The Definitive Guide to Selling a Website is a series outlining the ins and outs of taking a web business or established website ‘to market’.  We’ll show you how to take the proper steps to make a lot of money.

What is the low end?
Anything under $100,000 is a pretty small deal in the grand scheme of things. At this level, you’re not likely to need tons of lawyers pounding out purchase agreements (try something like this instead), nor will you need to spend months bickering on every detail. Often times, buyers and sellers can agree to a deal and do a simple transfer via Escrow.com. This size of deal is sometimes just a domain or a site with no revenue.

Pricing theory
There’s a lot of volatility in lower end website purchases. Revenue is obviously low and tends to be concentrated–coming from a single, potentially unreliable, program like Google’s AdSense. Another issue at this level is accounting related. Most webmasters report profit as simply Revenue – Expenses but don’t include their own labor as an expense. This is a pretty common problem and definitely an issue. Adjusted net profit numbers for small websites can change significantly when accounting for labor–even at a low hourly rate.

Multiples
Predictably, websites in the low end usually sell for a pretty low multiple. Generally, one year revenue or up two 2x net profit would be a pretty reasonable price. This sounds low to many but the problem is the fact that there’s so much uncertainty at this level. Generally, sites for sale under $100,000 aren’t even a real business–they are simply part of something bigger or a sideline for someone. Unsustainable revenues with a relatively short history also come into play here.

Where to sell
The biggest marketplace to buy or sell sites under 100 Grand is Flippa. Be forewarned, the quality of websites for sale on Flippa is all over the place. Some websites are a complete scam and others posted are legit–do strict diligence before transferring any $$$ for a site for sale on Flippa. Beyond that, try business for sale marketplaces like BizQuest and BizBuySell. These sites target pricier listings but due to the mobility of an internet business, websites are likely to generate a lot of interest from people across the country (or world) even with smaller selling prices.

Who might buy your site?
There aren’t many “strategic buyers” looking at this level. A strategic buyer is someone in a related business that acquires you website because of what it can bring to their core business. If you’ve built a solid niche site such as a tool that’s relevant to an ecommerce site or something similar, you might be able to approach some people directly.  You would most likely sell your site to another individual (as opposed to a larger company) who probably operates a network of sites for a living/sideline.

Creative Commons photo courtesy of amagill.

The Definitive Guide to Selling a Website is a series outlining the ins and outs of taking a web business or established website ‘to market’.  We’ll show you how to take the proper steps to make a lot of money.

One of the most exciting parts of being an entrepreneur is an EXIT a.k.a. a liquidity event.

Liquidity event = selling all or a piece of your business.

Selling a business is a common path to individual wealth. (There are other terms for “selling”, i.e. refinancing, selling partial ownership, and so on. These all fall under the category of a liquidity event.)

Many people say real estate is where the wealthy keep their net worth… well, selling a business is where they earned that net worth.

Selling Your Website or Web Business
Selling your website may not necessarily make you a millionaire, but a liquid six-figures or more sure sounds like a nice shot in the arm, eh?

Especially if your website is a sideline to a day job, that amount of money could allow you to become self sufficient and work on growing businesses that you own, day in and day out.

The sale itself isn’t making you rich in many cases, but it’s sure affording you the opportunity to have a better shot than most!

Our Experience
From our experience, there are a few categories of internet business sales. We’re not VC-backed, Silicon Valley hippies, we’re just a group of hard working entrepreneurial marketers that build real businesses on the web. We’ve had 2 successful exits and created many more sustainable businesses online.

That’s where we’re coming from.

On that note, our numbers may reflect “regular Joe” dollars. The fact is – the vast majority of internet businesses are sold in the sub-$5,000,000 range and this area is really our sweet spot.

Here’s the deal sizes we’ve had experience with and I’ll delve into more deeply in this series over the coming weeks:

Low End – Sub $100,000
Middle Market – $100,000-$2,000,000
“Big Deal” – Over $2,000,000

This represents our experiences and what we’ve learned over the years. It is NOT necessarily representative of anyone else’s experiences.