What are buyers looking for in an app business?
Eric Owens: With a mature app store, buyers are looking for high-quality apps. In fact, they would rather buy one great app than a portfolio of apps even if the portfolio generates more revenue.
They are also looking for apps with a subscription model.
If you can find a category of an app where a subscription makes sense, then definitely start making that app.
Is there a minimum revenue target?
Eric Owens: While we don’t have a specific revenue that you have to meet before you sell, there is a junior broker on the team that can assist with smaller deals.
If you're looking to sell for $50,000 to $100,000 then you should be earning anywhere from $2,000 to $4,000 a month.
Is there usually an earn-out after the acquisition?
Eric Owens: If there's on-going support work, then buyers may want sellers to stay on for a bit until the next update.
However, more likely or not, buyers have teams of their own so usually they hand over the cash and take over the apps.
What should sellers do to prepare for an exit?
Eric Owens: Have all your assets ready to go. Buyers are getting more sophisticated and looking to see your financials and analytics ready to go.
They, in particular, want to see the retention and user acquisition reports.
What should sellers avoid selling their mobile app business?
Eric Owens: Don't wait until there's a massive downward trend. If sales are going down then you will usually get less for your business.
Buyers are now looking at the past 3-6 months of revenues to make a decision on whether they want to buy your app business.
If there is a downward trend, try to get the numbers back up before dip to get a better offer.
Any app sellers who regretted their decision?
Eric Owens: The best success stories are sellers who usually know what they want to do after the sale. Some want to start new businesses while others just want to take a break.
However, if you are just overwhelmed or burning out, then maybe find a partner or hire a CEO to run the company.
Author: Steve P. Young is an app marketing expert and founder of App Masters where they have helped clients 10X downloads and revenue. App Masters is known for its ASO and growth hacking strategies and have helped 29 different clients get featured by Apple.
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