How to Sell a Website for as Much Money as Possible

How to Sell a Website for as Much Money as Possible

By:  Bilal kamal      Topics:  How to Sell a  Websites,Blog,    More Post About:   SEO,Blogging,

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Most "website evaluations" are based on dates and faulty incidents.

I think an entrepreneur is selling a website in your pocket!

Clinton Lee, a good friend of this article website sales agency and Income Diary, shows how entrepreneurs can get more out of their online business (or indeed business) than they think.

Clinton is one of the first companies to professionally value websites. Before turning the website upside down into a business model, he wrote one of the first authoritative work on website evaluation in 2008.

With the right marketing and approach, you can achieve a 'money for life change' on your website.

read…

Website Ratings – What You Need to Know When Selling Websites

Junk information on how to value a website on the internet is endless. In addition, there is no shortage of so-called valuation tools, not to mention “experts” with theories and formulas. For example, some of these so-called experts claim that if you know "plurality" in the industry, you can reach the value of your website. With that number in your site earnings…

For example, if the additive multiple is three times your annual income, the value of a website earning $ 10K per year is $ 10K x 3 = $ 30,000.

Pure and non mature nonsense!

In this article, I explained that the logic of this "official" (and other evaluation "methods") for evaluation myths fails. Put these theories behind you. If you restrict yourself to thinking that your website is worth three times your income, you will set artificial limits on the value of your site. And it won't help you get the best price.
3 simple factors that determine the selling price when selling a website

1.Sold to: (from domain name to mailing list)
2. Who presented the buying opportunity: (It is essential to present and attract the appropriate buyer / investor)
3. How to play: (Everything is very important, from deal negotiation to creating the best deal structure!)

Where you can make the most money is # 2 and # 3!
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1. What to Sell

The assets that support the earnings of the website have a deep interest in buyers. This includes domain names, traffic, and more. Without these assets there is no profit. Therefore, it is in the best interest of the buyer to pay attention to this asset, evaluate the asset, conduct due diligence and satisfy himself that it is worth paying for the website / online business.

However, there may be many assets that are owned by the business but which did not attract the buyer's attention.

If you don't verify and point out to buyer… . You do not pay them!
When trying to sell a website entrepreneur, you often miss the following:

– Manuals, processes and procedures developed in the business for many years (yes, it's worth it!)

– Images, advertising, content – ​​Copyright of materials created over the years

– Customer Database / Past Customer List

– Subscriber List

– Teams (people who work in business, sales, accounts, bloggers, etc.)

– Licenses, permits, permits enjoyed by businesses.

– Social media participation (actual participation, not followers)

– Trademarks, Logos, Trademarks (You may retain trademarks even if you do not register them.

– Detailed traffic logs, customer data (such as surveys), and other data

– A long history of AdWords PPC campaigns (very valuable)

It's amazing how often owners enter the market with sales notes that don't include the best assets!

But worse than that.

You should know this when selling your website…

Many people mistakenly identify some of their debt as assets. Then we spend a lot of time and effort emphasizing and talking about these debts. As you would expect, it's not favorable for the price!

Examples of debt are often greatly facilitated by the seller.

– Google's high ranking: The smartest buyer, the buyer with the deepest pocket, regards this as responsibility. If most of your income depends on the sources of your customers that you do not control, this is a big risk. Only one Algo change is needed…

– The “potential” of the business: The buyer never hates hearing about the potential because every seller claims its potential. The buyer knows that he did not develop this potential as evidence that this potential does not really exist.

– The fact that your business is not advertised and you can earn more with a little advertising: The naive idea that sellers often show up. Buyers have to spend thousands of dollars on ads that don't work so you know which ads and which channels are effective for these ads. They do not want to conduct expensive experiments. It's much better if you actually advertise and have proof of the right channel for your specific business.

Singing and dancing big songs about these debts (in the belief that they are an asset that will affect buyers) will cost a lot of money to the vendor. These do not devalue. Every time a mention of such an "assets", a wise buyer mentally drops the price by 10% or 20%.

What buyers want is often the opposite of what you are proud of. Become familiar with the elements that impress buyers and the ones that amaze them in order to ensure the best price.

2. show who you chance to buy

On hot days, stand a lemonade stand on a busy promenade. We will sell more lemonade than building a shop on a frozen winter evening at the beach.

Is it simple?

But most sellers mislead buyers completely wrong way. They list their website on auction platforms like Flippa. Or use various sites and portals classified for sale. Wrong

Your website is not intended for the most needed buyers.

Not for sale in this area Thousands of websites are sold in this region every year. However, these are not places where you can find the best buyers, the ones paying the highest prices when selling your website.

If you want to spend some time and effort on finding the right buyer, you can get a much higher return than the most demanding website ratings.

Let's take a step back and think about what "best" website buyers mean.

This is best illustrated by a simple example.

Owns a website that sells car tires (US translation: tires).

You went for five years and now you earn $ 30,000 annually in net profit. The multiple of the industry is 2.6.

Listed in an ordinary area, it enters the market, attracts Joe Bloggs who are interested in the online business, a typical buyer, who do not want to start from scratch, and who have the capital to buy. He read various guides on valuation and knows that the multiple is 2.6. He expects a business of about $ 60K or up to $ 78,000 (30K x2.6). According to his calculations, he expects to earn $ 30 million annually and recover investments for a little over two years. He considers a reasonable "payback period."

Now think outside the box.
Who can benefit most from acquiring a business when selling a website?
Who can use all assets to their maximum value?

I will make one suggestion:

National chain to supply auto parts. I'll call it XYZ Cars Ltd. We sell everything from engine chutes to wing mirrors, brake shoes and tires. They are well installed with brick and mortar exits in various cities, but they are not well online. All you need is a basic website without an online ordering facility. What are the benefits of buying a website? First, even if they sell the same number of tires as you, you will earn over $ 30 million from the tires. They buy in bulk and get a better price. If you run a site, you can earn an additional $ 100,000 in a year without change. Tires only.

But here we have the opportunity to use our infrastructure to load tens of thousands of our own SKUs (such as engine oil and brake shoes) into our online store. You now have a fully operational online store and have saved $ 15K in development costs you have to pay when creating a new website. They believe that they can be persuaded to purchase other car products that are visitors to your website, i.e. customers you do not have access to. The number processor calculates an additional $ 60K in revenue from the visitor flow.

It doesn't end there.

XYZ has some smart cookies that work for this and recognize that customers who have previously ordered from you are a valuable resource. They can inform the customer database of any new products that are in stock on the site. These customers will come back the next time they need to buy a tire, but if done well, they can turn into customers of all other products. XYZ plans to run some promotions, a special offer to allow these customers to purchase their first non-tire products. New sales from these past customers are expected to generate another $ 50K.

Let's add up. XYZ Cars Ltd will see original $ 30K if they buy your business. We will also make an additional $ 10K + $ 15K + $ 60K + $ 50K in the first year as described in the previous paragraph. In the first year, the total is $ 155 million, and in the following years $ 150 million (a $ 15,000 savings in web development costs due to one-off).

These returns will be unique to companies like XYZ Cars Ltd. Other buyers will not see near this type of return in your business. However, if XYZ expects the same payback (e.g. payback within 2.6 years), you can justify the price of $ 165K + $ 150K + ($ 150K x 0.6) = $ 405K.
So sell your website for $ 405,000 instead of $ 78,000!

Yes, a somewhat simplified example – more than the so-called general assessment is what entrepreneurs look for!

In fact, big companies don't think in terms of a two-year “payback period”. Their strategic plan tends to have a longer period. This gives you the opportunity to negotiate over $ 405K. And if you use the card correctly according to the transaction structure (see next section), you can add a value to the transaction and push the price one step further.

XYZ Cars Ltd has not actively attempted to acquire. They never considered the idea. It took some effort to find them. But if you're looking for a company like a company that can invest in research and see synergies, and convince Head Honcho to see the opportunity, there's a lot more bounty than you can get from a typical website. Sales or sales sales outlets!

Finding the perfect match for strategic buyers is not always possible. But even if it's not, the small synergy is still worth a lot more than the $ 780,000 or more price you can get from the "typical" buyers of the market platform.

3. How to play games when selling your website

In one of the blog posts on my website, I propose to buy a business at twice the required price of the owner, regardless of the figures placed on the table by the owner.

Yes, if you valued your income five times, we will pay you twice as much. If you rated your business at 50 times your income, you pay twice as much. You get the picture.

There is one warning. It is me who determines the structure of the deal in the contract.

And the trading structure I have in mind is: You paid $ 1 today and the rest paid $ 1 in installments while the business made a profit.

Isn't that a good deal?

But if you want a great price for your business you must be willing to play the game the way big companies do. The sellers of small businesses often expect to receive cash payments of agreed prices on the date of completion. That's not how it works in the biggest deal. The biggest deal involves some form of seller financing. In other words, the seller postpones part of the payment.

Giving credit when selling a website is disgusting for most small business owners.

“No way,” they cried. "How can I trust the buyer's payment for my website?"

Or "I need money now. That's why I sell my website!"

And it's fair. If you want all cash transactions that are entirely your privilege. But if you want the best price, you need to be flexible not only on terms of payment, but also on several other things.

Instead of requiring $ 500 million for your business, you can open a wider range of opportunities if you want to preempt $ 300 million by securing securities balances on business stocks, buyers' homes or other assets. Buyers – those who can't raise $ 50,000 in cash.

But more importantly, you can expect a much higher price just by making this one concession when selling your website.

$ 600K is not reasonable.

It's 20% more expensive than before.
But "seller financing" is just one of the many tools available in the trading structure. For example, if you are willing to accept personal responsibility for sales and meeting plans after one or two years of takeover, the price may increase an additional 20%-30% when selling the website.

There are many ways a seller can mitigate the risks inherent in every transaction. There are guarantees and remedies that can add 20% more to the price. Or you can pay some shares of the merged company.

In addition, you can collect a 'salary' or consulting fee to stay around!

It is beyond the scope of this article to describe in detail all the ways sellers can add value to a deal, but I stimulated your appetite and investigated the thoughts shared in this post.