Advice on How to Sell Your Websites

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Advice on How to Sell Your Websites

Reprinted with permission of VotanWeb.com

If you are serious about selling your website then you will need to spruce up your financial statements, budgets, and business plans. Running your website as if you were preparing to sell it will improve your management practices and increase the value of your website. If you receive an offer that you can't refuse, being prepared will put you in a great position to close a deal quickly.

In researching my book, “How to Sell Your Website for Top Dollar”, I interviewed over 200 entrepreneurs who had sold their websites. Some issues came up repeatedly that have little to do with the mechanics of getting your website ready to sell but that instead require you to do some soul-searching. What do you want for yourself--in the future? How much of your self-esteem is tied up with owning and running your website? What will you do next? Thinking through the implications of a sale for you and your family will go a long way toward helping you select the sort of buyer you'd be most comfortable with.

There are two basic types of buyers, financial and strategic. Financial buyers make up an enormous segment of the market. They look for websites they can buy using debt financing for 50% to 75% of the price, and that have sufficient cash flow to service that debt. With few exceptions they value a website by using a multiple of four to six times earnings before interest and taxes (after making adjustments for expenses that would change for a new owner). There are disadvantages to selling to a financial buyer: there are no synergies--such as partnerships with complementary websites. There will certainly be pressures to increase the cash flow because of the added debt. Financial buyers are in business to make deals, so they may overlook some weaknesses. They often leave day-to-day website operations unchanged, but they buy with a view to selling, and they don’t give a damn about your vision for the future of the website.

Strategic buyers expect synergies with their other websites. Because of these synergies, they can afford to pay a premium, but they may not need to because they already have an intimate knowledge of the market. They may know your websites strengths and weaknesses better than you do. Therefore, strategic buyers offering premium prices are in short supply.

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