How to Find the Right Niche Website for Sale

Executed well, buying a niche website is a great way to gain a reliable income stream and create greater freedom and flexibility for yourself. However, not all sites are created equal. By learning what to look for when searching for the right niche website for sale, you can increase your chances of achieving a successful acquisition that leads to growth and profitability for years to come.

In this article, we discuss:

• Where to find promising niche websites for sale
• Factors that determine the sale price of a niche website
• Five steps to maximize your chances of a successful niche website acquisition
• How to grow your niche website after purchasing
  

Related Articles: The Complete Guide to Buying Content Websites

Where to Find Promising Niche Websites for Sale

If you are just starting the acquisition process, you may be wondering how to find a good niche website for sale in the first place. Fortunately, there are several ways you can go about finding the right website for your needs. These include:

• Business listing marketplaces
• Your professional networks
• Business advisory firms

Business listing marketplaces

There are a number of business listing websites you can use to find niche sites for sale. One of the advantages of these sites is that you can find and compare many different websites. This can help you find a website that meets your individual needs. For example, if you are looking specifically for an automotive repair website with affiliate product income, you may be more likely to find it through a business listing marketplace compared to other avenues. 

When using business listing marketplaces, you must thoroughly vet any potential purchase to ensure it performs as advertised. Not all listed websites will be worthwhile investments. Likewise, not all websites will accurately advertise themselves. Do your own homework and be discerning in your approach. 

“When using business listing marketplaces, you must thoroughly vet any potential purchase to ensure it performs as advertised.”

Your professional networks

Your professional and personal networks may also be a good way to find niche sites for sale. While this route may not reliably provide as many website options to choose from, you do have the advantage of having a personal relationship or connection with the seller ahead of time. 

If you do find a site through your network, you may be able to get a good deal if the buyer agrees to sell it to you prior to listing it on public marketplaces. As such, it’s always a good idea to check with your networks if you’re in the market for buying a website. 

Business broker firms

Business broker firms such as Quiet Light Brokerage often have a large number of websites listed for sale. These websites are usually checked and vetted, helping to ensure their quality. Click here to check out our current website and business listings. 

By regularly checking business listing marketplaces, utilizing your networks, and checking business advisory firm listing pages, you can find a niche website that meets your needs and budget. 

Factors That Determine a Website’s Sale Price

One of the main criteria to use while searching for a niche site is the overall sale price. Obviously, you must find something that meets your budget. It is equally as important to understand how value is calculated, however, and what factors play the biggest role in determining the sale price of a website. 

The SDE multiple method of calculating website value

There are a number of different ways to calculate the value of a website business, but the most commonly used method is the SDE multiple method. The SDE multiple method states that the value of a website is equal to the SDE, or seller’s discretionary earnings, multiplied by a number (the multiple). 

In other words, website value = SDE x the multiple.

In order to understand what drives the value of a website, it is important to understand both the SDE and the multiple. 

SDE

The seller’s discretionary earnings are the money generated by the business that is available to the owner to spend on discretionary items. It is similar to income but distinct in several ways. Often, the SDE is also referred to as the owner’s benefit, meaning the total value that the business generates for the owner. 

To calculate SDE, calculate the business’s profit and then add back certain discretionary expenses. These include:

• Owner’s salary
• Noncash expenses
• Unrelated income or costs
• One-time investments
• Taxes
• Interest expenses

By adding back these discretionary expenses to income, SDE does a better job of capturing the true money-generating capacity of the business. This makes it a more useful figure for comparing two or more businesses to each other. If you used income instead, inflated costs for one business could hide the true owner’s benefit. By using SDE, you gain a much clearer picture of what you can expect as an owner. 

Factors that influence the multiple

As you can imagine, two websites with similar SDE figures can have different valuations. This difference is captured by the multiple. On its surface, the multiple is simply a number that is multiplied by the SDE to arrive at the overall business value. In reality, it encapsulates both tangible and intangible aspects of value that drive the overall sale price of the company.

The many aspects of value can be grouped together into several categories. Together, these are known as the Four Pillars of Value. They include:

• Growth
• Risk
• Documentation
• Transferability

When buying a niche site, it is important to pay attention to how a prospective site stacks up on all of these four factors. By doing so, you can get a clearer idea of what you can expect after taking over ownership.

Growth

Past and current growth trends are strong predictors of potential future growth. As such, it is prudent to choose a website business that displays strong historic growth. In addition, be sure to look for businesses that have areas of untapped growth potential. 

“Past and current growth trends are strong predictors of potential future growth.”

Risk

If growth is a plus, risk serves to drag down the value of a business, all other things being equal. While all business ventures incur some level of risk, the more risk associated with a website, the less likely it will be to succeed in the long run. Risk comes in many forms. Any part of the site’s success that relies on a single point of failure incurs more risk, for example. In addition, if a website fails to claim its rights reserved on a key piece of intellectual property, its brand may be vulnerable to competition. 

Documentation

Look for website businesses that maintain clear and orderly documentation. This includes:

• Financial records
• Standard operating procedures
• Third-party relationship and communication documentation
• Supply chain documentation

It will be much easier to verify the performance of a business that maintains clear and orderly documentation. In addition, clear standard operating procedures make it much easier to successfully run the business after you have taken over ownership.

Transferability

Transferability refers to how easily the business can be transferred to a new owner without negatively impacting performance. If the website is tied to the owner’s image or personality, it will be much harder for you to take over ownership. 

As mentioned above, clear documentation and standard operating procedures make it much easier to run the business after purchase. In addition, any website that has teams in place to manage different aspects of the business is much more transferable than one that does not. 

Five Steps to Maximize Your Chances of a Successful Website Acquisition

“By setting clear goals you are better able to create a cohesive acquisition strategy.”

Knowing what to look for when purchasing a website makes it much easier to make a wise purchasing decision. Follow these five steps to increase your chances of finding a profitable niche website. 

1. Establish your goals

First, get clear on your goals. What do you hope to achieve by purchasing a niche website? Are you planning to grow the website and resell it later for a higher value? Do you plan to use it as a side income, or are you hoping to replace your current income stream? How much time are you willing to spend managing the site? 

By setting clear goals you are better able to create a cohesive acquisition strategy. Concrete goals help you understand the specific qualities of a site that will help get you to where you want to be. 

2. Identify a profitable niche that you understand

If you are looking to earn an income from your website, be sure to pick a profitable niche. Not all niches have the same earning potential. By choosing a niche market with a clear path to profitability, you increase your chances of creating a successful acquisition.

At the same time, it often pays to make your chosen niche one you understand. For starters, this will help you maintain the motivation needed to manage the site in the long term. At the same time, it will help you understand your potential customers better, allowing you to create more-engaging content and a site that better meets their needs. 

3. Review past and current traffic trends

When looking at potential sites to buy, be sure to review past and current traffic trends. Google Analytics is a great place to start. Has traffic been growing, staying steady, or in decline? As mentioned before, look for a site that shows consistent historic growth. If a site is showing a recent decline, be wary of moving forward. 

4. Look at site history and revenue sources

Review the site’s history to see if there are any potential hidden problems. For example, check to see if the site has ever been penalized by Google for any reason. Also, be sure to check how old the domain is, if there were previous sites on the domain, and if so, the type of sites that have been on the domain.

At the same time, review the site’s current and past revenue sources. Note what is working as well as areas for potential future growth.

5. Look over the site’s documentation and risk profile

Check the documentation practices of any website that you are considering buying. Do they keep orderly financial records? Do they have clear standard operating procedures? As mentioned above, look for businesses that maintain clear documentation.

Be sure to evaluate the risk profile of each site as well. Some sites may incur more risk than others. Get clear on how much risk you are willing to accept and look for sites that match your criteria. 

How to Grow Your Niche Website After Purchase

Growing your niche website after purchase is key to realizing a healthy return on your investment. Below, we discuss several ways you can drive growth.

Invest in content creation

Creating great content is crucial to keeping your target audience engaged and acquiring new readers. Conduct keyword research regularly and create content accordingly. Whether you create the content or blog posts yourself or hire a team to do it, quality content will continue to pay dividends long into the future. 

“Growing your niche website after purchase is key to realizing a healthy return on your investment.”

Launch new revenue streams

Launching new revenue streams to your existing audience is a great way to drive income growth. Depending on the existing monetization strategy, you may want to consider adding:

• Affiliate marketing (including Amazon) or affiliate links
• Display advertising
• Digital products
• Physical products
• An online store

Take stock of the revenue streams available to you. From there, decide what makes the most sense, create a plan, and implement it faithfully.

With the right preparation, it is possible to find the right niche website for sale, complete the acquisition, and create a passive and self-sustaining income stream.