Thomas Smale, co-founder of FE International, a company with seven-figure revenues that specialises in brokering the sale of online businesses. Listen as Nathan and Thomas talk about valuing SaaS companies, brokerage models, and the importance of focus.

Famous 5
Favorite Book? – The Tipping Point
What CEO do you follow? —Elon Musk
What is your favorite online tool? — SEMrush
Do you get 8 hours of sleep?— No
If you could let your 20 year old self know one thing, what would it be? — Focus. I used to jump from idea to idea - it’s far better to focus on one thing.
Time Stamped Show Notes:
01:06 – Nathan’s introduction
01:50 – Welcoming Thomas to the show
02:00 – FE International started at university when Thomas was 22
02:30 – Completed just over 300 deals
02:50 – Last deal was a SaaS business
03:20 – Model: FE will value a business, put together a package, and look for buyers
04:10 – How do you value a SaaS business?
The amount of time the owner spends on a business: more time = less valuable
The growth prospects of a business
A multiplier of 4-6 times on annual net revenue
06:10 – Why use net?
06:30 – When valuing smaller businesses, it makes more sense to use net revenue
07:05 – Business in last deal had around $200k net revenue
08:11 – Recent public deal was with PlanScope - around $100k
09:10 – The buyer was a developer looking for a safe investment project
11:00 – 7-12% churn rate is normal for businesses they deal with
11:30 – FE International charges 15% brokerage on each deal
12:00 – Currently have a team of 12 people
12:30 – Made $1.5 million in commissions in 2015
16:00 – Famous Five

3 Key Points:
Focus on one thing. It’s tempting to jump from plan to plan - but focus leads to success.
Small businesses need a different valuation model to large ones. Make sure you’re looking at the right numbers.
Always be looking for opportunities - a start-up can expand incredibly fast with the right input

Resources Mentioned:
Freshbooks - The site Nathan uses to manage his invoices and accounts.
Host Gator – The site Nathan uses to buy his domain names and hosting for cheapest price possible.
Leadpages – The drag and drop tool Nathan uses to quickly create his webinar landing pages which convert at 35%+
Audible – Nathan uses Audible when he's driving from Austin to San Antonio (1.5 hour drive) to listen to audio books.

Show Notes provided by Mallard Creatives

The Top is FOR YOU if you are:

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The Software as a Service (SaaS) entrepreneur who wants to grow to a $100m+ valuation (episode #14).

Your host, Nathan Latka is a 25 year old software entrepreneur who has driven over $4.5 million in revenue and built a 25 person team as he dropped out of school, raised $2.5million from a Forbes Billionaire, and attracted over 10,000 paying customers from 160+ different countries.

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