By Jock Purtle
Whether you built your business with the intentions of selling it for a profitable exit one day, or you’ve just decided that you no longer want to keep up with it and feel like offloading it to an investor, your goals are going to be the same: to get as much value from the sale as possible.
While there are quite a few different small nuances that determine how much you’re able to sell the website for, there are a few different factors that could take you from earning $10,000 to earning $50,000 or more.
However, there is quite a bit more that goes into selling your site than how much money you’re able to get from the sale. The three points covered below aren’t necessarily all about increasing your website’s value, but they are factors that you need to consider before you start listing the website for sale on the open market.
#1 – Traffic, Revenue, and Design Are The Biggest Factors
Many people that have never sold a website before and making the decision to get out of their established website are going to think that making an exit will give them a huge amount of cash.
They either have steady traffic coming into the site from their marketing efforts in the past, have already earned revenue from the site or have a design that’s eye-catching and attractive. They feel that, since they’ve spent so much time on the site, it should be worth more to an investor and that investors should be falling over themselves to buy the business.
Without fail, these business owners end up disappointed once offers start coming in and they’re substantially lower than the value the business owner had in their mind, or what they thought they would be able to sell the business for when they got started.
The real key to getting investors to offer what you’re asking for the website isn’t one of these factors by themselves, it’s a combination of all three factors. There’s no tricks involved, as investors are simply looking to buy established, profitable businesses that don’t require a ton of additional work on their part after they buy the business from you.
Traffic and revenue are typically tied together and one of the easiest ways for passionate website owners to increase the amount they can get from the sale. Adding a few affiliate links or banner advertisements onto the site when there is already a community following can turn the website into a proverbial cash cow and dramatically increase it’s worth.
However, when it comes to website design, especially if you’re not a coder or designer, making an older site look good and bringing it into today’s modern design requirements can be difficult.
For many beginners in this situation, utilizing a content management system like WordPress, Joomla, or Drupal is one of the best decisions you can make. It will help you create a modern look for the website and investors are going to be more willing to consider buying it when they have a backend in place that they’re already comfortable and experienced with.
#2 – Investors Will Typically Rebrand Your Business
For people that have devoted years of their life toward growing their website and turned it into a successful business, the emotional attachment to the business can actually be pretty great. This is even more true if there is a community of people that have rallied around you as you’ve built out the website and developed your following.
When you decide to sell the website you are going to have to start preparing yourself to go through that breakup, and it’s similar to breaking up from any other relationship that you’ve had in your life.
Sure, it may sound like a fairly weird analogy, but the emotions that you’re going to go through whenever an investor takes over the site and starts making changes are going to be something that you’re not necessarily comfortable with.
Many sellers that have never made an exit from a business before aren’t necessarily aware that the investor is going to rebrand the business and start finding a new voice, which could make the previous owner start feeling emotions ranging from grief, regret, to sadness and even downright depression in some cases.
Seeing their hard work being “flushed away” can be a painful pill to swallow. It’s understandable, though. You’ve devoted a large portion of your life toward growing this business and seeing an investor revamp it can feel like they don’t care about what you’ve done.
When you come to the conclusion that you’re ready to make an exit from the business, you’ll need to accept that having an investor revamp it after they’ve bought it from you is going to happen.
Try to get yourself to let go of the business once the sale has happened, and detach yourself emotionally from what happens to the business after the investor takes over. Give up your admin access on your social media accounts, don’t spend time lurking on the site after it’s been sold, and remove yourself from the website’s email list. Think about it like keeping tabs on the person you just broke up with, and the angst that doing it will cause you.
The only reason you should be involved in the business or even keeping tabs on it after you’ve sold it is if the investor has requested additional consultation and needs help maintaining your message and connecting with your community.
After you’ve sold the business, seeing the investor move it onto bigger and better things can really drive you crazy. This is something that many brokers, like Digital Exits, will help coach you on before you make the sale, so you can maintain your sanity once you’ve made an exit.
#3 – Website Brokers Get Higher Asking Prices
Whenever you hear about a website or community owner selling their business for prices of $50,000, $100,000, or even more, chances are that the seller was actually working with a broker. Now, there’s nothing holding you back from going out and marketing the business yourself so you can find an investor, and receive, what you think to be, a decent offer to buy it from you.
However, on average, working with a broker is going to help you earn around three times more than what would have normally been possible by selling the business yourself. That means if an investor is going to offer you $40,000 when you try to sell the site yourself, working with a broker could net you anywhere between $80,000 to $120,000, or more.
Considering that most brokers take between 10% to 20% of the website’s final value as their fee structure, you’re still going to be walking away with far more money than you could have earned by not working with a broker.
To sum this up, driving traffic to a website that’s well-designed and converting that traffic into revenue, while making sure that your own emotional attachment to the business remains as small as possible, contacting a website broker is one of the best ways to make a profitable exit and put a ton of cash into your pocket.
Jock is the founder of Digital Exits, an online brokerage service. Jock has been featured in Forbes and contributed to numerous websites and podcasts.
