With 15+ years experience buying and selling websites as the CEO of micro private equity firm Domain Magnate, I have helped prepare hundreds of websites for sale and successfully managed and negotiated hundreds of deals. From my experience, the preparation stage of selling a website is vital in making sure you find the right buyer, negotiate the right price, and transition the business to new hands as smoothly as possible.
Below I will outline what I have found to be the key areas to focus on when preparing to sell a website. Whichever stage you are at in the journey of selling a website, make sure you have all these bases covered. If you don’t, you may not make the most of your sale and could end up leaving money on the table.
Prepare your proof to sell your website
Proof is the key to keeping a buyer’s mind at ease. Who will want to buy a site if they aren’t sure that it will ACTUALLY bring in the traffic and revenue you say it will? The more solid historical data you have available to show potential buyers, the more likely you will fetch your desired asking price. If you can, aim for 12 months of solid revenue data that shows your business is profitable. 12 months is enough time to accurately show trends and account for seasonal peaks and troughs. If you sell through a marketplace or broker, you will usually need to provide between 6 and 12 months of data. Buyers will also request these stats as soon as they start their due diligence, so this point is non-negotiable.
What proof should you have to sell a website?
- Financial data – pull together consistent data on the revenue your site generates month by month, you can do this with a P&L (Profit and Loss) statement that records your revenue and expenses, proof of sales, and ad spend reports
- Traffic data – how much traffic goes to your site and where does it come from? Use tools like Google Analytics to keep track of traffic and prove it is genuine and high quality
- Proof of ownership of the domain, trademark, brand, etc
A good tip here is to keep your website data separate from everything else. If you own other sites, track affiliate revenue, ads, and expenses for each site separately. Buyers want to see data as quickly and easily as possible, so keep your business and personal accounts separate. Having a dedicated bank account for your site can make tracking way easier and clearer for potential buyers.
Document your systems
Just because you are used to how your business operates, it doesn’t mean someone else will be. It is a good idea to prepare SOPs (Standard Operating Procedures) on all your processes from order processing to keyword research. These are essentially step-by-step instructions to every part of your business and can be a lifeline for a new business owner jumping in the deep end.
You might create SOPs for:
- Digital login sequences
- Managing vendors
- How to deal with common problems
SOPs can help your business run smoothly and will make the transition to a new owner smoother too. SOPs are attractive to potential buyers who are looking to take over an already well-oiled profit machine.
Step back from the business
When you sell your business, you will not be going along with it. Therefore it is important that your business does not rely heavily on you or your continued involvement to operate. For example, are you the face of the brand? Or do you provide a specialist skill that no one else can? If so, start looking for ways to remove yourself from the operations of the site. Whether that means creating detailed handover instructions or replacing personal branding with company-based branding, if the site does not rely on you, it will be easier to sell. It will hopefully reduce follow-up questions from the buyer down the line too.
Are there any changes you could implement to optimize performance and monetization? Could you easily improve your SEO, diversify your traffic sources, or automate repetitive processes? If so, it is worth taking some time to do this before you sell. Building your organic traffic, for example, can be a smart idea. It has high-profit margins, long term stability and will be easy for a new owner to maintain. Especially compared with relying on expensive and short-lived paid advertising or influencer promotions. Improvements like this can be an easy way to boost your asking price and make the site more attractive to buyers. If you don’t, you could be reducing your chance of selling, leaving money on the table, and even leaving the buyer with an easy opportunity to capitalize instead of you.
Consider the following:
- Clean up design or backend issues
- Replace repetitive or time-consuming tasks with automated tools
- Improve SEO
- Diversify traffic sources – organic, social media, email marketing
Do your research
It is important to have a good understanding of the current market when you are trying to sell a website. How much is your site worth? What do similar sites sell for? What kind of person will be a potential buyer? What kind of concerns will they have?
You will eventually need to value your site so you can determine what asking price you can ask for. There are various different ways to estimate your site’s value:
- Earnings multiples formulas
- Compare similar sites
- Traffic value
A good place to start is doing some research into similar sites to see what they sold for. You can begin finding this information on marketplaces like Flippa and checking out their recently sold sites that are similar to yours. Whether you will be doing a private sale or going through a marketplace or broker to sell your site, once you have a ballpark figure and have valued your site you will be able to enter the market with more confidence.
Sell with specialists
When selling a site you can either choose to sell your site privately or go through a marketplace or broker. If you already have a list of contacts, a private sale could be a good option. Equally, if you are experienced at selling sites, it is possible to find high-quality buyers by listing your website in groups and forums. However, in general, using a third party to help sell your site will minimize risk as they will help support you through the whole sales process. They can help with everything from prepping your site, facilitating negotiations, and vetting buyers which allows for a smoother transaction. Of course, a broker will do a much more thorough and personalized job than a marketplace— but will be pricier too. It all depends on how much experience and knowledge you have in this area, and how much you are happy to spend.
Another great potential avenue for sale is to sell to strategic or investor buyers, like Domain Magnate. Investor buyers are seasoned professionals who have already completed many transactions. This means they are reliable, have large amounts of capital upfront, and may be able to take a site off your hands quickly. This can be perfect if you are looking for a smooth and rapid sale and want peace of mind throughout the whole process.
While there is a lot to do to prepare to sell a website, it will be worth it when you end up with a sale and price you are happy with. Preparation and attention to detail are key here, as small oversights could cost you money or a sale. Think of it as a house you want to sell. It makes sense to fix any problems, repaint the walls, and leave freshly baked bread cooling on the window ledge before the sale. It will make it more attractive to buyers, help them visualize moving straight in, and incentivize them to pay a higher price too.
About the Author:
I am Michael Bereslavsky, CEO of Domain Magnate, a micro Private Equity Firm where we buy and manage websites on behalf of investors and partner at Dealflow Brokerage. We are excited to have just opened our third fund, open to all accredited investors, where we search out the best deals on the market, grow websites, sell them and distribute profits to investors. We purchase a variety of sites but focus mainly on sites that generate organic traffic through Google. With specialized expertise and a track record in generating consistent high returns in a market of ever-changing digital assets, investing with us is a solid, low-risk choice. If you are looking for investment opportunities, investor advice, or perhaps to sell a site then we are always happy to chat here at Domain Magnate.