Selling any business comes with certain challenges, from valuing to due diligence and finding an appropriate buyer, and selling a mobile app is no different.
There are countless different mobile apps available. And given the advances in technology and increased reliance on smartphones, the growth of the mobile app industry should come as no surprise.
The UK is now considered the most lucrative mobile app market in all of Europe, with National app sales reaching more than £2.5 billion ($3.4 billion) in 2021. The current market success provides excellent opportunities to sell mobile apps if you are in a suitable position to do so.
Factors to Consider When Selling Your App
As people spend more and more time on their phones, they also begin to increasingly invest themselves in various mobile apps. This has aided in the evolution of diverse applications.
There are popular apps for everything from reading to banking to exercise and news. The particular category under which your mobile app operates will influence the sellability and approach required when selling your software.
Every journey must reach an ending, and this point will be different for every person. Some choose to sell their businesses because they wish to retire, while others simply feel that they have done what they can and want to move on. Whatever your reason, we know that deciding to sell something you have created or built up can be tough.
If you are ready to sell your mobile app, it’s time to begin research and preparations. The more you know, the better equipped you will be to get a great deal.
There are numerous factors to consider when selling a mobile app. Aside from the app and its use, you should also review your current market share, customer base, and competition.
How Do You Prepare to Sell Your App?
Before you put anything into effect, you must check whether you can technically sell your app. Apple, for instance, has criteria an app must meet to be sold and transferred to a new developer. You can check to see if and how to transfer an Apple app here.
There are a few other things that should also be put in order before moving forward with a sale:
- Set your expectations
- Fix bugs or app issues
- Ensure information and accounts are up-to-date
Once everything is in place, you can move on to working out the worth of your mobile app.
How Do You Value an App?
Trends in mobile app development also suggest that continued growth of the industry can be expected. The global mobile app market is projected to increase 18.6% from 2019 to 2026. As of yet, there is no significant sign of this bubble popping.
Competitor apps can help provide an estimate of your app’s value. But you will need to get an accurate valuation of your business if you are serious and ready to sell.
How can you get a fair value for your business?
It is best to speak with a professional business appraiser or investment banker, preferably one with experience valuing mobile apps. They will look at information, including your current app profitability, running costs, and forecasted cash flow.
What attributes affect business value?
Your business value can be affected by wider circumstances, such as economic climate and industry conditions, and individual ones like the potential for growth, app age, and associated risks.
Due Diligence and Mobile Apps
Due diligence typically involves an investigation or review in which facts can be confirmed. Buyers need this information if they are to make an offer on your app business to mitigate risks and analyse the opportunity.
If you want to find a high-quality buyer, you need to do your due diligence. People tend to look particularly at company numbers over time and how these compare to competitors. Prepare to have your revenue, profit, and margins examined.
Due diligence also protects sellers in case issues should occur after a sale has been completed.
Finding a Buyer For Your App
In some cases, a buyer may reach out to you directly and express interest in your app. However, this is not a common occurrence. Most mobile apps are bought and sold through business brokers.
Try building a profile of what your ideal buyer would be. What questions would you ask them?
You should conduct some of your own mobile app market research before you choose which broker to use and before making any agreements. Knowing the state of the industry and having an approximate idea of what to expect in terms of buyers, value, and processes will help you protect your interests.
Negotiating tips for selling a mobile app
Some buyers will have already bought and sold hundreds of apps. If they perceive you as inexperienced, they may attempt to offer you a lower than market value offer. A broker will be able to assist you with negotiations, but it is best to have a clear idea of your business value if you want to avoid an unfair deal.
Wrapping Up the Deal
Selling a mobile app is not always a quick or easy process, so congratulations if you have made it through some of these hurdles.
It is perhaps more important than ever to avoid or overcome challenges at this point in the deal. Some common difficulties that mobile app sellers face include competitors and price. You can mitigate some of these risks by putting the benefits of your app first and ensuring that contracts are signed promptly.
Need a Helping Hand?
If you’d like to gain access to thousands of buyers, you can sell your business online with BusinessesForSale.com.
It’s not always easy to find a broker that knows the mobile app industry and can support you in selecting viable buyers who meet your criteria. Brokers can also make the process a little less stressful and more straightforward. You can find a broker to help sell your business on our site.