5 Tips For Preparing Your Course Business For A Profitable Sale

If you’ve considered selling your online course business and want to get the best possible deal (in monetary and non-monetary terms)…

The tips below I assembled based on a talk my friend and student Jason Dion gave to my private coaching group are, IMO, a must-read.

But my advice is to keep reading even if you’re convinced you’ll never sell your course business. For two reasons:

1. You might change your mind. I don’t see myself doing it, but neither did Jason. Yet he couldn’t be happier with the sale.
2. Most of the things you should do to prep your business for a sale are things you should be doing anyway. If your goal is to build a viable, long-term online course business, that is. 

I’ve never sold my course business, so I can’t talk about it first-hand. But Jason did, and for 8 figures (NDAs forbid sharing the exact figures, but it’s between $10 and $50 million).

So, I’ve just done my best to take out the most important parts of Jason’s talk and organize them into an easy-to-read-and-digest article.

With that said, let’s dive into it.

Tip 1: Decide What Kind Of Business You Want To Run

It boils down to 2 options:

1. A lifestyle business. This means living the life you’ve always wanted. No big expansion plans, just you and a couple of contractors.
2. A business built for expansion. This means aiming for growth and a huge company with lots of employees, fancy offices, etc.

Now, it might seem like the second option is what everyone wanting to sell should take.

But it’s not. In fact, there’s no clear advantage between the two. (Assuming you take some of the steps suggested below with your lifestyle business.)

The thing is, you must understand your desires to recognize what kind of a sale you’d be happy with. 

Because, in the end, it all comes down to who you are, what you're good at, and what you want to do. 

You’ll see why in the tips that follow.

Tip 2: Minimizing Your Business’s Dependence On You

Because Jason thought he’d never sell his business — his initial domain name was jasondion.com.

Sounds like trivial info, sure. But such personal connections make your business tougher to sell and lower the price.

The name is just the tip of the iceberg, of course. The more your course depends on you…

The bigger the impact on the sale. 

Ask yourself this:

What would happen to your business if you got hit by a bus tomorrow?

If the answer is, “It’d stop” — you’ve got a tough-to-sell business on your hands.

My Piano In 21 Days course fits this narrative. That’s because I’m the face of the business, the only instructor, etc.

But if I wanted to sell, I could start hiring instructors, making impersonal videos, and doing other things that show investors the business can run profitably without me.

In a nutshell, the more you can show your course business can function profitably without you — the better your selling position. 

Tip 3: Make It Easy For Buyers To See Growth Options

Different buyers will assess your company’s value differently. It can be revenue, profit, growth speed, cash flow, number of recurring customers, etc.

But one thing undoubtedly boosts said value no matter how it’s measured:

Revenue multiplication opportunities ripe for the taking.

In Jason’s case, one such angle was ads. He didn’t run any, yet the business was getting amazing figures with mostly word-of-mouth. 

Then, his courses were all DTC (Direct To Consumer), and there was an opportunity to build a B2B (Business To Business) market.

Add a couple more opportunities to the table, and Jason got an offer around 8X his revenue, when the norm is 4 or 5.

So, think of expansion opportunities you’re underutilizing. SEO, ads, hiring, proprietary tech, etc. Simply showcasing their existence can raise the value in the buyers’ eyes — even if you never plan on taking them.

Tip 4: Define Your Company’s Structure And Find The Right “Who” 

If you live in the US and want to sell frictionlessly at any point, go for a C-Corp, S-Corp, or an LLC. This ensures replacing you is as easy as appointing a new CEO. 

Another thing to consider when selling is an asset purchase agreement. It lowers tax costs (from 30% to 15% because it’s capital gain and not income) and frees the buyer from responsibility for any documents, deals, etc., you made before the purchase.

Jason, like me, isn’t an expert on these things. Which brings us to the following point:

It pays to have the top experts at your side. 

For the actual sale, this implies lawyers, accountants, and brokers who can get you a price bump that more than pays for their high fees. (e.g., Jason got a 50% price increase thanks to his broker)

The same philosophy stands for building a profitable course business. Always think about the WHO instead of how…

And find experts that can do things you can’t or don’t have the time to do.

Saving money now can get you into problems later. So, align your thinking and keep your ego in check — get the best professionals you can afford. 

Tip 5: Money Isn’t Everything

Yes, it’s incredibly important. But when selling, there are other things to keep in mind too… 

Like what will happen with your team and course business after the sale. 

Jason knew he wanted his team taken care of. Heck, their future was one of the reasons he was selling as it was linked directly to his willingness to run the business. 

He also knew he wanted the business to keep thriving. So, the only “worthy” buyers were those with the intent of growing, not just flipping it. 

Cultural fit is a huge thing for most course creators. So, make sure your messaging attracts not only the right customers but also the right buyers.  

Another really important thing is your plan for the future, as I mentioned in Tip 1.

For example, if you want to stay in the business and believe in it…

You can agree on an earnout period. This implies you staying on for X years, working to get the numbers you and the buyer forecast. 

Then, you get paid a certain percentage of the sale value only if you reach said numbers. (e.g., Jason agreed on a 50-50 earnout percentage).

Because an earnout period lowers the buyer’s risk, you get a higher total price. But you also commit to working in the business and getting results — or you lose money. 

This shows why what you deem as “right” for you has such a big impact on what’s a “good” sales deal. 

Additional Tips On Prepping Your Business For The Sale 

Jason’s talk had so much value that I couldn’t possibly put it all in one article. At least not without a way-too-high word count.

So, I’m adding the short bullets below to help direct your mind to things you should consider when prepping for a sale that didn’t make the 5-tip cut:

• Read the “Built To Sell” book
• Figure out a selling price you’re satisfied with and work to get it via your business's success.
• Create clear business plans, hire good lawyers, and do your due diligence on all contracts and legal documents.
• Document all your processes and make them easy to follow/change.
• Trademark your unique brand name & logo.
• Consider every possible scenario before or during the sale — and have a contract clause to cover it. 

Conclusion

Selling your course business successfully and running a profitable, long-term viable one are closely linked.

All the things you do to get the latter help with the former. But you should consider some specific things if selling is your goal.

Jason’s talk I digested above helps cover a lot from both camps. And the tips I took out from it are not only great for getting a sale from your dreams…

But also for laying the foundations for a successful online course business, even if you never plan on selling it.

So, here’s to using the tips to build a business that brings you joy & profit…

And that you can sell at great terms whenever you want.

I’m rooting for you.

-Jacques