Wow, it’s been a really long time since I published a new post here at ProfitBlitz! I didn’t intend for that long of a delay, but a few months ago I went through the process of selling some of my sites and recently all of my time has been tied up in the process of transitioning my time and focus from those sites to new projects.
Over the past 5 or 6 years I’ve sold several websites/blogs and I get questions pretty often from friends who are looking to sell a site of their own, so I wanted to share some of the things I’ve learned from my own experiences. This article covers 10 things that I have found to be key to selling a website for six figures. Of course, this doesn’t mean that all of these items will apply to all situations, but in general they are good things to know if you are interested in selling your own site at some point in the future.
Here are 10 keys to selling a website for six figures.
1. Steady Profits
The biggest factor in determining the price a buyer is willing to pay will be the actual profits of the website. Potential is great, but typically buyers will want to see actual profits to prove that the site is worthy of their investment. Don’t count on being able to get a great sales price for your site because it has potential. In general, sites often sell for 20 – 30 times the average monthly profit, but sometimes it can be more or less than that amount.
2. Earnings History
The longer your site has been making money the more stability it will show to potential buyers. This is one of the lessons I learned pretty quickly when I was looking to sell my first site about six years ago. Before I started to look for a buyer I ramped up the earnings of the site for about two months. While that increase in earnings did help, potential buyers had some doubts about the long-term sustainability of those earnings, simply because it hadn’t been proven.
If I had six months or a year at those levels instead of just two months it probably would have brought a higher selling price, because the earnings of the site would have been proven to be stable. Now I try to plan six months to a year in advance of attempting to sell a site, which allows me some time to work on increasing revenue and profit while showing that it can be sustainable.
3. Accurate Records
Any buyer who is going to be paying a substantial amount of money for a website will want to see your financial records. What each buyer will want and how they will want it to be presented or verified will vary, but it is important to keep accurate records of all income and expenses so you can provide them with whatever they need. I’m pretty detailed with my records and I’ve had buyers comment on how much they appreciate the clarity, so I know this makes a difference.
4. Stable Traffic
Buying a website is always going to involve some risk, but buyers want to minimize that risk when possible. If a site is totally dependent on one source for their traffic there is a risk associated with the possibility that the traffic source dries up. Most of the time this is related to Google search traffic accounting for a huge percentage of overall traffic, but it could also be another source like Facebook or links from another site. The more diversity you have in your traffic sources the less risk will be involved. For example, if you have a large email list the buyer won’t be at as great a risk if a Google algorithm change were to significantly reduce search traffic.
5. Upward Trending
In order to get the best price for your website it should be trending upwards in terms of profit, and ideally the traffic should be growing as well. At the least it should be holding steady. I have a few friends that considered selling their sites but decided to hold on to them and then wound up getting very low prices for the sites later because things went downhill. In one case a friend wound up taking a fraction of what he could have gotten for the site just a year earlier because a Google algorithm change wiped up a huge percentage of his traffic. I’m not suggesting you need to sell your site quickly. There is a risk of selling too early and there is a risk of holding on to the site too long. You need to evaluate your situation and the specific site and decide which risk you think is greater.
6. A Network or Connections
Finding a buyer for your website is usually not that easy. If you have a strong network it becomes a lot easier, especially if you have some connections to people or companies who frequently buy website or blogs. With the right connections you may be able to sell your site without any outside help. If you don’t have connections to anyone who wants to buy your site you can use a broker or a site like Empire Flippers and leverage their network. Of course, you’ll pay them a fee when they sell your site, but they may be able to help you move the site quickly and with their network of buyers you may wind up getting a better offer, which can offset the fees.
7. Room for Growth
While buyers want to see a stable history of profit for the website, it’s best if they also feel like they will be able to grow that even more and recover their investment quickly. A few months ago when I was in the process of selling my sites the buyer asked me what I would do with the sites going forward if I wanted to increase profit by 20%. If you have some specific suggestions or thoughts about the future direction of the site it can help buyers to see a path towards quickly recouping their investment.
8. Ease of Maintenance
This is a big one, and one that many sellers overlook. I know when I sold my first site I underestimated how important this was. When a buyer is considering purchasing a site they will most likely be outsourcing some or all of the activities involved in running the site. Buyers are investors. They typically don’t want to buy a full-time job where they will be stuck spending long hours each week maintaining a site.
Think about how much time will be needed for the buyer to maintain the site going forward and what you can do to minimize that. Before selling a site I recommend evaluating all of the time that you are spending on the site an eliminating anything that isn’t getting results. Most buyers will ask how much time you are spending on the site and they will factor that time as an expense, since they will be outsourcing the work. That means if you spend more time on your site it could ultimately decrease the amount of that get for the sale.
Also think about what you can outsource before the sale. For example, if you are writing blog posts yourself you could find some freelance writers to handle that for you. Then when you go to sell the site you will be spending less time on the site, and you can tell the buyer exactly how much they will need to spend for the blog content.
9. Ease of Transition
When you sell a site there are a lot of things that need to be transferred, and you can make the process easier by preparing ahead of time. Most buyers will ask about these things, so if you have it set up right it can help to encourage a sale.
The biggest factor is web hosting. I try to get any site I plan to sell on its own hosting account so I can simply turn that hosting account over to the buyer. If you host the site on the same hosting account with other sites that you will not be selling the site will need to be moved to a new hosting account when it is sold. Transferring a site is something that many buyers will prefer to not deal with. If the site is on its own hosting account you can simply give the login info to the buyer and they will update the name on the account and the billing details. It’s very simple and there is no chance of a complication that could arise when moving a site.
The same thing can be true of your other accounts, such as an email list. If you have one GetResponse or Aweber account with lists from all different sites you will need to move that email list when the site is sold.
Selling a site can take time. Finding a buyer isn’t always a quick process, and even when you have a buyer that is interested it can take quite a while for the buyer to go through due diligence. Individual buyers often move faster than corporations, and larger sales prices often lead to more due diligence, so the details can vary. If you are not prepared for the process to take some time you may get in a rush and take an offer that is less than you want simply because you want or need to move on. Plan ahead and be aware that it can take a while, and you will be in the best position to get a good price for your website.
If you have any questions about the process of selling a site please feel free to ask in the comments and I will do my best to answer it.