Selling Your WordPress Plugin or Theme Business

Selling Your WordPress Plugin or Theme Business

Over the past few years, we’ve seen many acquisitions and merges in the WordPress space. This is a quick look at how their valuations may work and what important factors could come into play.

Valuations

The ideal situation for selling is when your plugin or theme business already has a relatively stable month over month revenue. The market is currently dictating a sale price of 2.5x to 3.x annual net profit.

In most cases, as a buyer, you’ll have to put in some work to arrive at an accurate net profit figure. Most of the smaller plugin businesses are run by their original creators and they tend to not evaluate the effort involved correctly, leading to higher net profit figures.

When you compare the multiples of WordPress plugin and theme sales to other kinds of online businesses, they are still quite low. Consider for example SaaS businesses, which sell at 3x to 4x annual net profit.

I think it’s a question of having more demand in the market, as well as the fact that plugins are GPL and so, in theory, anyone could just copy the plugin and start selling it without having to buy your business.

Requirements

If you’re selling your plugin or theme business, make sure your accounts are clean and your PayPal account only contains income related to the plugin you want to sell and not other products or services that you offer within your business. Buyers will ask for at least the past 6 months of accounts, as well as Google Analytics data, another very important thing you need to take care of.

Legal documentation is usually handled by the broker, and of course, they will take a commission for the trouble of promoting your plugin, dealing with the buyer and drawing up contracts. Typically

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Jean Galea

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Selling Your WordPress Plugin or Theme Business

by Jean Galea time to read: 1 min
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