In the mid-2000’s, I was killing it, and literally making millions per year as an affiliate marketer. I was generating real estate leads, and from the incredible climbing traffic on my websites, I felt with certainty that America was in a housing bubble. I wanted to sell my company while I could. The problem is I had no idea how to do that. Eventually the housing bubble popped and you can guess the rest of the story.
Fast forward to 2009. I discovered Internet-only website brokers and I bought and sold a few sites. Then I became a broker myself and closed over twenty deals my first year with about a 75% close rate. If you think selling your website(s) is a possibility at any point in the future, here is what you need to do today:
Think About Transferability: If you run a site that is dependent on you personally, it will be hard to sell. Personal blogs and sites that sell products you personally create come to mind as being dependent on the owner. Also, sites that do not feel like they will be around in five years are hard to sell, so if you have the word “Obama” or the name of some technology which is likely to become outdated in your URL, you should consider 301’ing the traffic to a new URL at least a year before the sale. Affiliate sites, Adsense sites, forums and drop ship ecommerce sites are the easiest to sell, as long as the products and content are “generally acceptable.” (Not porn, guns, drugs or anything else that’s fun!)
Keep Good Records: It’s a buyer’s market and buyers are in no mood to take your word on anything. Hold on to proof of payments and proof of expenses and enter them into Quickbooks or at least onto a spreadsheet in the format of a profit and loss statement. Getting an offer is one thing; getting the deal to close is another. Make sure to keep the dates and amounts accurate. Buyer’s get really nervous if they feel you are guestimating the numbers or the dates.
Keep Good Web Stats: Buyers pretty much universally want to see Google Analytics, so if it’s not already installed on your site it makes sense to do it now rather than waiting until you are ready to sell. The more history, the better.
Be Realistic: Just because LinkedIn is worth 36 times sales doesn’t mean your site is. The vast majority of mom and pop websites sell for a multiple of the owner’s income. Currently, that multiple is typically in the range of 2.5x – 3x what you made in the previous 12 months as long as the site has at least a 3 year track record. If income is declining or if the site is less than 3 years old, the multiple goes down. If income is increasing, you may hit the top end of the multiple scale, but probably won’t go much above it.
Prep it for Sale: Consider anything that would make you hesitant to buy your site if the roles were reversed, and try to fix that before you go to market. If the site is dependent on a content writer you have, make sure he’ll stick around after the sale. If you sell products, make sure your vendors are willing to work with a new owner. Buyers don’t like surprises and will exit a deal quickly if something unexpected and bad pops up.
If you can get through the criteria above and your expectations are reasonable, the odds of selling your site are pretty high. To get a sense of the value of your website, check out my website calculator here.