Selling Your Business
By Pat Rafferty
It was five years ago this month. There you were at your desk, domain surfing, when you nearly spat your preferred caffeinated beverage of choice all over your monitor. You couldn't believe it and still shake your head about it today; that stellar domain that would make you filthy rich was somehow available and staring you right in the face. But that was five years ago. The grand vision that you began with has taken full form, and the site has lived up to all of your wildest expectations. But now you're ready to move on to other projects, and you're looking to sell the company that brought you here. So how do you sell it exactly? Should you get it professionally appraised or navigate the course on your own terms? The answers to those questions and more are directly below.
The first step to cashing out is to place a value on your website that's based on a number of different variables. First of all, is the site generating any revenue? Are you able to come up with valid proof that your online business pulls in x amount of dollars every month? Your buyers are going to want to see the proof, it's only fair. Paypal and epassporte statements, bank account statements, and anything else that you've got on file that reports your site's incoming revenue needs to be pulled out and thrown on the negotiation table prior to a transaction. With the past revenue proof on the table, what about future revenue? Has your monthly income decreased over the past year or two, or has it steadily gone up? If you can honestly say the latter, you'll be that much closer to your dream asking price. Second, and arguably the most important, how much traffic does your business pull in every day? 1,000? 10,000? 100,000? Just like above, your potential buyers are going to want to see proof, and past traffic trends to see if will continue to grow in the future if a purchase is made. Your existing traffic and monthly income are the two biggest components of selling your online business, so those need to be addressed first.
While your online company may bring in money, it probably has bills to pay every month as well; hosting bills, employee salaries, maintenence costs, etc. Just like above, your potential buyers are going to want to see all of your monthly expenses on paper, so getting those in order is step numero dos. If you claim your company rakes in an average of $30,000 each month, but you fail to mention that you have $8,000 of monthly expenses, your buyers are going to move on. Aside from your monthly bills, there are countless other questions you need to address before you come up with an asking price. When did you register the domain? How well is your site ranked in the respective search engines? What's the demographic of your traffic? What's your honest reason for selling? How easy is the site to maintain and/or update? If you can answer all these questions you're in great shape, because your buyers are gonna want answers to every single one of them.
All the leg work is finished, and now you need to come up with an asking price. This step in the selling process is tricky because if you go too low, you could lose out on a ton of money. However if you ask to high, no one may even think about purchasing it. What about a professional website appraisal? Many online business owners take this route, and it's not a bad one. You have to remember though that there is no "right" way to appraise a website; in other words, there's no governing body mandating how one should go about appraising an online business. Those "professionals" you're thinking about paying to appraise your work gave themselves that title. On the other hand, your potential buyers may ask if it was appraised in order to garner a second opinion, so it's not necessarily a bad idea. Aside from that, there are countless other methods to putting a price tag on your website, although the most popular may be based on your traffic. Just like a conventional business, you have customers that come in the form of unique visitors. Therefore, a common method is to place anywhere from $10-$40 on each visitor that comes through each day. So if your site rakes in 30,000 unique visitors every day, your business could arguably be worth $300,000.
In the end, it all comes down to you. You are the salesman and no one else. If I can give you one good piece of advice from this article, it would be to stick to your grand vision. Harness and use that excitement you had since you bought the domain and began building your masterpiece on day one in front of your potential buyers, and you will get the asking price you deserve. Your buyers may have their own dreams and plans for your business, but if you show them your vision for the business they'll understand why your asking price is what it is. Numbers, figures, and future projection charts may lure buyers to the table, but your enthusiasm and vision is how you close the deal.
By Pat Rafferty
It was five years ago this month. There you were at your desk, domain surfing, when you nearly spat your preferred caffeinated beverage of choice all over your monitor. You couldn't believe it and still shake your head about it today; that stellar domain that would make you filthy rich was somehow available and staring you right in the face. But that was five years ago. The grand vision that you began with has taken full form, and the site has lived up to all of your wildest expectations. But now you're ready to move on to other projects, and you're looking to sell the company that brought you here. So how do you sell it exactly? Should you get it professionally appraised or navigate the course on your own terms? The answers to those questions and more are directly below.
The first step to cashing out is to place a value on your website that's based on a number of different variables. First of all, is the site generating any revenue? Are you able to come up with valid proof that your online business pulls in x amount of dollars every month? Your buyers are going to want to see the proof, it's only fair. Paypal and epassporte statements, bank account statements, and anything else that you've got on file that reports your site's incoming revenue needs to be pulled out and thrown on the negotiation table prior to a transaction. With the past revenue proof on the table, what about future revenue? Has your monthly income decreased over the past year or two, or has it steadily gone up? If you can honestly say the latter, you'll be that much closer to your dream asking price. Second, and arguably the most important, how much traffic does your business pull in every day? 1,000? 10,000? 100,000? Just like above, your potential buyers are going to want to see proof, and past traffic trends to see if will continue to grow in the future if a purchase is made. Your existing traffic and monthly income are the two biggest components of selling your online business, so those need to be addressed first.
While your online company may bring in money, it probably has bills to pay every month as well; hosting bills, employee salaries, maintenence costs, etc. Just like above, your potential buyers are going to want to see all of your monthly expenses on paper, so getting those in order is step numero dos. If you claim your company rakes in an average of $30,000 each month, but you fail to mention that you have $8,000 of monthly expenses, your buyers are going to move on. Aside from your monthly bills, there are countless other questions you need to address before you come up with an asking price. When did you register the domain? How well is your site ranked in the respective search engines? What's the demographic of your traffic? What's your honest reason for selling? How easy is the site to maintain and/or update? If you can answer all these questions you're in great shape, because your buyers are gonna want answers to every single one of them.
All the leg work is finished, and now you need to come up with an asking price. This step in the selling process is tricky because if you go too low, you could lose out on a ton of money. However if you ask to high, no one may even think about purchasing it. What about a professional website appraisal? Many online business owners take this route, and it's not a bad one. You have to remember though that there is no "right" way to appraise a website; in other words, there's no governing body mandating how one should go about appraising an online business. Those "professionals" you're thinking about paying to appraise your work gave themselves that title. On the other hand, your potential buyers may ask if it was appraised in order to garner a second opinion, so it's not necessarily a bad idea. Aside from that, there are countless other methods to putting a price tag on your website, although the most popular may be based on your traffic. Just like a conventional business, you have customers that come in the form of unique visitors. Therefore, a common method is to place anywhere from $10-$40 on each visitor that comes through each day. So if your site rakes in 30,000 unique visitors every day, your business could arguably be worth $300,000.
In the end, it all comes down to you. You are the salesman and no one else. If I can give you one good piece of advice from this article, it would be to stick to your grand vision. Harness and use that excitement you had since you bought the domain and began building your masterpiece on day one in front of your potential buyers, and you will get the asking price you deserve. Your buyers may have their own dreams and plans for your business, but if you show them your vision for the business they'll understand why your asking price is what it is. Numbers, figures, and future projection charts may lure buyers to the table, but your enthusiasm and vision is how you close the deal.
Thanks for that, I learned some things!