreneur's price range. Additionally, the need to manually seek information slows down the buying and selling process.

Primes Shops

A member of the Inc 500, Prime Shops reports annual revenues of more than $100 million. We specialize in selling top-notch Internet enterprises, including content sites, e-commerce, SaaS solutions, and dropshipping operations.

  • We want to establish ourselves as the marketplace that buyers and sellers turn to for everything. We achieve this by providing above-and-beyond services:
  • We manage the transition from the previous owner to the new one. We handle all administrative and backend processes and guarantee that ownership is successfully transferred in accordance with the arrangement.
  • Both the buyer and the seller are in our thoughts. We have "business analysts" and a legal staff on hand to facilitate the best negotiation possible because of this. Until everyone benefits from the deal, we won't get up from the table.
  • Every listing is thoroughly investigated by our team, who don't only rely on screenshots. We log into the seller's website to check the validity of their statements regarding traffic and earnings.
  • To provide a prompt response to any of your concerns or inquiries, we offer a variety of ways to get in touch with us. We're renowned among buyers and sellers for providing excellent customer service.
  • We have established a network of dependable sellers, some of whom have worked with us to successfully sell a number of Internet businesses.

Growing a SaaS business is easier than starting one from scratch

Despite the difficulties, purchasing an existing SaaS company is a great alternative to starting one. All you need to do is exercise due diligence, adopt the proper attitude, and be open to exploring opportunities.

A trustworthy SaaS company broker is also a good idea. If you want to make your business hunting a lot easier, or just need solid SaaS buying advice, do check us out! Browse through the SaaS businesses for sale on our marketplace or schedule a criteria call with one of our Business Analysts today.

Already have a SaaS business generating income and looking for the best way to optimize your current operations to make a profitable exit in the near future?

Call one of our analysts to set up an exit planning call, and take the next step to getting the best possible ROI from your exit.

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