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The Complete Guide to Selling Your Blog
By Ian Drogin
If you’re like many blog entrepreneurs, there may come a point at which you’re ready to explore the possibility of selling your blog. As the owner of a successful blog or content site, your opportunities are many.
Whether your interests have shifted or you’re seeking to elevate your financial future, exiting your blog business can be a great way to help you accomplish your goals. In this article, we’ll answer all of the key questions regarding the process of selling your blog. By reading carefully, you’ll gain a clear understanding of the possibilities before you.
How to Determine the Value of Your Blog
One of the first steps in selling your blog is determining its value. The sooner you understand the valuation process, the easier it will be for you to maximize its value.
Like most online businesses, blogs are typically valued using the SDE multiple method.
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Using the SDE Multiple Method to Value Your Blog
To calculate your blog’s value using the SDE multiple, you first must establish your SDE.
SDE stands for Seller’s Discretionary Earnings. Essentially, SDE is the total annual profits that your business generates, not including discretionary expenses.
A discretionary expense is any business expense that will not transfer to a new owner. For example, if your blog website generates $100,000 annually but you spend $30,000 on hotels, meals, and flights, your SDE would still be $100,000. Why? Because the new owner could easily avoid the $30,000 travel expenses. Such expenses are what we add back because they are added back to the business’s net profit. This article goes into much more detail about the process of calculating SDE.
Once you establish your SDE, it’s time to apply the multiple.
The multiple is a number by which you multiply your SDE to arrive at the value of your business. For example, if your business has $200,000 in SDE and is valued with a 3X multiple, its total value is $600,000 ($200,000 X 3 = $600,000). Based on this, it’s not difficult to surmise that your multiple is an essential part of the equation.
“Once you establish your SDE, it’s time to apply the multiple.”
This begs an important question: What determines the multiple?
In broad terms, your multiple is based on the desirability of your business relative to its SDE. The more desirable your business is to potential buyers, the higher your multiple will be.
For online businesses including blogs, there are four main areas that determine website value. We call these the Four Pillars of Value. The four pillars include:
Below, we’ll explain how blogs are evaluated based on each of these four pillars.
The Importance of Growth
Growth refers to the rate at which your blog business is growing. SDE growth is the primary growth metric that buyers look at, but there are many others that are also important.
In general, a highly valuable blog or content site will be experiencing significant growth in several of these additional key areas:
- Search ranking
- Email subscribers
- Recurring billing
SDE is King, but revenue is also important. Often, buyers will compare your SDE trends to your revenue to ensure that you’re maintaining a healthy profit margin as you grow.
The Importance of Pageviews
Of course, every blogger knows that pageviews and the number of blog readers are important. During the early stages, pageviews are the metric that most people pay attention to. Your pageview trends (i.e. increasing vs. decreasing) largely reflect how effectively your blog content is positioned. Buyers like to see a consistent and steady increase in blog pageviews.
Your search rankings are closely correlated with pageviews and blog traffic. However, your search ranking trends do reflect additional information. Are your old articles continuing to perform well? Are you making consistent progress in ranking for the long tail keywords you’re targeting? Buyers want to see that your content strategy leads to consistent gains in search engine optimization in order to reach your target audience.
For many bloggers, building email lists is an important part of driving revenue. If that’s the case for your blog or content site, it’s important to show that your email subscriber list is steadily growing.
If your blog or content site offers paid memberships, your business will be worth more if your subscription revenue is consistently growing month over month. This is true whether you have a business blog, health content site, or any other profitable niche blogs.
It’s important to note that buyers don’t just look at your current growth trends. Rather, they also look critically at your blog’s growth potential. Therefore, it’s important to be able to highlight any growth opportunities that exist when communicating with potential buyers.
How Risk Affects Blog Value
Buyers gravitate towards growth and shy away from risk.
It should come as no surprise that buyers are wary of businesses that are full of risk. Therefore, risk and value are negatively correlated when it comes to valuing a blog or content site.
There are a few key variables that smart buyers pay attention to when evaluating the riskiness of a blog.
- Revenue diversification
Revenue diversification is one of the most important elements that determine the level of risk associated with your blog. The more revenue sources you have, the better. A few common blog and content site revenue sources include:
- Ad space
- Sponsored post content
- Paid newsletters
- Display CPC adverts
- Banner ad displays
- Affiliate offers
- Premium content
- An online course and other digital product offers
- Paid communities
- Other ad revenue
If your blog revenue depends on just one source, such as a single affiliate link, it will be seen as riskier. If that source disappears, the next blog owner could wind up in a troubling situation. On the other hand, if you have several sources of revenue, your WordPress blog will be exposed to significantly less risk.
Additionally, smart buyers examine your position in the blog marketplace. If you’re producing high-quality content and holding steady search ranking positions, your business will be seen as more stable. On the other hand, if you’re steadily losing your ranking positions to encroaching competitors, buyers will likely pay less for your business.
Of course, any experienced blogger knows that website age plays a critical role. If you have a WordPress site that has consistently ranked on page one for several high-value keywords for the last ten years, you’re in great shape. If your site is newer, it will be perceived as riskier, and therefore, will be less valuable. It’s certainly possible to sell a newer site, you just won’t get as much for it.
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Transferring Your Blog to a New Owner
Some blogs are more easily transferred than others. Not surprisingly, your blog will be more valuable if it can be easily transferred to a new owner. There are a few situations that can make some blogs more difficult to transfer than others. A few common barriers to transferability include:
- Reliance upon personal identity
- Specialized knowledge requirements
- Competent employees or contractors
If your name is glued to the face of your WordPress website, it may be more difficult to sell. For example, if your blog is extremely personal and written in your voice, that could be difficult for another person to take over. However, there are certainly exceptions.
Sometimes, a seller may agree to continue performing core functions of the business for a period of time. This is typically outlined in an employee contract or contractor agreement. However, some sellers will be less than enthusiastic about acquiring a business that is solely based on your own personal identity.
Similarly, if your blog or content site relies on the fact that you hold a special knowledge or license, that could also cause an issue. For example, if you’re a lawyer providing legal advice or service via your blog, others may find it difficult to replace your qualified, expert advice.
Additionally, a lot of buyers are looking for businesses that don’t require them to work full time or longer. If you have competent employees or contractors handling most of the operations on the blogging platform and selling products, that will be a big plus. We’ll cover this in greater detail in the following section.
Effective Documentation Makes It Easier to Sell Your Blog
No one likes to deal with someone else’s mess. If your business is disorganized, it’s going to be more difficult to find a buyer who will pay top dollar.
Luckily, documentation is something that is very much within your control. Before going to market, it’s important to make sure that your documentation is top-notch. Two key areas that you should pay attention to include:
- Financial statements
- Standard Operating Procedures
It’s important for potential buyers to easily understand the financial details of your business. Therefore, you should take the time to cast your profit and loss statements using accrual accounting. Typically, this will require hiring an accountant who is familiar with your business model.
In addition, it’s important to have clear Standard Operating Procedures (SOPs) in place. They should detail all of the core responsibilities required to run your blog or content site. Ideally, your SOPs will provide the next owner with all the information they need to run the business. If you can deliver that, your blog will be much more valuable.
What Buyers Are Looking for in a Blog
If you’re interested in selling your blog, it’s important to know what buyers are looking for. Mastering the Four Pillars of Value mentioned above is a great place to start. If your blog has strong growth, low risk, high transferability, and sound documentation, buyers will pay attention. In fact, if someone is a technology buyer, they may identify your business before you even go to market.
In addition to the Four Pillars, buyers will also consider how your business fits their interests and goals.
Establishing the right buyer persona can help you attract the right investor for your business.
Often, buyers seek to acquire a blog that alights with their personal interests. For example, if a potential buyer is a real estate agent or is interested in real estate, they may prefer to buy a real estate blog. If they’re interested in social media or content marketing, they may seek a blog that focuses on those topics. This may be less relevant if the buyer is primarily interested in flipping blogs or is strictly looking for a passive income stream.
How Much Work Does Your Blog Require?
Another key consideration is the workload required to run your blog business. If you’re the sole writer and are working eighty hours a week, that could be a problem. There aren’t too many buyers who will want to commit themselves to such an arduous buyer’s journey.
“Another key consideration is the workload required to run your blog business.”
Most buyers prefer to acquire businesses that are relatively automated. If you have competent staff handling most of the operations and monetization strategies, it will be a lot easier to attract buyers. With clear SOPs and built-in growth potential, it’s not difficult for unfamiliar buyers to capitalize on easy SEO opportunities.
9 Steps to Selling Your Blog
If your blog is worth upward of around $100,000, there are a series of steps you should take to ensure that you receive its true value. Below, we’ve discussed each of these steps in detail.
- Establish clean financials and documentation
- Prepare a marketing package
- List your business for sale
- Buyer/seller phone calls
- Receive an offer
- Sign an Asset Purchase Agreement
- Complete the due diligence process
- Transfer your business assets
- Fulfill any training responsibilities that you agreed to
If you’re new to selling an online business, it may seem overwhelming at first. Fortunately, if you work with a qualified business advisor they can walk you through the entire process, answering your answers as you proceed.
Prepare Your Financials Before Selling Your Blog
One of the first steps in selling your blog is to establish clean financials. If you don’t already have effective accounting practices in place, this step can take some work.
In general, it’s best to present your financials on a monthly accrual basis. Most buyers want to see at least 24 months of financial statements, so make sure to dig up your old records to complete this process. That applies to working with buyers with a long-term strategy as well as those interested in blog flipping and website flipping.
“It’s best to present your financials on a monthly accrual basis.”
When your financials are displayed on a monthly accrual basis, it becomes easier to understand your business on a deeper level. Details such as growth trends, seasonality, advertising, and profit margins all become more visible. In many ways, your financials tell the story of your business, which potential buyers need to know before considering an acquisition.
Additionally, it’s important to make sure that your business documentation is complete and organized. Take some time to gather all necessary legal documents, entity formation paperwork, domain certificates, or other important documents. Place them in a secure folder that you can show to a potential buyer.
“When your financials are displayed on a monthly accrual basis, it becomes easier to understand your business on a deeper level.”
In the previous section, we talked about SOPs. Make sure that you leave the next owner clear instructions on how to run your business. This should be completed during the preparation stage before you list your business for sale.
The Marketing Package
After completing your financials and documentation, it’s time to put everything together.
Your marketing package is a collection of financial statements, business metrics, descriptions, and images that positively showcase your business. This is what will be shown to potential buyers after you’ve listed your business for sale.
Your marketing package should be thorough and detailed. Your goal with it is to provide buyers with a lucid understanding of the asset you’ve built. Everything from performance on social platforms, blog post performance metrics, WordPress plugin or Woocommerce plugin lists, and affiliate marketing metrics should be clearly displayed. Because your marketing package contains sensitive information, it’s wise to require that any potential buyer sign a confidentiality agreement before viewing it.
“Your marketing package is a collection of financial statements, business metrics, descriptions, and images that positively showcase your business. This is what will be shown to potential buyers after you’ve listed your business for sale.”
In your marketing package, it’s important to present both the positive and not-so-positive. If your existing blog has some issues, you need to be upfront about that. Not only is it the right thing to do, but you’ll also destroy trust if it’s discovered that you’re hiding something. And during the due diligence phase, it will be discovered.
A qualified business advisor can help put together a winning marketing package that includes all of the core elements that buyers look for.
Listing Your Business for Sale
Once your documentation is solid and your marketing package is complete, you’re ready to list your business for sale.
For most owners, listing a business is an exciting and emotional experience. This is where the whole process feels a lot more real. You’ve spent years building your blog, and now you’ve declared your intention to let it go.
If you work with a business advisor, they should be able to help you reach a wide audience of qualified buyers. Not only does that mean that there will be more eyeballs on your business, but also that the quality of prospects will be higher. Essentially, you’re able to leverage the network and reputation of the advisor to help you land an excellent deal.
Communicating with Potential Buyers
If your blog is presented well and listed at a reasonable price, there’s a good chance that you’ll quickly gain the interest of potential buyers. At first, they’ll request to view your marketing package. If they like what they see, the next step is a phone call between them and yourself.
When engaging with potential buyers, it’s important to carry yourself with the utmost professionalism. When you’re asked questions, make sure to provide thorough, complete answers. If a buyer requests information via email, get back to them promptly. Take advantage of all opportunities to showcase both yourself and your business with integrity and transparency.
It’s important to note that this stage is also an opportunity for you to assess potential buyers. In other words, it’s not only about meeting their standards but a chance for you to get a feel for them. You want to sell to a smart buyer, so make sure to inquire about their skills, accomplishments, and niche expertise.
Blogs are in high demand, so if you’re doing things right, there’s a very good chance that you’ll receive an offer. In fact, you’ll likely receive multiple offers.
In the world of business acquisitions, offers are typically presented in the form of a Letter of Intent (LOI). An LOI includes all of the important details regarding the offer presented by the buyer. Typically, an LOI will specify the following items:
- Purchase price
- Deal terms
- List of transferable assets
- Exclusivity period
- Confidentiality statement
- Closing date
An LOI should provide you with a clear idea of the buyer’s offer. If the offer meets your satisfaction, you can move forward to the next step in the sales process. If not, you can negotiate various aspects of the deal until you reach an agreement. Back-and-forth negotiations are not uncommon during this stage. If you encounter more than one offer, it can help show that there is value when selling your blog.
Signing an Asset Purchase Agreement When Selling Your Blog
The Asset Purchase Agreement (APA) is the most important legal document you’ll sign throughout the selling process. It specifies all of the important details regarding the deal. Typically, the APA resembles the LOI and reflects all of the agreements you’ve established with the buyer.
Everything from the purchase price, to payment terms, to asset allocation are clearly defined in the APA. Often, a qualified advisor can help you negotiate the details of the APA. An attorney should also be used to ensure that the contract is legally sound.
“The Asset Purchase Agreement (APA) is the most important legal document you’ll sign throughout the selling process.”
Completing the Due Diligence Process
After signing the APA, it’s time for due diligence. During the due diligence process, the buyer seeks to validate all of the information you’ve provided about the business. This typically involves a long list of requests from the buyer concerning third-party documentation. A few common items requested during due diligence includes:
- Bank statements
- Employee and contractor agreements
- Content marketing performance reports
- Tax documents
“During the due diligence process, the buyer seeks to validate all of the information you’ve provided about the business.”
The list of due diligence items will vary based on what’s relevant for your business.
Transferring Blog Assets to the Buyer
After the buyer has signed off on due diligence, the two parties engage in transferring all business assets established in the APA. Assets that are typically transferred between parties include:
- Website ownership
- Software accounts
- Employee and contractor agreements
- Ad network accounts
- Email subscribers
- Affiliate accounts
- Online store assets
- Twitter, Instagram, Facebook, and other social media accounts
If you have all information consolidated in one place, this process will be much more simple than if you’re unorganized. A qualified advisor can provide more transferability tips to help you ensure that this process goes smoothly.
Training the New Owner After Selling Your Blog or Content Site
The last step in the process is to provide training and support for the new owner. You’ve gone to great lengths to build a successful blog, and now you want to ensure that it continues to grow.
The training period can vary greatly depending on the new owner’s skills, as well as the blog’s requirements. If the owner is highly skilled and you have clear SOPs in place, this process may be simple. In some cases, all you may need to do is suggest topics and ideas or share blogging tips.
In other situations, the buyer may require more extensive training and support. For example, in certain cases, you and the buyer may even establish a longer-term contract for consulting services. As mentioned, each training period should be evaluated and established based on the specifics of the situation.
Selling your blog can be a life-changing decision that opens up a new realm of possibilities and opportunities. It’s also a process that requires thoughtful preparation and execution. By building value and leveraging the right resources, you’ll be well on your way to enjoying a profitable and successful exit.
Thinking of Selling Your Business?
Get a free, individually-tailored valuation and business-readiness assessment. Sell when you're ready. Not a minute before.