Never Miss a Beat - Get Updates Direct to Your Inbox
12 Steps to Maximize the Value of Your Blog Before Selling It
By Quiet Light
If you’re planning to exit, it’s important to know what levers you can pull to maximize the value of your blog before selling it. By understanding what drives value and implementing an effective exit strategy, you’ll have a significantly better chance of attracting qualified buyers and achieving your goals.
In this article, we discuss:
- How potential buyers value your blog
- 12 key steps to increase the value of your blog
- What you should consider before selling your blog
Related Article: Best Practices for Preparing an Online Business For Sale
Understanding How Potential Buyers Value Your Blog
First, it is helpful to understand how much value your blog brings to potential buyers. There are many ways to value a blog. By getting an understanding of how value is calculated, as well as the underlying drivers of value, you can work to increase the value of your blog before selling it.
SDE multiple method
The SDE multiple method is the most widely used method of valuing online businesses. SDE stands for the seller’s discretionary earnings. The multiple is just that—a number that multiplies the SDE.
To determine the value of your blog using the SDE multiple method, calculate your company’s SDE and multiply it by the multiple.
In other words, company value = SDE x the multiple.
Simple, right? Not quite. Below, we unpack what SDE actually is and how to calculate it. Then, we discuss the nuanced properties of the multiple.
“To determine the value of your blog using the SDE multiple method, calculate your company’s SDE and multiply it by the multiple.”
The seller’s discretionary earnings are your company’s profits before accounting for certain expenses, including:
- One-time investments
- Unrelated income or expenses
- Noncash expenses
- Owner’s benefit
- Interest expenses
To calculate your company’s SDE, start with your profit and loss statement, and then add back all allowable expenses. The expenses that you add back to calculate SDE are called “add-backs”.
It is extremely important to get your add-backs right when calculating your SDE. If you fail to include some, you will undervalue your business and leave easy money on the table. If you include too many, however, a prudent buyer will bring this to your attention and likely be unwilling to pay your asking price. You may also lose the trust of the buyer if you claim too many add-backs, damaging the working relationship moving forward.
Lastly, SDE is preferred to income or profit when calculating the value of a blog business because it does a better job of capturing the true money-generating potential of the company. Income and profit metrics can hide certain discretionary income or expenses. With SDE, you can more accurately compare financial performance between two or more businesses.
Thinking of Selling Your Business?
Get a free, individually-tailored valuation and business-readiness assessment. Sell when you're ready. Not a minute before.
The multiple serves to capture the tangible and intangible factors that drive the value of a business. As you can imagine, two blogs that have identical SDE figures may have very different values. This difference is captured in the multiple.
To understand multiples, it is helpful to understand the underlying drivers of business value beyond income and revenue. These factors can be grouped into four categories. Together, they are known as the Four Pillars of Value. They include:
Growth refers to the past, present, and prospective future growth trends of your blog. This could be its organic traffic from search engines or its income or revenue growth trends. The more risk a business has, the less valuable it will be, all other things being equal.
“The multiple serves to capture the tangible and intangible factors that drive the value of a business.”
Transferability captures the ease or difficulty with which your business can be transferred to a new owner without negatively impacting its performance. Documentation measures how well you have created and maintained appropriate documentation for your business operations.
Below, we dive into 12 steps you can take to optimize your business in order to maximize its value.
12 Key Steps to Increase the Value of Your Blog
Increasing the value of your blog does not happen overnight. By establishing a plan, implementing it consistently, and leaving yourself ample time to realize results, you can work to drive up the value of your blog before selling it.
Below, we discuss 12 things you can do to increase blog value. These include:
- Engaging with your audience
- Collaborating with other bloggers
- Performing keyword research regularly
- Using internal links appropriately
- Posting consistently
- Diversifying your marketing channels
- Using a quality host
- Launching additional revenue streams
- Creating and maintaining clear business documentation
- Creating clear standard operating procedures
- Building teams to manage your blog
- Removing your personality or likeness from your blog
Engage with your audience
Increasing your blog traffic and gaining readers won’t mean much if you consistently lose readers on the back end. One of the best ways to maintain your readership and build loyalty is to consistently engage with your audience.
Engaging with your readers builds trust and rapport and makes your blog a much more interactive and personal experience. By engaging with them, you bring your readers into the process, as opposed to having it be a more passive experience.
There are many ways to engage with your audience. One of the most effective ways to do this is to ask questions and seek input in the comments section. Once you receive comments, be sure to respond authentically and in a timely manner.
Social media also offers a great opportunity to interact with your audience. You can respond to comments, host live video Q&As, and communicate directly through messages. If you haven’t already, consider building up your blog’s social media presence.
“One of the best ways to maintain your readership and build loyalty is to consistently engage with your audience.”
Collaborate with other bloggers
Working with other bloggers is a great way to grow your own blog, increase your search result rankings, and drive revenue. There are several different ways you can collaborate with other blogs.
Guest posting is a great way to get started. Many blog owners love to host posts from other bloggers in the same or similar niche. Approach potential bloggers and ask if they are interested in collaborating. When doing so, it may pay to have a blog-post idea ready to pitch. If they agree, you can write an article for their blog.
This approach serves several purposes. For one, you gain exposure to a brand-new audience, helping to boost your own audience. Second, any inbound link to your blog will help to increase your domain authority and search-engine rankings.
As your blog grows, you can also host blog posts from other bloggers on your site. This will help to provide you with a fresh stream of content, expose your site to new audiences, and improve your search-ranking performance.
Perform keyword research regularly
If you have built a successful blog, you already know the value of keyword research. However, it is important to continue to do further research along the way.
Trends and focuses shift and change over time. By doing continuous keyword research, you can stay up to date about what your audience is interested in. This allows you to create blog content that covers the most topically relevant matters, ultimately driving readership and growing your audience.
Use internal links appropriately
Internal links serve to link your pages together. When done correctly, this builds an organized structure and blueprint for your blog. Search engines recognize this structure and rank your site higher than it would have otherwise.
This can help to increase your traffic and readership and grow your blog. You can also use internal links to direct visitors to ebooks, leads magnets, or other helpful resources. By doing so, you can build your email subscriber list, opening up another powerful way to connect with your audience.
Posting consistently is crucial if you want to attract more readers and grow your blog’s audience. By posting regularly, you drive engagement and build forward momentum. The ideal frequency with which to post depends on your goals for your blog.
If you simply wish to create more brand awareness, one-to-two posts per week could suffice. However, if your goal is to drive organic website traffic and grow your blog’s readership, three-to-five posts per week is preferable.
While posting regularly is crucial, it is also important to maintain the quality of your content. Posting low-quality content on a regular basis won’t get you very far.
Diversify your marketing channels
Diversifying your blog operations helps to mitigate risk in your business. If you rely solely on one marketing method to gain new readers, your business is vulnerable to setbacks if that marketing channel takes a hit. Adding marketing channels can also help to increase traffic and revenue, creating growth.
Obviously, a solid SEO and content marketing strategy is an integral part of any successful blog. There are other opportunities for gaining new readers, however. If you haven’t already, guest blogging on other sites is a great way to access new audience lists, as we discussed previously.
Buy a Profitable Online Business
Outsmart the startup game and check out our listings. You can request a summary on any business without any further obligation.
Paid advertising such as Google, Instagram, or YouTube ads can also be a great way to reach new customers. Campaigns are easy to set up and monitor and allow you to quickly scale the number of potential customers you can reach.
Email marketing is another great marketing method to consider. An email list can dramatically raise the average customer lifetime value of your readers. Each person on your email list is a potential customer. By gaining email addresses through the use of lead magnets and free resources, you can communicate directly with them on a regular basis, notify them of new blog posts, and share offers.
By creating additional marketing channels, you work to mitigate risk, drive growth, and ultimately increase the value of your blog.
Use a quality host
Using a quality web-hosting service is important for several reasons. For starters, a quality hosting service helps your blog load faster and perform better. This, in turn, helps your blog rank higher and attract more traffic.
Additionally, blog downtime can be a major buzzkill. If you are monetizing your blog, every lost visitor due to blog outages or downtime translates into lost revenue. A quality hosting service helps to minimize outages and downtime, allowing you to make the most of your blog traffic.
Launch additional revenue streams
Launching additional revenue streams to your existing audience is a great way to increase your blog’s revenue and drive growth. This, in turn, increases its value.
Physical products and digital products such as online courses, sponsored content, affiliate marketing offers, and ebooks are just a few examples of additional revenue streams that may be available to you. Look for opportunities, create a plan, and implement.
Create and maintain clear business documentation
Maintaining clear business documentation is essential for preserving and increasing the value of your blog. If you haven’t already, create professional financial statements, preferably with the help of an accountant.
Professional documentation will make it much easier for potential buyers to analyze your blog to determine if they want to make an offer. In addition, it makes it much easier for them to run your company after they have taken the reins.
Create standard operating procedures
In addition to developing professional financial records, it is also helpful to create clear standard operating procedures. Standard operating procedures should include instructions on how to run all aspects of your blog, from marketing strategy to product development.
Your standard operating procedures act as an owner’s manual. Quality standard operating procedures make it much easier for a potential buyer to take over management and run your blog successfully.
Build out teams to manage your blog
Building teams to manage your blog also makes it much easier for a new owner to successfully take over. This is particularly true if your blog requires specific knowledge or skills to manage. This may occur if it occupies a niche market.
The easier your blog is to manage for a new owner, the more valuable it will be.
Remove your personality or likeness from the blog
If your blog features your personality or likeness, it will be difficult for a new owner to take over ownership without seeing a decline in business. Before listing your blog for sale, be sure to gradually remove yourself from the customer-facing operations of your blog. This will help improve your business’s transferability, driving up its value.
“Quality standard operating procedures make it much easier for a potential buyer to take over management and run your blog successfully.”
How Increasing the Value of Your Blog Can Help You Achieve a More Successful Exit
You may be wondering, “Why is increasing the value of my blog important?” Increasing the value of your blog serves several purposes. These include:
- Increasing efficiency
- Driving revenue
- Increasing the purchase price
- Winning more favorable deal terms
The steps you take to increase the value of your blog will naturally improve the efficiency of your business. This includes creating standard operating procedures, improving your documentation, and building teams to manage operations. This extra efficiency will free up more time for you to focus on big-picture tasks as a business owner.
“Increased competition amongst buyers gives you leverage in negotiations, allowing you to win more favorable deal terms.”
Increasing the value of your blog almost always involves driving revenue growth. This growth could come from launching additional products. Or, it could come from implementing new marketing strategies such as Facebook or other social media platform ads.
Increase the purchase price
While it may seem obvious, the more valuable your blog is, the larger your payout will be when you do decide to sell it.
Win more favorable deal terms
Lastly, a valuable blog often attracts more buyers. Increased competition amongst buyers gives you leverage in negotiations, allowing you to win more favorable deal terms.
What You Should Consider Before Selling Your Blog
There are several things you should consider before selling a blog. They include:
- Other opportunities
- Personal considerations
- Post-sale taxes
- Hiring an Advisor vs selling on your own
When deciding on the right time to sell your blog, you likely want to consider the outside opportunities that will be available to you once it is sold. If there is a project or business idea you are interested in pursuing, you may have a need to sell your blog sooner than later. On the other hand, if you don’t have your next project or business lined up, you may not have as much of a pressing need to sell in the near term.
It is also important to take personal considerations into account when determining if and when to sell your blog. If you need to free up cash to make a down payment on a house, for example, that may be a compelling reason to sell.
When you do decide to move forward with selling your blog, it is crucial to consider how post-sale taxes will impact your overall financial takeaway from the transaction. You may need to pay income taxes, capital gains taxes, or both. Be sure to speak with a tax professional to determine what your expected burden will be.
Hiring a business Advisor vs selling on your own
It is also important to decide whether you plan to sell your blog on your own or enlist the help of a business Advisor to assist you with the selling process. A business Advisor can help you sell your profitable blog for maximum value. They can also work to remove a lot of the stress and headache involved and help you achieve better deal terms when all is said and done.
Thinking of Selling Your Business?
Get a free, individually-tailored valuation and business-readiness assessment. Sell when you're ready. Not a minute before.