Knowing when it’s the perfect time to sell your website is never as cut and dried as we’d hope.
Most of us have dreams of getting an offer almost too good to be true, an offer that would be impossible for us to turn down for the websites that we have built – an offer that could completely change our financial future almost immediately.
But even then, it’s hard to know if that’s the exact right time to sell your website or if you should hold on a little longer, squeezing just a little more value (and a bigger return) out of your website before you hand the keys over to someone else.
To help make this decision a little easier, we’ve put together this quick guide.
Below we go over some of the most important things you need to remember when making this decision, the kind of factors that can make or break whether or not you sell your website or decide to hold out just a bit longer.
Let’s get right into it!
It All Starts with a Proper Valuation
Right out of the gate, the most important thing you can do when thinking about selling your website is to run a valuation audit.
Any website you are considering selling is one that you have likely invested a significant amount of time, energy, and resources into.
In today’s hypercompetitive business landscape online, the chances are good that you’ve had to spend some long nights working to build your website – and that you have put a significant amount of money into making it successful, too.
Well, without knowing how much your website is worth right now (at least a ballpark figure), you’ll never have a good idea of whether or not it’s time to move on or keep pushing.
Traffic and Revenue are Everything
Two of the most important things to consider when doing this valuation audit are the amount of traffic that you are generating and the revenue that you are bringing in.
Traffic is king in the world of online business these days. The more traffic you’re able to bring in (the more unique visitors each month you can attract), the more successful your website is going to be – and the more valuable it’s going to be, too.
Revenue is also a big piece of the puzzle when you’re thinking about whether or not it’s time to sell your site.
You’ll want to show potential buyers that this was and can be, an income producing asset right away. Even just a little bit of revenue is much better than no revenue at all!
Current Multiple Valuation
Of course, the actual valuation of your website is going to be a multiple of that revenue number – usually 30 to 35 times the multiple of your monthly revenue figures.
To put it simply, this means that if your website is bringing in say $1000 a month pretty consistently, then your site could quite easily sell for between $30,000 and $35,000.
This multiple (30 to 35 times the monthly revenue) is unique to the website world, but it’s a pretty standard fare across the board. Websites in almost every niche and marketplace are going to be able to command this kind of multiple, though some are going to be able to charge even more!
It’s also a good idea to remember that this initial valuation audit is just shooting for a ballpark figure of what your website may be worth to someone, should you choose to sell it.
These values are not “set in concrete”.
In hypercompetitive niches and markets, already successful websites may be able to command premiums of between 45 and 50 times multiples (and maybe even more).
In less competitive niches and markets, however, the going rate may be a little bit less. Sometimes around 25 to 30 times multiples of the monthly revenue.
Still, you’ll want to run the figures to know what kind of lump-sum you may be looking at if you decide to exit a website moving forward.
It’s not enough to just think about the valuation of your website as it sits today, though.
There are plenty of websites that can reach pretty impressive traffic and revenue numbers with very minimal effort at all, maintaining those numbers with the bare bones “upkeep”, with plenty of potential to double or triple traffic and revenue output moving forward.
This is why it’s important to think about the kind of future potential that your site may have if you were to hold on to it, double down on your investments in time and resources, and grow the site on your own to increase the traffic and revenue numbers.
Some people find that sites they were considering exiting at great multiples (35 times monthly revenue) were deals that only look good on paper.
With just a little bit of extra effort, those same websites could have had traffic and revenue numbers that doubled or tripled. That means more initial income every month for one thing, but it also means a much higher valuation for very little time, very little extra energy, and very few extra resources invested.
Something to consider, anyway.
What Are Your Goals?
After running the numbers on your website, it’s important to think about what your goals are, at least as far as potentially selling your website is concerned.
What kind of website were you looking to build in the first place?
Did you always plan to build your site to a specific level and then exit once you reached that?
Did your plan adjust somewhere along the way?
Would you be happier if you exited by selling this website and shifted your gears somewhere else?
Every entrepreneur has unique goals that they set for themselves, and only you are going to know whether or not selling a website at any one particular point in time is going to help bring you closer to achieving those goals in the future.
Looking for a Windfall Exit or Recurring Income?
This is a big one – have you been hoping for a windfall exit with the sale of your website, or are you more interested in generating recurring monthly income with eyes on a windfall sale later on in the future?
Plenty of entrepreneurs who build websites to sell, do so with the express purpose of hoping to “flip” them for a big payday as soon as they get revenue to something like $1000 a month, over a 3 to 4 month stretch of time.
The whole point of building websites for those kinds of entrepreneurs is to cash in for between $30,000 and $35,000 a pop, moving on and building new websites once those exits have been successfully completed – rinsing and repeating the process over and over.
Other entrepreneurs, though, like the idea of building and growing websites as income producing assets.
This kind of website builder dream about having a portfolio of 10, 15, or 20 websites producing $1000 or more in monthly income. They only consider selling websites if the evaluation is right, the windfall is significant, and they’ve been able to “ride their winners” for a while.
To be clear, there’s no real right or wrong approach here.
It all comes down to the kind of entrepreneur you want to be, the kind of websites you want to build, and the amount of time and resources you want to push into building these kinds of assets to begin with.
How Much Do You Want to Keep Investing in This Site?
Every single website is going to require at least a little bit of care, a little bit of maintenance, and a little bit of upkeep.
Some websites, on the other hand, are going to require a lot of attention on a regular basis – especially those in the more competitive and lucrative niches and markets.
You’ll need to think about how long you want to keep investing in the site, how long you want to keep working on it to increase its profitability, and how much money you want to inject into the website on a regular basis to grow its traffic and revenue numbers.
Lots of entrepreneurs enjoy the day-to-day grind of website maintenance, when they know that they are pushing towards a bigger payday when they exit. Others are perfectly happy to spend money on firms or teams that will handle the heavy lifting of this work for them, recognizing that they’ll still get a solid cut when they sell their website.
And then you have others still who aren’t shy about putting in as little energy and effort as possible once they get a site to a specific point, selling it and then moving on to something new and exciting to begin the website buildup and sale process all over again!
What’s Your Future Forecast?
When you get right down to it, determining whether or not you sell your website has a lot to do with future forecasting and your ability to do so in as informed a way as possible.
Nobody can predict Google shaking things up with a new change to their algorithm that wipes out or dramatically increases otherwise consistent sources of traffic.
Nobody can predict national or global trends changing the interests of a customer base away from or towards new products and services you’ve been promoting.
But you want to do your level best to try and “future proof” your website before you move forward with any sale decision.
You’ll want to know what the landscape in your market will look like in six months, a year, and five years down the line – and what your website will look like at that same time. You’ll want to consider what demand will be like for your site in the future as opposed to right now, as well.
The clearer you can get about what the future holds for yourself, your website, and its prospects for sale later down the line, the easier time you’ll have determining whether or not now is the right time to sell and start building something new!