It’s All About The Money After-all
The market for online businesses continues to increase across the board. More and more investors are looking for online business opportunities in every niche. They are also willing to spend more to do so.
But serious investors are not just buying any website on sale. They have learned to take the time to educate themselves in every aspect of online business acquisition.
These are not your regular eBay bidders but rather sophisticated buyers looking for great opportunities and not willing to risk buying businesses that might make them lose money.
So, If you are considering selling your website or online business, it will take more than brainstorming a price and coming up with some appealing listing copy.
Failure to do your homework will cost you big time. The steps listed here in this article shall help you to get the best returns for your hard work and efforts put into building your site.
12 Ways To Maximize Your Online Business Value
#1. Fix Cash Flow Issues
Anyone considering investing in any website is primarily looking to do one thing; MAKE MONEY.
Few serious buyers consider buying an online business just for the sake of it. They need to know that a profit awaits them. So, if that site can demonstrate good cash flow and is highly profitable, it will be appealing to potential investors. They will see much potential for getting the ROI they want.
If you have cash flow issues with a site that should be making money, it is time to examine why that is.
- Are you wasting money? Are you paying too much for hosted services?
- Are you giving too much content away for free?
- Have you tapped into all the possible markets for what you offer?
- Are you paying too much to outside contractors – for SEO, website maintenance, etc. – that could be done to the same standard at a lower cost?
Addressing these and other issues may help you improve cash flow. In addition, it can allow you to demonstrate that yours is a viable business model, not a volatile one that could crash and burn at any time.
#2. Have Perfect Books
Potential buyers will need to see the overall financial situation of your business before buying. So, you must have all your business’ earnings and expenditures well documented. These should ideally portray increasing or at least stable profits.
Above all, make sure your records are as clear and transparent as possible. The last thing any potential investor wants to see is seemingly fabricated documents. It is enough to send buyers packing since it gives the impression that your business isn’t doing well as you make it look.
Perfect books with positive returns make your offer more attractive to buyers, which increases the chances that they will pay you what you ask.
#3. Increase Profitability
Since the number one goal of buying an online business is to make money, your business’ account books need to demonstrate just that. In addition, investors need to see they will be making more than they spend.
So, if your site is making little to no profits, you must work on that before you sell.
Some methods you can use to increase your site’s profitability include:
- Boost sales: More sales bring in more revenues. So consider polishing your value statements, use targeted messaging, make the purchase process easier, etc.
- Use testimonials and reviews: Studies show that building trust with customers improves the likelihood of spending more. In addition, good reviews help to build this trust, thus boosting profitability.
- Cut down unnecessary expenses: Even with high revenues, it affects your profits if you spend too much. So, ensure you cut down the costs by using cheaper hosting, streamlining your content creators, using free tools, etc.
Higher profits will make your site more attractive and thus allow you to charge a higher multiple for it.
#4. Establish Recurring Income Streams where possible.
Recurring income streams is revenue you regularly generate over given periods, maybe monthly or yearly. It is considered a more stable way for businesses to earn.
Selling websites with multiple recurring income streams will make for a good value proposition. They come in various forms, depending on your line of business.
Common recurring income streams include:-
- Membership subscriptions
- Service plans
- Add-ons for service offerings, e.g., maintenance fees.
The more such streams your site has, the more money you can get out of it. This is because it shows continuous revenue and thus the potential for high returns on investment.
#5. Diversify Your Revenue Streams
Like any promising business venture, your website must show potential for revenue growth in the future. One way to achieve this is with multiple income streams.
Several streams on the platform assure a potential buyer that small, unexpected occurrences will not wholly halt his profits. Also, such a website promises bigger returns on investment in the long run.
For instance, if you run a beauty blog. Your website already looks good with cosmetics sales. Yet, if it also runs affiliate ads, brand display ads, plus beauty course sales, it will automatically attract a higher selling price because of its income diversity.
So, before you put up your website for sale, consider other income streams you can add to it that would increase its overall revenue.
#6. Diversify your Traffic Sources
Having one or two sources of steady traffic is excellent. But given how online platforms work nowadays, such a website is just one algorithm tweak away from losing most or even all that traffic.
This uncertainty is why you need to have multiple traffic sources to appeal to serious buyers.
For example, if your Facebook page generates traffic – and conversions – at a good rate, a potential investor will be less worried about the possible impact of Google’s next Algo update.
Even so, Facebook also has regular algorithm updates. So how much traffic are you getting from other platforms: Twitter, Linked In, etc.?
All these are factors buyers will look into to determine the actual value of your site. So, you have to diversify your sources to be able to get more from your website when you choose to sell.
#7. Hire Employees To Automate Your Time
Managing a site by yourself can be cumbersome and time-consuming. It involves a lot of work in creating and posting content, monitoring the traffic, responding to queries, etc.
When you eventually sell your site, these burdens go to the next owner.
One way to make your site more attractive is to hire employees to help out. They will help you split tasks resulting in increased efficiency. Then, the owner can focus on handling strategy and financial aspects, which could increase profitability.
Employees could automatically increase your site’s value since investors can see that they will not need to invest time and resources starting from scratch. They can always use the existing labor force to continue running the site.
#8. Build Processes And Routines
Like in the physical world, any business worth buying must already have workable processes in play. These could apply to operations, marketing, and other aspects.
If your website cannot run without you, you might find it hard to sell, so fix that first.
Set up processes and routines that you can easily pass off to another owner. Chances are high that potential investors do not have all the time in the world to start figuring out everything about a site they just bought.
So, one with already established routines makes for a more attractive bargain.
#9. Write down your Marketing Plan
When pitching a business to investors in the ‘real world,’ you’d need to have a solid marketing/business plan. In it, you will need to determine what your basic value statement is; you’ll need to have all of the relevant numbers at hand to support your projections.
You’ll need to put together a compelling listing ad that highlights your business and the advantages of buying it. Have all your data ready in a professional format in case an investor needs it.
These will help potential buyers to assess its value. It also demonstrates due diligence, which also shows that your business is probably already well managed too.
#10. Improve upon SEO and Ranking
Decent organic traffic is a critical factor when selling your site. Whereas you can always boost a site with a PPC campaign, no investor will be too keen on buying a business and then immediately invest in increasing traffic with an Ad campaign. They don’t want to spend lots of money on SEO, either.
So, if your organic traffic numbers are pretty good and you have good keyword rankings, you may be able to convince a smart investor of the growth potential.
But, if your site is stranded mid-page, or you just aren’t getting the traffic you hoped for even with high SERP rankings, then you need to look into the issue first.
- Would you need to ramp up the SEO, adopt other keywords?
- Do you need to expand your traffic sources?
Whatever you come up with, you must also understand that even the best practitioners don’t get overnight results. These take time before you can come up with anything substantial.
But, Who Buys Online Businesses Anyway?
Usually, potential buyers will fall into one of several categories:
- The Rat Race Escapee – This buyer has a good corporate job, but they are looking for a way out of the rat race. They’ve saved a chunk of cash (thanks to the aforementioned decent job) but now believe they are ready to strike out independently.
- The Retiree – Baby boomers are retiring in significant numbers at this point. However, many are finding that once they do, they are bored. They see buying an online business as a way to do something more meaningful with their time. Others even see it as a bit of an investment, for when their retirement funds start to run low.
- The Entrepreneur – Some of these folks may already be in business on the internet and looking to expand their online empire. Others may be offline entrepreneurs eager to translate their hustle skills from the ‘real world’ to the virtual one.
- The Strategist – This buyer is sometimes a direct competitor who spies an opportunity to expand their presence in their current market. Or they own a business that would benefit from an online presence/asset that it currently does not have. These buyers are fewer in number than the others, but if you can appeal to them, you’ll often get a significantly over-market value offer from them if they bite.
Where to Find These Online Business Buyers?
You’ve made improvements to your website to maximize its value. You understand the buyer personas you will largely be trying to appeal to. Now here’s the million-dollar question; where do you find these people?
In a nutshell, in more places than you might think. All of the following avenues can lead you to that eager buyer you are hoping to find.
- Suppliers or competitors.
- The ‘Business for Sale’ section of the classifieds, both on a local and national scale.
- Investors forums.
- Databases maintained by website brokers.
- A few basic Google keyword searches for things like ‘websites fo sale’ ‘sell website’ etc.
- Good old-fashioned word of mouth via both your offline and online networks.
- At a reputed marketplace such as BuySellEmpire.com.
Did you Increased Your Business Value
The points covered here are, in reality, just some of the things you can do to maximize the value of your unique website. There are all kinds of variables that go into a website valuation, and every potential buyer will see things at least a little differently anyway. If you are serious about selling your site for maximum value, getting a professional opinion will make a big difference.