The Right Time to Sell a Website

Selling a Website: 5 Whys AnsweredHave you ever considered selling your website? You need to, and here’s why:

Of all the businesses I’ve started over the last 6 years, the MOST MONEY I’ve ever made is when I SOLD the website businesses!

There are many reasons why selling your site just makes sense. Here are the big ones…

1) You get a larger lump sum cash payment NOW vs future “potential” profits.

Let’s face it, the internet changes faster than ever before. Your website that is currently making $500 per month with Adsense will not likely be making $500 per month forever. What happens if your traffic slows down? What if Google changes the percentage of revenue they share with you? What if the internet blows up tomorrow? (ok maybe not that extreme, but you get the idea)

Money in the bank now is ALWAYS better than potential money down the road

2) You get to work on something else if you want

For me, one major reason I sell my websites was because I get bored with them! My typical project lifespan is about 12-18 months, then it’s time for me to sell and move on to something else. There are a few other reasons for this timeline that I will explain later.

3) It’s a lot more exciting than “running” a website

Think about it. You have a website that is making $1,000 per month net profit every month. That’s not all that exciting of a paycheck coming in. Then you decide to sell your website business and someone makes you an offer of $24,000 cash RIGHT NOW. Now that’s a nice paycheck at one time! (Note, there are many factors that go into pricing your website which I will cover in future tips, but the majority of attention is given to profits of the website. The sales price is usually based on a multiple of the profits each month + whatever other assets the website has such as content, subscribers, traffic, etc).

4) Cash influx gives you lots of options

When you have a website making $1000 per month, you don’t have a lot of options to do with your money. When you have $24,000 sitting in your bank account, you have a lot more opportunities available to you. Cash is king in this world and by having excess cash sitting around, you can do things you never used to be able to do. Some basic things include:

– You can use some of that money to buy another website and fix it up to be resold later (like a real estate investor).

– Getting a loan for a house/car/boat, etc. If you have cash in the bank, you are much more likely to get a loan and a better interest rate than you are if you just have a small monthly income coming in. The lenders will see this cash as liquid capital available to pay back their loan (ie collateral).

– Pay cash for your next vehicle. There is no better feeling than walking into a car dealership, writing a check and driving home the car you just bought. Plus, it’s easier to negotiate a good deal when the dealer knows you are a cash buyer. They won’t want to let you walk away knowing your sale is just a check signature away.

– Safety net in case something goes wrong. Life happens, people lose their jobs, cars break down, hospital bills pile up, you name it. If you have excess cash due to selling a website, you will have a safety net to cover these “exciting” life issues.

– Take that vacation you’ve been putting off for years. With a smaller monthly income from your website business, it’s amazing how fast the money can and will be spent. It’s hard to save extra money when it comes in slowly over time. Selling your website solves this problem.

5) You can retire!

Let’s say you work your butt off and you have a website making a net profit of $15,000 per month. That’s a nice monthly income, BUT you have to WORK every day, every month to get that income. Now let’s say you decide to be smart and sell this cash cow to a website/business investor. You may get an offer of $350,000 to $500,000 for your website.

If you get $500,000 for your website, you can take that $500k and invest it in either stocks, real estate, bonds, cds, whatever. For example’s sake, let’s put this money in the stock market which historically returns about 8% interest per year.

$500,000 x 8% = $40,000 per year = $3,333 per month

So, by selling your website you now have a lump sum payment of $500,000. That $500k is also WORKING FOR YOU, making you $3,333 per month EVERY MONTH, FOREVER, and YOU DON’T HAVE TO WORK to make that money!

If you can live off the interest alone, you will never have to touch that $500k.

What if you sell your website for $1 million? Can you live off a measly $6,666 per month the rest of your life?

Sure, these are simplistic examples, but they are to prove a point. There are obviously taxes and different interest returns for investments, etc.
I know it sounds like the possibility of selling your website for $1,000,000 is a bit far fetched, but it’s really not! Let’s run some more numbers…

To sell for a cool million, you’re site needs to generate about $30,000 per month in profits for at least 12 months straight. That comes out to about $1,000 per day in profits.

Do you think you can work hard enough right now, to get your business to make $1,000 per day? Especially when you know that you only have to bust your butt for 12-18 months, and then you can just cash out and live off the interest forever!

It’s a motivating concept really. If you break down how much you need to make per day and then you tell yourself you only need to do this for a year or two, it doesn’t seem nearly as overwhelming as trying to build a business that makes millions per year.

Of course, your goals may be different. Maybe you just want to have $50,000 in the bank, not a million. That’s even easier! All you need is a website that makes $1800 per month for 12-18 months and you’ll be able to sell your website for $50k cash without much trouble.