Deciding to sell a website can be a life-changing decision. You’ve put in years of hard work, lost many nights of sleep and built your online empire into what it is today. The Flippa Marketplace makes it easy to sell your website, but the question on most people’s mind is: when is a good time to sell? As a marketing specialist at Flippa, I’ve encountered hundreds of different reasons for why people decide to sell. Through this experience I’ve identified the top ten reasons to sell a website.
1. You Need the Money
In a pinch for cash? Whether you have a wedding to pay for, credit card debt, medical bills, a new house, a new car, or a new business, there are some things in life that require a large amount of capital in a short amount of time. Selling your online business offers a quick way generate the income you need to stay afloat.
2. You Want the Maximum Exit Value
If the expected sale value today is more than the expected sale value in the near future, it may be time to seek the optimal exit. Every seller dreams of selling at peak performance, because this is often where we see the highest multiples being paid by buyers.
3. You’re Seeking a Change in Lifestyle
Have a new job and can’t keep up with the maintenance of your online business? Want to spend more time with your family? Travel the world? Retire? These are all great reasons to sell your website. Making a lifestyle change will allow you to refocus your priorities so that you can spend more time pursuing your interests.
4. You’ve Taken the Business as Far as Your Skills Allow**
Many web entrepreneurs succeed due to their mastery of specific skills including web development, customer acquisition, social media, SEO, etc. However, individuals who are highly dependent on these skills to succeed may ultimately find it difficult to achieve sustainable growth. If you feel limited by your abilities, you may consider exiting at a premium to a buyer who has the necessary resources and skills to pick up where you leave off.
5. You’ve Lost Motivation or Interest
For some, the best part about being an entrepreneur is the startup phase. Bootstrapping a business and seeing it grow can be one of the most rewarding aspects of entrepreneurship. It is common for “start-up enthusiasts” to lose motivation and interest over time, as they daydream about the next big thing. If you find yourself in this camp, you might consider selling so that you can fund your next budding project and get back to the startup grind.
6. You Don’t Have Time
The fast paced lifestyle of an entrepreneur is not for everyone. Demanding schedules and always-changing priorities can create a chaotic environment where there is never a free minute. If you do not have time to manage your online business effectively, selling is usually a better solution than letting the business suffer a slow death.
7. The Business Is Tanking & You Don’t Know How to Stop the Decline
Because sometimes we just get in way over our heads and can’t handle what’s thrown at us. If you’re the captain of a sinking business, you might feel compelled to stay onboard until the last dollar is spent. However, a better alternative is usually to sell the business while it still has some value left.
8. You’re Feuding with a Business Partner
Business feuds can be a cancer to productivity. Sometimes they become so bad that the successful operation of the business is no longer possible. When it hits that point, dragging out a feud will accomplish nothing but a reduction in exit value. Though it’s not easy, it’s usually a good idea to sell the website amicably and part ways.
9. The Website No Longer Aligns with Your Moral Compass
Websites often evolve in ways we never imagined, and sometimes the way a website is used can vary dramatically from the original mission and intent of the owner. An example would be an online forum meant to facilitate anonymous discussions which becomes a breeding ground for explicit adult content. If you no longer align well with your own business, it may be time to step away.
10. Your Health
Running an online business can be incredibly stressful and take a huge toll on the human body. Many entrepreneurs are so dedicated to their business that they forget to step back and breathe. If it’s a matter of life or death, or overall wellbeing, it’s probably time to consider an exit.
You’ve Decided to Sell Your Website, Now What?
Once you’ve made the decision to sell, the fist thing you need to determine is your target exit price (i.e. the price at which you are aiming to sell). Ask yourself: is your website currently in a position to sell at that price? It is possible your website is positioned for a rapid exit, but it is also possible that the current valuation is well below the target price, in which case something will have to be done to raise the valuation, or the target price will need to be reduced.
As a general rule of thumb, most websites sell for a multiple of annual net income ranging from 1x to 3x, though this can vary wildly depending on the particular site being sold. Additional considerations include risk, sustainability, and growth opportunities. For example, the more sustainable and the more growth opportunities your site has, the higher the valuation it will command. If you are unsure how to perform a website valuation, you can use a website valuation guide to help determine how much your website is worth.
Depending on how well your records are kept, preparing your financials can be a simple or tedious process. Regardless, the more effort you place into preparing a clean set of financials, the better chance the sale of your online business goes off without a hitch. Potential buyers will want to dig into your revenue streams along with your expenses, and the more information and detailed accounting you can provide the better.
- Track all financial inflows and outflows back to the business
- Make sure personal and business accounts are not being intermingled
- Prepare a Profit & Loss Statement using Seller’s Discretionary Earnings (SDE)
- Prepare proof of income via a combination of screenshots and video walkthroughs
Assuming you have Google Analytics installed (which is highly recommended), you will be well prepared to provide buyers with most relevant traffic data they might be interested in. Typically, buyers will pay close attention to the trends in your traffic over the trailing twelve months, requiring careful examination of the following metrics:
- Pageviews: Number of pages viewed on a website during a given period of time.
- Average Session Duration: Average duration of each session initiated on your site.
- Top Traffic Countries: Breakdown of the geographic distribution of the users of a website.
- Traffic Sources: High level overview of the sources of traffic which feed a particular website.
- Top Content: General breakdown of the most popular content on a website in terms of pageviews.
- Bounce Rate: Percentage of visitors who navigate away from you site after only viewing one page.
- Unique Visits: Number of distinct individuals accessing pages from the website during a given period.
Whether you sell through a broker or on your own, you will almost always benefit from filling out a seller interview describing the websites operations. Common areas of interest to buyers will center around workflows, time requirements, transferability, and employees. Generally, the more passive and automated the processes, the higher price the website will sell for.
Where to Sell?
When it comes to selling your site there are essentially two primary options: (1) do it yourself, or (2) sell it through a website broker. For those that decide to list for themselves, website marketplaces such as Flippa often help make the process easier, as we have nearly one million users buying and selling sites. The marketplace is often good for sites that earn less than $1,000/month net income.
If you have a website making more than $1,000/month net income, it is highly recommended that you request a professional website valuation from an experienced broker before making any decisions. The reason being that websites of this magnitude often have intricate and complex valuations and exit plans, and this typically requires a strong understanding of the current industry environment. If you’re interested, you can get a free professional website valuation here.
Be Transparent & Good Luck
The last (and easiest) tip I can give sellers is to always be as transparent as possible. Not every website is perfect, and most have at least a few things about them that buyer consider unattractive. Rather than trying to hide these blemishes, it is always better to gain a buyer’s trust and be up front. In all of the sales I have helped manage, the sellers who are the most honest always have an easier time selling their websites. Any facts you try and hide will almost certainly be uncovered during the due diligence process and will likely ruin the chance of you selling your website. Honesty is paramount in this industry.
Lastly, keep working hard! I always tell people to keep working on their business as if they weren’t going to sell it. Remember no deal is complete until the money clears escrow, and you want to keep things humming until the very last second to optimize your exit value.
I hope this article helps you sell your business at the maximum price possible. If I’ve missed anything, please let me know in the comments below, and good luck to all with your sales!