I’ve been asked a few times why I don’t tend to publish guest posts here on James McAllister Online. The truth is, I’m very selective with who’s content I publish on here.
A few weeks ago Thomas Smale, the co-founder of FE International, contacted me for an expert round-up post on FE International’s blog called “How To Make Money Online With A Niche Website.”
A few email exchanges later, Thomas asked me if I’d be interested in a guest post for my site. Knowing the quality behind his work, I couldn’t refuse. So without any further ado, here’s Thomas!
Q&A With FE International
So, you want to sell your website? At FE International we have years of successful transaction experience selling both large and small websites in a variety of niches such as health, writing, photography, fashion and travel to name a few. Here are some of the common questions asked by individuals wanting to sell their websites.
Should I Sell My Website or Blog?
Only you can answer this question but here are a few points that will help determine whether you are ready to sell:
- Did you have an original exit date in mind and you are closing in on that date?
- Did you build your website with flipping it being the end goal?
- Do you want to release the cash tied up in your asset?
- Do you want to take your online business experience and expertise and try a different business model in the same niche or a different niche altogether?
- Have you lost the passion for your business and are no longer giving it the attention it needs?
- Have you personally taken your website as far as it can go and it requires a buyer with a different skillset?
Depending upon your answers to these questions you will be able to quickly determine whether you are ready to sell.
How Much Is My Website Worth?
There is lots of inaccurate information when it comes to website valuations. Automated tools do not provide accurate valuations and are usually extremely far from reality. Every website will have nuances which will affect the valuation. There are no standard industry multiples for any online business or website. An experienced website broker, using industry experience, can analyze all aspects of your website.
At FE International, the average sale price is approximately 2-3x annual net profit for businesses in the $20k-$2m range. We also use “seller discretionary income” instead of net profit. This is where we ‘add back’ costs that are not requisites for the new owner but you have taken for personal benefit, for example, a company car.
Just make sure you do your homework when brokers offer extremely high valuations or generalized multiples that don’t take into account your own website’s variables. Disreputable brokers will use this method to entice sellers to list with them. The end result is that you will end up with a grossly overpriced valuation and your website will not sell.
If you would like more information on this, here is a more in depth guide to internet business valuation.
Can I Increase The Value Of My Website Before A Sale?
As we’ve discussed, valuing a website involves a variety of factors. However, here are a few things to take into consideration before a sale. If you’re not at this point, you should consider implementing these before moving forward.
- A history of stable or growing revenue.
- A growing niche or industry, upward trends for a specific topic.
- Solid backlink profile.
- Frequent posting / updates over past 6 months.
- An engaged and active large mailing list that is monetized.
- Website is correctly optimized for mobile.
- Diversified traffic sources e.g. PPC, organic, referral and social.
- Streamlined and scalable systems and processes.
- No past or present legal issues.
- Hands off and minimal owner input.
What are My Options for Selling My Niche Website?
Depending on how much profit your website is making will affect your best course of action. If your website is making less than $500 per month, you can try selling your website through a marketplace such as Flippa or FreeMarket.
If your website is making between $6k-$1m net a year you should strongly consider working with an experienced website broker. A website broker can provide practical advice throughout the sales process and also provide guidance on how to maximize the value of your website before you sell.
What Are The Main Benefits To Working With A Broker To Sell My Website?
Website brokers exist to help people like you sell their websites. Here are some of the key benefits of working with a broker:
- Brokers will have a pre-existing network of buyers who will also have been qualified.
- Selling a website is a time intensive process and a broker can help expedite the process.
- Selling a website can be an emotional process and a broker provides sound objective advice.
- Reputable brokers use non-disclosure agreements to keep the website sale confidential.
Working with a broker gives you access to their wealth of experience and expertise in selling websites. FE International have the largest full-time team in the industry and have completed over 250 transactions.
I Am Ready To Sell My Website, How Do I Get Started?
At FE International, we generally ask for three things upfront to establish a fair and accurate valuation of your website.
- Access to Google Analytics to check traffic data.
- Ideally, 12 months of financial accounts (more is even better).
- We’ll ask some simple questions about your website.
We then conduct due diligence on your website to establish a valuation. If your valuation is below what you wanted to exit at, we can provide advice on how to increase the value of your website. If you’re happy with your valuation, we can assist with your website sale.
How Long Will It Take To Sell My Website?
The length of time it takes to sell a website depends upon factors such as the website size, the business model, the individual seller and the complexity of the deal. Smaller websites with less moving parts and high-levels of automation, are generally sold quicker. At FE International, 85% of online businesses sell within 60 days.
Get To Know Thomas!
Thomas Smale originally co-founded FE International in 2010 having owned and run several successful websites in a variety of niches. If you would like to sell your website and receive an expert valuation, feel free to get in touch with one of our brokers.