Note: If you’re reading this article and currently have a website you’re looking to sell in the six or seven figure price range contact me and I can give you some advice.
I recently sold Netbook Reviews (one of my larger websites) in a deal worth six figures. I can’t share the specific amount for obvious reasons but needless to say based on the sale of the website and my variety of other online income sources I easily surpassed my 2010 goal to earn more than $150,000 this year. This is very exciting because in the previous year while working a full time sales job I made only $60,000 even though I surpassed my sales plan every single quarter and worked 50 hours a week (and I still managed to get fired hah hah).
The goal of this post is not to brag or anything the goal is to teach you some of the things you should know if you’re trying to build and sell a larger website property for six figures or more. First let’s cover what it takes to build a six figure website and then I’ll tell you how to sell it.
How To Build A Six Figure Website:
If you’re trying to sell a website for six figures or more you need to look at it from the perspective that you’re trying to be the best in your niche. I built Netbook Reviews from scratch back in early 2009 just months after netbooks were introduced to the market. I knew very early on that I wanted to build a true authority style website so I did what came naturally – I worked hard and hustled.
I spent countless hours contacting companies for demo equipment, seeking out news on upcoming models, flying out to industry conferences, writing about netbooks and focusing on being the best independent netbook review focused website possible. I did video based product reviews when most of my competitors would simply rewrite articles they found from CNET or other media giants. The whole time the name of the game was to be the best and to this day the website is one of the best resources to determine which netbook you should buy to meet your needs.
If you want to build something that can sell for a sizeable chunk of money you need to put in a ton of hard work and countless hours to build a website worth six figures or more. There is no push button solution and there is no right way to do it. I could talk for hours about everything I did for this website, but the path will be different for each niche. The main thing I want to get across to you is that it takes a lot of hard work to accomplish this.
How To Sell A Website For Six Figures:
During this sales process I’ve learned a lot about an industry that isn’t talked about very often and can feel very mysterious to outsiders – high end website sales. For example, if I mentioned the word “Flippa” there is a good chance you’d know what I was talking about, but if I mentioned Founders Investment Banking you probably have never heard of them.
There isn’t really a huge well known online marketplace for larger websites worth 100k+ because when you’re dealing with those valuations there’s a lot bigger picture that needs to painted besides displaying screenshots of adsense stats and google analytics data.
In my case, I used an investment banker to help sell the website and they required a ton of information before we even got started. I sent over detailed traffic logs since the inception of the site, income statements from my business records, screen shots of my earnings and an in depth excel spreadsheet outlining the income sources by month in a graphed format. I also included ideas for the new business owner on ways to improve the website’s traffic, earnings, who they could hire for writing etc. It’s also important to find a good fit if you will be working with the new owner during a transition period (which is frequent occurrence when you’re dealing with larger website sales).
Why I Used An Investment Banker To Sell My Website:
Investment bankers have access to people and businesses with money – lots of it. I don’t have access to these people and business because I don’t have enough money to play at their level (yet). So if I have to give a small percentage of the final sale price to someone who provides me access to these buyers that see the value of my website then I think it’s more than worth it. The investment bankers can also provide very good insight into how to structure a deal and take care of negotiating with the buyer. Although I’ve bought and sold plenty of websites in the past having their expertise for my first six figure sale was well worth it.
I don’t have anything against Flippa and have even used them in the past, but they’re not the best place to sell a website worth six figures. I believe they cater more toward website sales under $100k, just look at the high end section of Flippa to see what I mean. Over half the websites are scams/fake with most selling for less than $50k. Simply put, if you want to maximize the value for your website sale you need to find the right buyer that is a good fit for both parties and in my experience investment bankers do a great job of doing that when you’re selling a website for six figures or more.
What To Do With The Money Once You’ve Sold:
Once you’ve sold the website it’s easy (especially if you’re an American) to think you need to go out and spend all of the money on something to reward yourself for doing a good job. Now as much as I’d like to go buy the 2011 Subaru WRX STI in cash and sell my “old” 2008 WRX it would be the dumbest thing I could do.
Instead I plan to reinvest the funds into my business and other projects that I had set aside because of lack of capital. Now that I have some money to work with I will push forward with them in 2011. The goal that I’ve been made fun of for sharing is to buy the Guthrie Castle in 20 years and to improve my odds of doing that I need to take the funds I’ve made here and reinvest them into new projects. The side benefit of reinvesting now is to help limit my massive tax bill. In my case, the sale went through near the end of the year so I’ve been scrambling around looking for deductions and trying to find new websites to buy because as it stands right now I’m going to owe a lot to the government.
The point I’m trying to get across is that if you think about your website sale like the next step in your business and less like a windfall inheritance from a rich uncle you’ll do much better moving into the future.
Need More Specific Advice?
Ever since I sold the website I’ve been doing considerably more consulting and if you need in depth detailed website business advice you should check out my consulting page. As always, if you’re just looking for some quick advice I’m more than happy to answer any emails I receive as well. I should also mention that if you’re looking to sell your website and it’s worth less than $100,000 I might buy it. Fill out the details here: Get Rid Of Your Website
Questions? See you in the comments below.
Note: I found my investment banker via an introduction from someone I met at Elite Retreat. I am 100% certain that without that introduction they wouldn’t have agreed to help sell the website for me. Needless to say it just goes to show again how powerful in person networking events are (even those that cost $5,000 to attend).