How Much is your App Worth? 3 Tips to Position Yourself for a BIG Exit

You've built an app, but how much is someone willing to pay to acquire it?

If you have a really good app, your app's worth is typically equal to 1 year's revenue (App Value = 1 year's revenue).

But don't sell yourself (or your app) short.

Below are the 3 tips to guarantee a lucrative sale.

1. Create Your Pitch/Offer

The first thing you need to do is create the offer you're selling. 

What NOT to do:

Provide the buyer with your app's download numbers + revenue reports, and ask how much they're willing to pay.

Instead, show the buyer how they can integrate the app into their brand.  Demonstrate how your app is the solution to their biggest problem + walk them through exactly how your app fits into their business.

Remember, you are selling a solution, not a product.

Your offer can turn an app that might be worth $30k in an open market into $250k simply because of your pitch.

2. Sell A Turnkey Business

Put a higher premium on your app by selling the systems that made it successful.

Have all the documentation, operating procedures, reports, update strategies…in place and organized.

Show that your business is easy to run and repeatable.

Make it so simple that anyone, even someone with zero knowledge about apps, can walk in and run your business.

And put a price-tag on EVERYTHING:

  • App Code ($20k)
  • Documentation ($3k)
  • Operating Procedures ($8k)
  • Update Strategy ($1k)
  • Next 6 Month Strategy Guide ($5k)

3. Mitigate Risk

Buyers fear the unknown.  At any moment a competitor could blow your app out of the water and completely devalue your business.

It's your job to make risks less severe and painful for the buyer.

If the buyer is hesitant because of their lack of app experience, offer to consult 6 hours a month to make sure everything goes smoothly.

Help them with ASO, technical issues, marketing strategy implementation, reading analytics…

You're not guaranteeing anything, but you are relieving some of the unknowns and putting the buyer's mind at ease.

Next Moves…

If you want to make a lot of money selling apps and businesses…step away from the marketing data (downloads/revenue) and find a way to position your app as an unbelievable solution to the buyer's biggest problem.

Here are a few steps you can take for a lucrative acquisition:

  1. Organize your app business's assets and reports
  2. Create more value by including documentation, operating procedures, etc.
  3. Put a price-tag on everything, not just the app itself
  4. Find 5 buyers (with money) who have a problem that your app solves
  5. Contact them and pitch your business as a solution

Solve a problem, add even more value, and make your offer impossible to turn down.

See ya,

Mark

How to Make An App
 

COMMENTS

  • Manuel Pena February 14, 2018

    Great article Mark

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