Part of making it big is letting go of already successful business ventures to seed something even bigger. There are many entrepreneurs who build successful online businesses from scratch only to sell them off to the highest bidder. Why would anyone sell a business that’s generating a steady flow of revenue? Well, there are many reasons, and, in some cases, it can actually be a smart move.
By cashing in, entrepreneurs get to free up their time which was otherwise engaged in managing the operations of the businesses they sold. Selling a website also shields you from the unpredictability of the future and damaging market trends. However, the most common reason to sell an already profitable online business is to gather the seed money to start something much bigger.
If you are looking for a buyer for your website, the following 4 tips should help.
4 Things You Should do First Before You Sell Your Website
1. Never Underestimate the Importance of a Good Business Broker
One of the major hurdles of selling a website is finding the right buyer. Unless you are a seasoned website flipper, it’s highly unlikely you have the contacts to close the sale quickly. Business brokers specializing in website sales have a network of buyers interested in your website niche. Going through a broker also give you access to multiple offers, which increases your chances of bagging a good deal. Website brokers also mediate the deal to ensure a fair transaction and can help you with your valuation.
2. Cut the Fluff, Talk About Things that Buyers Really Want to Know
If you have ever watched an episode of Shark Tank you already know where we are going with this. People who want to invest in your business or buy your business is interested in the figures that matter. Know the important numbers by heart. For example, you should be able to say how much your website made after taxes last year. Similarly, you should know the product prices and the profit margins attached to each and every item on your website.
Buyers are also interested in the growth figures, so you should know the rate at which your business grew for all the years it has been in operation. Potential buyers are also interested to know the projected time they are expected to break even. Make sure to have that estimate and back it up with realistic numbers and growth figures. When listing or pitching your website be sure to speak about the target market and the rate at which the industry is growing.
3. Make Sure Your Website is Properly Optimized
No one wants to buy a website that’s a work in progress and not optimized properly. Make sure your website is SEO optimized to reach its full potential. If your business is not optimized, you should stall the idea of selling your website for a while. Instead, focus on digital marketing tactics that can help boost your sales. Ideally, your website should be at the peak of its business potential when you start looking for buyers. Mainly because buyers are often more interested in knowing how your business is doing currently than future projections and past glories.
4. Know How to Price Your Website Correctly
Valuation of your online business mainly depends on three things, its assets, its current cash flow and income, and how much it’s projected to grow. Another important factor that contributes to the selling price is the demand for the site you are trying to sell. If you are selling through a business broker, they are likely to provide valuation services. However, it’s important for you to know the basics.
For starters, check out other websites that are similar is scale and type and find out how much they went for. Business broker sites usually display data of past sales and you can use those prices as a reference point to price your website correctly.
Another important factor that contributes to the price of a website is the age of the business. Even if their monthly profits are identical, an online business that has been running successfully for years is likely to be valued higher than a website that just started its operations. Buyers usually multiply the monthly net income with a number to arrive at a price.
That number denotes the number of months that would take to recover the money. For a new website that just got lucky, that number can be as low as 12. So, if the website generates a monthly profit of $500, the owner might be offered a price of $6,000. However, if the website is several years old and generates the same monthly income, the offer price can be double that.