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How to Sell an Internet Company
How to Sell an Internet Company
Bob didn’t know much about the internet when he first got started. He was simply curious about the idea of setting up his own blog where he could talk about the things that mattered to him, which happened to be car engines. As he got more involved with the blog, he began offering advice on the cars that he’d repaired.
His website began getting a few visitors at a time. Bob was pleased, but nothing more than that. The reason he was keeping it updated regularly was that he simply enjoyed it.
Then he learned that he could actually make a little money by allowing other sites to buy space on his webpage to advertise on. He signed up. At first, he was making pennies per month.
But it wasn’t long before Bob’s “little website” caught fire. By word of mouth and because of Bob’s professional and knowledgeable advice, his website began to see hits in the thousands per month. The ads that were on the sidelines began to get dozens of visits per month. Within six months, Bob had something on his hands.
He went from making pennies to making hundreds, and then thousands. He opened another website, this one on specialized body paint for cars, and linked it to his original site. Then he expanded it to include an interactive site where customers could send in questions that he would answer. He offered this as a monthly membership with a small fee, and was shocked when over six hundred members joined within the first three months.
After a year and a half, Bob had a viable company on his hands. He was making better than seven thousand dollars a month regularly and the growth potential was explosive.
Then he got an offer.
Selling Your Internet Business
Not everyone is in Bob’s shoes. Some internet sites are making closer to $500 to $700 per month, and this is after years of perfecting and tweaking the site. Also, not everyone is going to be lucky and have someone walk up to them with an offer wrapped in a lovely red ribbon.
What should you do if you want to sell your internet business or website?
Business experts agree that the first thing you should do is decide what your business is worth. This isn’t what you would like your business to be worth. This is a real numbers game. You should get a competitor analysis, which will let you see what other businesses on the internet similar to yours are worth.
You’ll have to determine whether or not you have a business that takes care of itself a good deal of the time or needs your constant babysitting. If you run a blog that continues to get hits and ad clicks while you’re sipping tea on the veranda, then you have a business that can do its own thing.
If you have to be there to answer questions, provide updates, create shipping and merchandise orders and so forth, then you have a company that takes a great deal of your hours. Treat these hours as if you were paying a manager to run the company for you. This is the way an investor is going to look at it. They would rather make as much money as possible without tying themselves down to the company.
There are sources that can help you determine on which shelf your internet business sits. Sites such as The McKelvey Group can give you an independent analysis of what your company is worth. Of course this is going to cost you money, but it’s going to be worth your time to get a professional opinion before you put your company on the auction block.
Advertise Your Internet Business
There are websites on which you can advertise your business for sale. Bizbuysell.com is one of them. Once again, this is going to cost you a monthly fee, but it may be a way to get your website out there for a prospective buyer.
Investors are open to the idea of buying internet businesses. Those that are experienced with juggling several websites at once have learned that they can make a substantial amount of money. The more established a website is, the better the income will be. It’s worth their time to invest in a website that has been around for awhile, that has built up a clientele and a steady stream of visitors. All they have to do is pay a certain amount and then begin picking up the monthly income.
How Much Will Your Internet Business Be Worth?
It all depends on how much income your site is generating, how many visits you’ve been able to accumulate per month and how many advertisers you currently carry. A site that has more “roots” will be of greater interest to an investor, and thereby will be worth more money.
A site that is only moderately successful but that has been around for a few years might get a buy-out of up to $40,000. A website that has considerably more traffic and has been pulling down a steady income for at least a year could sell for three times this amount or more.
Bob eventually sold his Internet business for just over $280,000. Something that started out as a hobby for him turned into a lucrative and unexpected source of income. He was able to realize dreams that he thought were meant for other people, people who had the money to indulge in them. He was able to take his wife and daughter on a month’s vacation to Ireland to visit the home place of his ancestors. He saw and did things he’ll never forget. He returned home with his horizons opened. He invested the rest of his money and set to work on a new project, eager to see what the future held.
If you nurture your own blog or website so carefully, you may also see wonderful results. They may not be as staggering as Bob’s, but they do have the potential to be.
This entry was posted on Friday, March 26th, 2010 at 10:16 am and is filed under Business, Internet. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.