How To Sell An Online Business For Top Price
An article by yours truly on how to get top dollar when selling an online (or any) business.
It’s a simple matter of your business having the right attributes, attracting the right buyers and negotiating the right deal. But it’s the latter two that make the most difference. Unknown to many vendors of smaller businesses, there a large premium to be had from putting more effort into finding synergistic buyers and in having professional representation through the negotiation.
While the assets underpinning your business (and your cash flow) do matter, they constitute but a small part of the price you can extract from the market. Creating the right presentation, attracting the right buyers, and getting them to compete against each other through a smart negotiation process, can leverage the assets you are selling to get you a price far in excess of “fair value”.
How does the presentation make a difference? In most sales of small businesses the vendors say exactly the wrong things. They say the things that they believe will impress buyers but these tend to have the effect of severely damaging price. Further, vendors tend to take a passive approach to finding buyers. They advertise on well known portals and sit back in the expectation that buyers will find them. As I argue in this article, and in the linked further research, such a passive process does not attract the best buyers, the buyers who can afford to pay way above market price, the buyers who desperately need to acquire your business or a business like yours.
Your website could be worth a lot more than you think. But you won’t get that price if you go to market. Why? Because you have no idea how to actually extract that value – you don’t know where the value actually lies (no, it’s not where you think it is) and, more importantly, you don’t know how to convert that value to cash in the bank (which is an artform in itself). This article aims to remedy those shortcomings and to arm you to extract maximum value from your website when/if you decide to sell it.
There is no end of junk information on the internet about how to value websites. And there’s no shortage of so called valuation “tools”, not to mention “gurus” with theories and formulae. For example, some of these so called experts claim that you can arrive at the value of a website if you know the “going multiple” in the industry. Simply multiply your site’s earnings by that number and … voila?!
For example, if the going multiple is 3x annual income, the value of a website earning $10K per year is $10K x 3 = $30,000…. How To Sell A Website For Top Money