Many entrepreneurs idolize billionaires who have built the same company for 20 years. But the truth is, that way of doing business is not the norm for most online business owners.
A large number of successful founders spend only a few years building their online business to five or six figures before they move on, using the skills and experiences they’ve gained to grow their next business even larger.
The trick is identifying the best time to sell your business. This is particularly difficult for affiliate site owners given the volatility of the SEO industry.
At the end of the day, there’s no formula for finding the right time to sell your affiliate site. It depends on each unique site, and your goals and needs as the owner.
That said, there are a few points you should consider if selling is on your mind.
In this article, we’ll take a closer look at when to sell your site, when to hold on to it, and how to evaluate a purchase offer on your business. Let’s dive in!
When to Sell Now
There are a variety of reasons why you might want to sell your affiliate site.
- You’ve hit a wall and maxed out what you can do with the site
- You need the money right now
- Selling just before peak season can get you a premium multiple
1. You’ve Hit a Wall
Holding on to your site longer than you need to only puts you at risk of commission cuts or Google algorithm updates eating into your profits – and reducing the value of your business.
Often, the larger a business becomes, the more skill, time, and capital are required to scale it further.
If you’ve maxed out your ability to take your site to the next level, it will likely never be worth more than it is right now. The best thing you can do is sell the business and reap the rewards of your hard work.
2. You Need the Cash
One of the most common reasons for an affiliate site owner to sell their site immediately is because they need the money from the sale.
As successful as your site may be, sometimes you need an injection of cash to help you level up another area of your life. You may need startup capital for another business, to purchase a new home, to fund your retirement, or you may want to invest the cash in another asset class.
When you need cash, it’s tempting to aim for a sky-high sale price. However, it’s essential to be realistic about the value of your site.
If you really need capital, you’ll probably prioritize a quick sale. And overvaluing your business can drastically slow down the sales process, reducing your pool of potential buyers.
If you’re looking for a speedy sale, consider selling through a business broker. Brokers have a large pool of buyers that they can market your business to. Plus, brokers have done this before, so they’ll handle the paperwork, sales process, and transfer of the business much faster than you would on your own.
Lowering your asking price often results in a speedier sale, but make sure you bake in a buffer on your asking price so that you aren’t in danger of falling short of your cash requirements during negotiations.
3. Sell Before Peak Season
If you’re considering selling your content site, but aren’t sure when the best time is to sell, aim to sell the site before your peak earning season.
By selling your site shortly before your peak season kicks in (usually Q4), you can dangle the enticing carrot of maximum earning potential in front of hungry buyers.
After all, an online business buyer’s main motivation is to generate a return on investment (ROI) as soon as possible. By acquiring your site as it goes into peak season, the buyer can take advantage of the increased profits and get an ROI more quickly than if they acquired your site after peak season.
This also gives you more negotiation leverage and improves your odds of avoiding a long, drawn-out sales process. Buyers will need to act swiftly to close on your business before peak season starts.
If you choose to go down this route, be sure to put your site on the market well in advance so that buyers have time for due diligence, site transition, and optimization before peak season kicks in.
When to Keep Your Site
1. You’re anticipating growth
Another way to take advantage of your peak season is to ride out the wave of growth and then sell your site as things start to level off. If you’re anticipating significant growth, not only will your profits increase, but so will the value of your business.
That said, you don’t want to exhaust all growth opportunities before you sell. Low-hanging fruit and growth levers for buyers to pull are attractive qualities that can lure buyers in when you put your site on the market.
2. Implemented new strategies
One of the key things buyers look for in a business is stability.
If you’re thinking of making any changes to your affiliate site, such as using new marketing tools, adding new affiliate partners or revenue streams, or trying new SEO techniques, allow for a cool-down period before you sell your site.
In the same way, if you’ve just invested in a new cluster of content that hasn’t fully started to rank and earn money yet, you might want to hold off. Chances are, if it does rank and bring in revenue, it’ll be worth more later, and it may be best to hold off.
These types of changes often result in fluctuations in your metrics or earnings that could scare off interested buyers.
3. If you don’t have an exit strategy in place
Many entrepreneurs don’t think about exiting their business until a significant change occurs in their personal life or market conditions require them to close or sell the business.
By this point, it’s often too late to make any meaningful optimizations to your business that will increase your valuation.
That’s where an exit strategy comes in. An exit strategy is a blueprint that details your goals and objectives for the sale of your business and outlines what you need to do to meet those goals.
It also includes ways to make your business more attractive to buyers, like streamlining processes and tasks, eliminating redundancies and points of weakness, and reducing your level of involvement in the business as the owner.
Once you’ve created a detailed exit strategy, you should have a clear time horizon for the optimal time to sell your site.
Test the Market
At the end of the day, your site is only worth as much as a buyer is willing to pay.
The best way to gauge the level of buyer interest in your site is to list it for sale and see what happens.
This will give you a feel for market demand, and you can get valuable feedback from buyers on the strengths and weaknesses of your site.
While your site is listed for sale, you can continue to operate it and earn an income as normal. The only thing you have to lose is the time taken to review offers and speak with buyers.
If you choose to go this route, it’s best to list your business privately rather than through a broker to avoid exclusivity contracts and binding sales agreements.
How to Evaluate an Offer
Once your business is listed for sale you’ll start receiving purchase offers from buyers.
But not all offers are created equal, so how do you separate the serious buyers from the tire-kickers?
First up, it’s crucial to understand the value of your business. This will help you identify and steer clear of lowball offers.
Here’s the valuation formula we use at Empire Flippers:
Net Profit x Multiple = Valuation
Your net profit should be based on a rolling twelve-month average.
The multiple is a bit more tricky to calculate. It’s essentially a representation of the stability and future growth potential of your site.
When calculating the multiple, you need to take factors such as revenue sources and diversity, business age, traffic sources, domain authority, and traffic diversity into account.
Once you know the value of your business, the next thing you need to consider is the authenticity of the interested buyers.
Do not reveal any trade secrets or sensitive information about your business to buyers until they have fully committed to the sale.
You don’t want to accidentally give this information to competitors who may be posing as buyers. You should also ask buyers to verify their identity and provide proof of funds to avoid time-wasters and scam artists.
Trust your gut when selling your affiliate site
When push comes to shove, when and why you sell your affiliate depends on your unique circumstances.
Examine your personal situation and goals and assess your affiliate site’s role in achieving those goals.
Remember, at the end of the day, your business is simply inventory. An asset that you can leverage and sell as needed.
If you decide that you’d prefer to grow your site further instead of selling, consider using Lasso’s marketing tools to scale your affiliate income.
And if you’re ready to make a profitable exit, head on over to the Empire Flippers to list your site for sale.
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