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10 Steps to Sell Your Content Website
By Ian Drogin
In the world of online business acquisitions, content websites are in high demand. With strong growth opportunities and automation potential, investors are willing to pay top dollar for sites that meet their criteria. Therefore, if you want to sell your content site, there’s a good chance that you’ll find the right buyer… if you go about the process with an effective strategy.
In this article, we’ll discuss the steps you should take to successfully sell your content website.
How to Sell Your Content-Based Website
Like all businesses, there are several stages involved in selling a content website.
For smart owners, the selling process starts long before you list your business for sale. When you plan ahead, you’re able to maximize your business’s value and ensure a quicker, smoother business sale.
“For smart owners, the selling process starts long before you list your business for sale.”
The ten steps involved in selling a content website include:
- Preparing to sell
- Valuing your business
- Creating your marketing package
- Listing your business
- Communicating with potential buyers
- Receiving a Letter of Intent
- Signing an Asset Purchase Agreement
- Completing due diligence
- Transition and Training
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Preparing to Sell Your Content Website
More than likely, you’ve spent significant time and money building your content website. Therefore, doesn’t it make sense to ensure you’re well-positioned when it’s time to sell?
In order to maximize the value of your business, it’s important to plan ahead. By taking a few key steps before you’re ready to sell, you’ll have a much better chance of achieving your exit goals.
To prepare your business for sale, you should:
- Identify growth opportunities
- Reduce or eliminate risks
- Ensure that you have detailed financial statements
- Implement sound documentation practices
- Automate core business processes
- Make sure that your business is relatively easy to manage
We’ll explain each of these points in greater detail in the following section when we discuss the valuation process.
Valuing Your Content Website
Valuing your content website is an essential part of the selling process. In general, it’s wise to receive a business valuation six-to-twelve months before you’re actually ready to sell. In some cases, it’s smart to plan even further ahead.
By getting a valuation well in advance, it allows you to understand the steps you should take to increase your business’s value.
Sometimes, a valuation will reveal low-hanging opportunities that could quickly increase its worth. In other situations, you may learn that your documentation process is likely to cause challenges during the ownership transfer process. Essentially, the valuation process provides business-specific insights and gives you a roadmap to selling success.
“By getting a valuation well in advance, it allows you to understand the steps you should take to increase your business’s value.”
Creating Your Marketing Package
In order for potential buyers to make informed decisions, they need to understand your business. To do so, they must have relevant information about all the key details regarding your content website. A qualified advisor can help you create a well-presented marketing package.
Before listing your business for sale, you must first create a thorough marketing package. Your marketing package should contain all crucial information about your content site.
Your marketing package should include:
- Detailed profit and loss statements
- Add back schedule
- Products and services that you offer
- Monetization strategy
- Description of owner’s responsibilities
- Strengths and weaknesses of your business
In general, your marketing package should provide buyers with a clear understanding of your business. You should present your business well while also being completely transparent. Don’t omit important details that reveal weaknesses. If your business has shortcomings, it’s critical that you’re up-front about that.
Your marketing package contains detailed information, so it’s important to have buyers sign a confidentiality agreement before accessing it.
Listing Your Business for Sale
Once your marketing package is complete, it’s time to list your business for sale.
If you’re working with a qualified Advisor, you should be able to access their large network of qualified buyers. This allows you to get in front of people who are serious about acquiring business. Although listing your business for sale is a monumental step, it’s one of the few that doesn’t require significant effort on your part. Most of the work will be spent before and after this step is complete.
Communicating with Potential Buyers
As mentioned, your marketing package should provide buyers with a vivid understanding of your content website. However, buyers will still have plenty of questions if they’re interested.
After your business is listed, buyers will start reaching out to communicate with you. Your Advisor can serve as the ‘gatekeeper,’ ensuring that only qualified buyers reach your inbox.
During this step, your Advisor will help arrange phone calls between yourself and potential buyers. Phone calls are an important way for investors to dig deeper into the processes of your business. It’s also an opportunity for you to evaluate different buyers. After all, you want to be sure you’re selling your prized content site to the right person.
When communicating with buyers, it’s important to provide open and honest answers to all questions. Also, don’t hide your personality. Instead, seek to create genuine connections with potential buyers. People, including investors, like to do business with those they like and trust.
Letter of Intent
If things go well during this stage, you’ll receive an offer. For business acquisitions, offers come in the form of a Letter of Intent (LOI).
An LOI lays out all of the key details regarding the offer. Typically, it specifies the purchase price, deal terms, list of assets to be transferred, closing date, and any other important elements of the deal.
In some cases, an LOI may fully satisfy the seller’s goals. In other situations, the seller may seek to negotiate in order to secure more favorable deal terms. If that’s the case, there may be some back-and-forth negotiations in order to reach a deal that appeals to both parties.
Asset Purchase Agreement
Once the buyer and seller agree on the deal terms, they sign the Asset Purchase Agreement (APA). The APA is the master of all documents and includes every detail you can think of regarding the deal. Generally, the APA is based largely on the LOI.
Because the APA is so important, it’s a good idea to have it reviewed both by your Advisor as well as an attorney. You want to make sure that the document accurately details the deal and can effectively protect your interests.
After signing the APA, you enter the due diligence stage.
During due diligence, the buyer will seek to verify all of the information that you’ve shared regarding your business. In other words, they’ll want to make sure that all information is correct.
Typically, you’ll need to provide third-party reports to verify all financial and business information. To ensure this process runs smoothly, it’s a good idea to prepare these reports before the due diligence process begins. A lot of owners choose to create one large folder containing all key due diligence information.
For content websites, common due diligence items include:
- Bank statements
- Sponsored content revenue reports
- Website traffic data
- Social media analytics
- Ad revenue reports
- Ad network reports
- WordPress website analytics
- Employee contracts
Each business is different, so the list of due diligence items can vary from case to case. In general, buyers will want to know everything from ad space performance, to marketing tool integration, to affiliate marketing details. If there’s an online store component to your business, you’ll likely need to export reports from your eCommerce platform or other website builder platform. As the business owner, you’ll be required to dig up old records and organize your business’s information.
Closing the Deal
Once the buyer is satisfied with diligence, it’s time for the moment you’ve long been waiting for — closing the deal.
There are two primary steps in closing the deal: transferring the business assets and transferring the purchase funds.
To execute this process, the buyer transfers the purchase funds into an escrow account. Generally, escrow is held by a third-party attorney. Once the funds are in the escrow account, the business assets are transferred to the buyer.
For content website businesses, the assets can often be transferred by sharing passwords and changing account user information. Additionally, employee or contractor agreements must also be transferred to the new owner.
Transition and Training
Closing the deal is a huge step, but your role isn’t necessarily complete once the funds hit your bank account. Usually, there is a period of training and transition.
To help the new owner get familiar with the business, you often need to train them or their staff. Depending on their level of experience and expertise, your involvement can range quite a bit. In certain situations, you might only be required to make introductions, explain your systems, and answer questions from time to time. In other cases, you might need to provide in-depth training and support. Of course, the training period should be clearly established before the deal is closed.
“Closing the deal is a huge step, but your role isn’t necessarily complete once the funds hit your bank account.”
Determining the Worth of Your Content Website
The business valuation process is one of the most important steps in selling your content website. Not only does it determine the purchase price, but it also reviews the strengths and weaknesses of your business.
The SDE multiple method is commonly used to calculate the value of content websites. As the term implies, there are two parts to this equation — SDE and the multiple. Once you establish both of these numbers, you multiply them together to determine the value of your business.
Seller’s Discretionary Earnings
Seller’s Discretionary Earnings (SDE) are a business’s profits taken before taxes, interest expenses, owner’s benefit, one-time investments, non-cash expenses, and any unrelated income or expenses.
This definition may sound complex, but essentially, SDE is the total amount of money that a single owner makes from their business.
One of the first steps in the valuation process is to calculate SDE. A qualified website broker can help you achieve accurate SDE calculations. Once that step is complete, it’s time to apply the multiple.
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What is a Multiple?
The multiple is a number that you ‘multiply’ SDE by to arrive at the value of your business. For example, if your multiple is 4X and your SDE is $100,000, then your business will be worth $400,000 (4 X $100,000 = $400,000).
There are several factors that influence the multiple, but they can all be categorized into one of four distinct areas. We call these the Four Pillars of Value.
Together, these Four Pillars determine the multiple used in the valuation process.
Growth Increases the Value of Your Content Website
Every buyer wants to acquire a business that will become more valuable in the future. Your growth rate is one of the best predictors of what the future will hold.
All else being equal, buyers will be willing to spend more money acquiring a business that has a high growth rate. SDE growth is the primary metric buyers look at, but there are others that are also important.
For example, if your content website is consistently generating more organic traffic month over month, it will be worth more.
“Every buyer wants to acquire a business that will become more valuable in the future. Your growth rate is one of the best predictors of what the future will hold.”
Smart buyers don’t just look at your current growth rate… they also look at your business’s growth potential. Therefore, it’s essential that you identify opportunities for growth before trying to sell your business. Could the next owner leverage email marketing, display ads or native advertising, start a Facebook page, optimize each landing page, or start streaming videos on YouTube for potential customer acquisition? For some content businesses, video monetization and cross selling products are golden growth opportunities.
If you can present a promising value proposition to potential buyers, you’re likely to encounter greater interest.
Minimize Risks Before Trying to Sell Your Content Site
Just as growth indicates a promising future, risk brings it into question. All else being equal, if your content website is facing significant risks, it will be less valuable.
There are several elements that can create risks for content sites. For example, if 95% of your traffic is generated through a single page, your website will be seen as risky. What would happen if that page suddenly stopped ranking well?
“Before attempting to sell, it’s smart to diversify your revenue and traffic sources in order to minimize risk.”
Additionally, if your WordPress site depends on just one or two revenue sources, that could create issues as well. Let’s say that 90% of your revenue comes from one affiliate link. If that product disappears, so would the majority of your business.
Before attempting to sell, it’s smart to diversify your revenue and traffic sources in order to minimize risk. In other words, having multiple ways to attract your target audience is essential. Your content marketing effort will be well-rewarded when it’s time to sell.
The Importance of Transferability
Some niche businesses can be transferred to a new website owner more easily than others. If your business can easily be handed over to a potential buyer, it will be worth more. If there are barriers in the way, then its value will be less.
Some content websites are largely based on the personality of their owner. For example, if you’re a content creator with a personal travel website in which you document your adventures, it will be more difficult to hand that off to someone else. It may still be possible, but the challenge will likely decrease your business’s value.
On the other hand, if your niche website or eCommerce store doesn’t rely on your own identity, it will be worth more. If it is also easy to manage and generates passive income, that will give it another boost in value.
Good Documentation Makes it Easier to Sell Your Content Website
You might understand every detail of your business, but that knowledge is hard to convey to a new owner unless you have effective documentation practices in place. Therefore, the quality of documentation within your business will play a significant role in determining its value.
The first reason that documentation is important is transparency. If a potential owner can’t clearly understand the state of your business, how can they possibly make an informed buying decision? When selling your content site, you first need to have clear financial statements and business records.
“The quality of documentation within your business will play a significant role in determining its value.”
Additionally, documentation makes it easier to understand all of the key activities that take place in your business. If you can provide clear Standard Operating Procedures detailing the various roles and responsibilities, the next owner will have a clear roadmap for managing your business.
Similarly, it’s a good idea to document a clear content strategy for the next owner to implement. Not surprisingly, most buyers are willing to pay more for a business that is well organized and has effective systems in place.
Pros and Cons of Selling Your Content Site
Selling your content website is a big decision. As such, it only makes sense to carefully weigh the pros and cons of letting it go.
A few common ‘pros’ of selling a content website include:
- Freeing up capital
- Pursuing other ventures
- Having more free time
The Financial Benefits of Selling Your Content Site
One of the obvious reasons to sell your content site is financial. Depending on the relative value of your business, selling it may provide you with a substantial payday.
For some owners, selling their business allows them to invest in other money-producing investments. For others, it enables them to purchase a family home or other important asset.
Because your business likely represents a significant portion of your net worth, it’s important to consider how you want that value to be allocated.
Pursuing Other Ventures
There is always an opportunity cost in any business decision. If you’re currently spending much of your time managing your content website, it means that there are other opportunities you’re not able to pursue.
For many entrepreneurs, there comes a point at which other ventures become appealing. Perhaps, you want to apply your knowledge to build a new eCommerce website, Facebook and social media agency, or content marketing consulting firm. Or, you want to focus on a new business model such as an online course, digital products, or other online marketplace opportunity. Whatever it is that you’re seeking to pursue, selling your business may provide you with the resources to fulfill your interests.
Having More Free Time
For many entrepreneurs, it’s not all about work and business success. Even though business ownership can be deeply rewarding, it can also cause headaches. If you’ve ever dealt with unfavorable algorithm changes or eCommerce listing fee mistakes, you know what it’s like.
In certain cases, selling your content website can provide you with the time and freedom to pursue your personal goals. Maybe, you want to spend more time with your family. Or, perhaps you want to buy a sailboat and explore the world. Selling can often help you achieve such dreams.
“In certain cases, selling your content website can provide you with the time and freedom to pursue your personal goals.”
Cons of Selling Your Content Site
While there are some very attractive ‘pros’ to selling your content site, there may also be ‘cons’. Common cons include:
- Losing business revenue
When you sell your content site, you obviously lose the monthly revenue that it generates. Therefore, it’s typically a good idea to plan ahead in order to replace your lost income.
Additionally, selling a business can bring up uncertainty for many entrepreneurs. If you’re accustomed to spending your days working on your business, it can be confusing to let go of your content website. However, this feeling can also give way to the excitement of all the opportunities out there.
Where to Sell Your Content Website
When it comes to selling your content website, there are a few different options available to you.
If your business is relatively small (>$100,000 in value), it could potentially make sense for you to list your business yourself. There are several platforms that allow sellers to list their businesses themselves. Some sites have even turned the escrow process into a sort of digital product that you can access for a fee.
If your business is more valuable, working with a qualified business Advisor has many key benefits. In addition to receiving an accurate valuation and presenting your business well, you also gain access to a wide pool of qualified buyers.
Working with a reputable Advisor allows you to leverage their network and reputation. When it comes to selling your content website, relationships are far more valuable than any marketing tools out there.
By educating yourself and seeking the support you need, you’ll be well on your way to executing a successful exit from your content website business.
Thinking of Selling Your Business?
Get a free, individually-tailored valuation and business-readiness assessment. Sell when you're ready. Not a minute before.