8 Things That Add Value to a Website

The first step to understanding how to value your site is to put yourself in the shoes of your potential buyer. Why are they interested in your site to begin with? More than likely it’s for one or more of the following reasons:

• Automation – You’ve created something in your site which lets you “do more with less”. You may have passive income streams or systems you’ve developed that the seller would like to leverage further.
• Scaling – Your site has potential to grow. You may be close to ranking for valuable keywords or you’ve created the business in a way that it won’t fall apart if it doubles or triples in traffic.
• Diversity – You have multiple revenue streams, multiple sources of traffic, multiple suppliers, etc. Your site hasn’t placed all its eggs in one basket.
• Monetization – You have a track record of consistent or growing revenue streams.
• Relationships – You maintain a relationship with your email list, social media followers, rss subscribers, etc. You have solid joint venture partners, suppliers, and other key stakeholders who will remain after the sale.
• Traffic – You generate targeted traffic in a valuable market. You have sources of free traffic or can profitably pay for traffic.
• Buzz – You have a quality backlink profile and your content is being shared around the social web or in the press. You have strong brand awareness.
• Intellectual Property – You have unique, quality content throughout your site. You have create proprietary products.

Think about how each of these areas might affect the value of your site in the prospective buyer’s eyes.

Website Valuation Methods

There are a few typical methods buyers use to value a website. They are:

• Comparable Sales – Buyers may look at recent sales on website marketplaces to find comparable sale data. This is similar to how a company like Zillow values real estate.
• Revenue Multiple – Buyers may base their valuation on historical earnings of a site. These are typically based on a monthly or annual multiple. Higher multiples are achieved when a site has a longer history of steady or growing profits.
• Traffic Value – Buyers may base their valuation on the value of the traffic a site receives. Typically the value is based on how much a business might pay on Google Adwords for the same amount of traffic.
• Reverse Engineering Cost – Buyers will typically analyze time and cost to reverse engineer your website on their own.  This may limit the maximum valuation for sites without proprietary intellectual property or sites in non-competitive markets.
• Customer Value – Buyers who have their own products or services may value your website based on how many customers they expect to convert by integrating their offerings into your website. Sites in highly valuable markets such as insurance may enjoy particularly high valuations due to this factor.

Once you understand the methods your potential buyer might use to value your website, you can work backwards from metrics such as monthly unique visits to determine the approximate value they will place on your site.

How Different Buyers Value Websites

Different buyers will value your website differently. For instance:

• Passive Income Buyers – These buyers want to see consistent earnings over time and place importance on low-maintenance. They will base their valuation on their ability to see a return on their money by maintaining the status quo. These types of buyers typically value sites at 10-24x monthly profit.
• Major Company Buyers – These buyers typically buy a site for the intellectual property or for its ability to generate new clients. A major company knows how much they are willing to pay for each customer they acquire and may value your site based on this. Valuations are all over the place with this type of buyer but they are typically only buying sites for $250,000 or more.
• Improvement Buyers – These buyers typically value sites based on their return on investment after they make improvements to the site. These types of buyers look for sites which are under-monetized, have overlooked traffic sources, or have synergies with their other sites. These types of buyers typically attempt to base their valuations on historical monthly earnings of a site but in some cases will base their valuations from 6-18x the monthly expected earnings after their improvements have been made.

 Conclusion

The biggest key to getting the maximum value for a site is to find buyers who will use a valuation method that results in the maximum price for your site. Once you understand what motivates buyers, you can feel more in control of the negotiation. It also allows you to determine your best option for selling your site. If you’re looking to sell your site to a private buyer, you might want to consider submitting your site on the FlipWebsites.com sell your site page. You may also want to read our article on “What is my website worth?“.

This can be the case more than you might think. I’ve recently been consulting with a large online retailer website that’s had fantastic success running a drop ship operation as a family business.

In the midst of a bad economy, he has 8 years of solid growth, and is projected to break $2 Million in sales this year!

The business is amazing, and I’ve been able to become intimately familiar with all the day to day operations. It’s a great business, in an evergreen market, and it’s growing at a rate of about 50% a year.

But, this website and business isn’t ready to sell, yet. Why? Because if the current owner left town tomorrow, it would crumble.

Is that what your business is like?

One of the most difficult things to overcome in a website you’re ready to sell, is the business’ dependence upon you. And oddly enough, when you actually achieve building a business that grows and thrives whether or not you’re around, you end up not wanting to sell it!

It’s important to build your business, doing everything through the lens of this question: “Does this make my business more sell-able?” Because should the day come that you DO want to sell it, you’ll only be able to do so if YOU are able to leave.

So, here’s a few things you can do to make your business less centered around your own personal efforts to keep it running.

1.) Apply the 80/20 rule. A lot of great books talk about the 80/20 rule, but in a nutshell, it basically means that 80% of your success, is derived from 20% of your effort. Which means the other 80% of the time you spend in your business, is likely the stuff you’re wasting time on, and it doesn’t make you more money. Find out what that one most important thing is, and immediately find alternative ways to get the other stuff done by other people, software, or systems.

2.) Create process maps. Boil it down to a science. “My business includes doing X, Y, and Z.” Color by numbers. As you’re working each day, take detailed notes on what it is you’re doing so that someone else could easily pick it up and follow the instructions, regardless of their level of experience.

3.) Hire people! This isn’t always the answer, but it’s less scary than most people make it out to be. You probably CAN afford to do it. You just don’t think you can because you don’t know the value of your own time. Imagine if you weren’t spending 8 hours a day doing something that could be done by an employee? Are there more profitable tasks you could be focusing on in that time?

4.) Don’t be an expert on everything. It’s a great way to become a bottleneck. The guy I told you about above is a victim of this very thing. He’s SO knowledgeable in his field, that everyone asks him for answers to Google-able questions. Force people to know stuff. Make it a point to let others be experts about things you don’t need to be.

What are some other things you can do to make your website and business less dependent upon you? leave your thoughts in the comments below!

There’s just something about our nature that is attracted to follow the crowd. Not only when it comes to making decisions, but when it comes to measuring the success of others. When it comes to making decisions (especially about a purchase), few selling tactics have as powerful of an effect as a long list of satisfied customer testimonials. But when it comes to measuring success and getting others to jump on your bandwagon, the tool of choice is social response in the form of a vote.

Take a look at some of the web’s top social bookmarking sites like Digg.com, or StumbleUpon.com. When something get’s voted for enough times, it gets picked up and syndicated all across the web. A post that experiences what some have called the “Digg effect” (server crushing traffic from reaching Digg’s first page), goes through a snow ball effect. The more people who Digg, the more people that see the story, which in turn leads to more Diggs…You get the point.

Then came the Facebook “Like”. The same snow ball principle is at play, it’s just a much steeper hill with more force pushing the ball. The viral effect of the Facebook “like” has made many people overnight internet celebrities, given YouTube videos millions of views, and increased online businesses overall fan bases (and value) by untold amounts.

The question everyone is asking, is how will the Google +1 button effect business owners and websites? Well, in an attempt to keep good on my promise to not discuss all the stuff you’ve probably read 1,000 blog posts about already (SERP changes, etc…), I’d like to point out the one change that could make you more money as a flipper: Social proof.

If success is measured by following the crowd, then having a high Google +1 count on your website’s content automatically infuses more perceived value into it. It tells potential buyers “people like my website.” Which gives them more confidence to make you an offer because the crowd is telling them it’s a good property to invest in.

#1 rankings are great…But being #5 with 10X as many +1′s as the guy who’s #1 in the SERPS tells potential buyers (and searchers) that your site is the site everyone likes the most.

So, the moral of the story is if you aren’t currently utilizing Google’s +1 button to add perceived value to your content, perhaps you should. You may even start seeing it in our posts here at FlipWebsites.com!

If you’ve seen it, you’ll remember that Richard Gear plays a billionaire business takeover guy that preys upon struggling businesses, buys them out, and sells them off piece by piece to other companies.

In today’s post, I want to talk about doing the exact same thing when it comes to websites and group auctions. Let’s call this a Piece by Piece Website Flip.

One type of auction I see passed over by so many people in online marketplaces is the “group of 250 adsense sites” type auctions. Usually, there’s 1 or 2 sites in the bunch that make up the majority of the claimed income, and the owner is throwing in his collection to inflate the perceived value.

If you’re like most people, you don’t even give these auctions a serious look. I mean, who wants to pay to renew 250+ domains every year?! Who wants to go through with the hassle of transfering 250 sites to a different hosting account?

Sometimes, if you’re lucky, you can get the owner to sell you just one of the sites in the bunch, but more often than not they aren’t willing to separate the wheat from the chaff for fear of not being able to sell the chaff.

So, what’s a website flipper to do? Become Richard Gear!

When I see these types of auctions, I like to take a look at each site to sniff out ANY potential value in them. Even if the sites have zero traffic or revenue, the domains, content, and designs may be worth something. Even if only $25-$50 each.

Lets use the above example. You go to Flippa.com, and come across a listing that says “Network of 250 Adsense Sites for Sale”. The network of sites collectively earn about $350 per month, and over $300 of that is from less than 5 sites that are the real winners in the group.

The BIN is $3,000.

Also, the seller is absolutely UNWILLING to sell you the 5 money makers by themselves. They want you to take the whole bunch of them, or nothing at all.

After browsing through the 245 duds, you see that most of them have 5-10 quality original articles on them. They each have a decent looking design with a unique header graphic. In fact, the only reason they don’t make any money, is lack of traffic and ad placements.

So, with the domain names, site designs, and original content, you figure each site is worth about $30 to you.

You quickly place the BIN for $3,000, (primarily for the $350/month in adsense income from the main 5 producing sites), and you devise a plan for extracting that $30 per site from the rest of them.

Instead of being blindly optimistic, we’ll assume that  we can only successfully extract that $30 per site from about 40% of them. So 40% of 245 sites = 98.

The plan is twofold:

1.) List the sites at eBay, digital point, and other cheap marketplaces where these types of sites will sell for $30 without much cost to you.

2.) Create a special offer at Warrior Forum or to your own marketing list to create “unique, high quality adsense sites with 5 + articles, graphics, & domains for $30 each”.

Between these two strategies, you successfully sell 98 sites times $30 for a cool profit of $2,940.

Your new income stream has paid for itself, and you still have 147 sites you can use for link building or whatever you want.

Perhaps this will give you a new perspective on monetizing auctions you normally wouldn’t give a second thought to.

Have you ever done a “piece by piece” flip? Have you ever broken down the assets of a larger site and sold them off piece by piece to other people? Better yet, have you ever bought a business and sold off chunks of ownership to 2 or more parties to recoup the initial spend?

Comment below with your thoughts on Richard Gear, piece by piece website flipping. We’d love to hear your thoughts.

What It Really Means to Flip a Website

So many things have been lumped into the topic of “website flipping” that actually don’t belong there. Much of it has polluted the marketplaces, and that is largely due to the amount of guru products on the subject leading people astray.

Website flipping is not:

• Creating sites from scratch to sell…Even if it’s down the road
• Creating turnkey sites to sell with zero traffic or revenue

These activities are more accurately placed under the banner of “site selling”. And there’s nothing wrong with it. Lots of people add tremendous value to the marketplace by creating valuable sites to sell. It’s what they do for a living.

However, it’s not what I consider “website flipping”.

The phrase “website flipping” is borrowed from the concept of flipping houses. Consider the buy and renovate concept of flipping houses. When people invest in a house to flip, it’s usually because they recognize some things (like new paint and carpet) they can add or fix to immediately increase the value of that home for resale.

So, what about people who build houses to sell them? Are they considered “flippers”? I’d call them builders or contractors.

So, what is website flipping and how do you do it?

Flipping involves buying low, and selling high. Not buying and keeping. Not building to sell.

Buying low and selling high…FAST.

Now, you may buy a website and sell it several years down the road. That can be considered flipping, but REAL “flipping” involves turning properties over a little faster in my opinion.

This skill is more of an art than a science. It’s truly a beautiful art! Why?

For the very reason you’re reading this blog, and the reason our marketplace of buying low and selling high has become so popular:

BIG – MONEY – FAST

It’s not for everyone though. I’m seeing a trend amongst the savvy long term investors in our marketplace towards buying to hold.

That’s partly because many people struggle to find anything worth buying in online marketplaces anymore. When they do, they aren’t very keen on letting it go.

Honestly, buying to hold is a very wise model. If you’re looking for information about how to do this the smart way, I’d invite you to check out BuyingAndSellingWebsites.com.

For the sake of this conversation, let’s assume we’re defining flipping as buying with the intention to sell quickly. It’s what we teach in our course Killer Flipping Secrets and is where you have potential to make big money fast.

How to Flip a Website

To flip a website, you need a special set of skills. You’ve got to be able to do at least 1 of 2 things very well. They are:

1.) Spotting areas of underdeveloped monetization opportunities, or traffic generation.

Ask questions like, “Can I add an up-sell to this site’s sales process?”, or “Can I raise the price of this product?”, or “Could I increase the targeted traffic to this site by creating a PPC campaign, or doing some SEO?”

In other words, look for areas that require little work to achieve huge potential results on the bottom line of that business you’re about to buy.

Know what you’re good at or what you’re able to outsource, and try spotting opportunities to apply those skill sets.

2.) Arbitrage.

Buy low, sell high, immediately. That’s what arbitrage is all about.

Here’s the money question when it comes to selling an online business…

“Who stands to make the most money from owning this site?”

Answer that question and you’ll know who is also most likely willing to pay a lot more money to own it than what you can acquire it for.

This can also be done between marketplaces. Sometimes a site you find over at ebay.com can be sold for a lot more at Flippa.com.

Get familiar with the types of sites that sell well on the various marketplaces so when you find one listed lower than you’re used to seeing it listed for on another, you can scoop it up and sell it on the other site for a quick profit.

Fast Profits With Website Flipping

There’s so much stuff out there that people are teaching in forums and in ebooks that isn’t really geared towards the fast profits that can be generated using the above 2 concepts.

The entire appeal of flipping websites is fast profits. Don’t get me wrong, please. There’s nothing bad about buying to hold, or starting sites to sell. Those are good business models when done right, but they are not the same thing as flipping.

When I buy a site to flip, my goal is to get it renovated and sold inside 6 months. The time frame will depend on how much value I believe can be added fairly quickly and what’s involved in that process.

It’s only something I’d do if the potential upside of the flip is a large enough amount of money to justify the amount of time and work I’m going to put into the project.

If it takes longer than 6 months, or the potential margin of increase isn’t large enough to justify selling it again that fast, I wouldn’t take it on as a flip project.

That doesn’t mean I wouldn’t buy it to hold. That’s just a different conversation.

For those who are new to FlipWebsites.com, this should serve as a clear definition and brief introduction to answering the question “how to flip a website.”

For the faithful readers, and seasoned website flippers, perhaps this will serve as a reminder to get back to the basics of pure “flipping”.

Remember what flipping is about…

BIG – MONEY – FAST

Perhaps it’ll get you back on track if you’ve strayed the course or lost focus.

What do you think? Am I being too rigid with my definition of website flipping? Comment below and let me know.

Back when I sold BetterParenting.com, a lot of people were interested in the auction. Let’s be honest, there’s a lot of crap sold on Flippa, so when a PR4 site with a nice design and good content, built on a premium brandable domain comes up for sale, people take notice.

The site wasn’t earning much — enough to cover any content I paid for (which was fairly minimal, since I was getting a bunch of content for free). In fact, the numbers were so mediocre that I listed the site with no revenue claimed.

Despite that fact, the auction was going great — I had lots of bidders and even more people watching the auction. During the last two days, the private messages started pouring in with higher frequency.

One message was from a guy who had been bidding — he was really interested in the site and he wanted to talk to me about it. The auction still had about a day and a half left when we spoke. Bidding on the site was around $4,200 and he offered me $8,000 to end the auction early. I said I’d need at least $10,000 to do the deal and he quickly replied that he’d take it. What I did next was smart.

I told him that I first wanted to contact the existing bidders to let them know that I had an offer on the table to end the auction early. I proceeded to send out the note to the existing bidders, and when I hadn’t heard anything back from them, we closed the deal.

Seems like I did everything right, doesn’t it? Except I screwed up. Within an hour after we closed the deal with a “Buy It Now” price on Flippa, I got a message from a guy who wanted to know what happened to my auction. He was waiting until the last day to place a bid and he was prepared to spend up to $18,000 on the site. I almost threw up all over myself when I read it. No lie.

Worse still — earlier in the week, I had received a message from a guy who hadn’t placed a bid in the auction but told me to contact him before I sold to anyone else. When I sent out the messages to all the bidders, guess who I forgot about? Yep, that guy. A few months later, I found out that he had real deep pockets and probably would have gone above the other guy’s $18k max.

Moral of the story? If you have an auction that’s generating a lot of interest, the “Buy It Now” option could cost you thousands. Also, be VERY diligent in your note keeping. It was my own disorganization that caused me to not email a bidder who was very interested in the site.

Anyway, I hope you can learn from my mistake.

The answer — website selling mistakes.

The information you provide in your listing, and the way you present that information can have an enormous impact on how much potential buyers trust you… and how much they’re willing to pay for your site.

Here’s a list of some of the major mistakes I’ve observed in some recent listings on Flippa that have caused sites to sell for way below their real value, or not sell at all because they stayed below reserve.

1. Using a Crappy Headline

   Lets face it — if your auction can’t get attention, it can’t get bids.  Lots of site sellers make the mistake of thinking that an attention-grabbing headline is a super “salesy” headline — it’s not.  Site buyers want specific information up-front.  Does your site have good revenue, high traffic, a great PageRank?  Highlight that information and include the niche you’re in.

   For more headline-writing tips, check out How to Write Auction Headlines That Command Attention here on Flip Websites.

2. Not Including Traffic and Revenue Stats

   There are lots of scammers selling garbage on Flippa — you need to differentiate yourself as not being one of them.  Providing plenty of information on your traffic and revenue history will create a strong sense of trust from potential buyers.  Transparency sells and the numbers back it up.

   I previously looked at all the Flippa sales stats and saw that sites with 6 verified Analytics attachments sold for 18 times their net monthly profit.  Sites with 0 sold for just over 3 times their net monthly profit.  You can read all the stats in my article Knee-deep in Stats: Past Sales Teach How To Sell Your Website.

3. Not Including Stats in the Listing Copy

   So, you’ve added stats to your listing, which is awesome, but you can’t just count on people downloading your attachments on their own.  There are tons of other sites you’re competing with for attention, so why not highlight these stats in your auction’s body copy — and include other stats that don’t show up as attachments?

   Has your traffic been growing at 50% month over month?  State it.  Do you have a loyal and responsive Twitter following?  Do you have a huge mailing list?  These are all stats that NEED to be in your listing copy.

   If any of these put your site in a favorable light, make sure you include them:

   • PageRank
   • Email list subscribers
   • Twitter follower count
   • Site age
   • Traffic growth trends
   • Revenue growth trends (ie “Revenue has doubled each of the past 3 months”)
   • Total umber of comments on blog posts (if you’re selling a blog and have an active audience)
   • Number of guest post submissions received (again, for blogs)
   • List of authority sites that have linked to you

4. Selling Too Heavily On Potential

   Selling on potential is okay, but if you push too hard, you start to make people nervous.  The key here is to be realistic about the claims you make.  Don’t claim potential for a 7 figure product if you’ve only generated $500 in sales.

   Along these lines, don’t extrapolate too heavily — if you have a site that’s been up for a day, and it’s made $25 from a single sale, that’s not a $9,125 per year site — until you have enough data to validate what a normal day or week is versus an abnormal one, DON’T EXTRAPOLATE.

5. Not Answering the Question, “Why are you selling?”

   If you have a site that’s earning big bucks or that you’re claiming has tons of unrealized potential, you need to give a reason why you’re selling it.  This question is in every potential buyer’s mind — they all think, “If your site is so great, why are you trying to get rid of it?”

   Be aware that how you answer this question could raise new red flags for potential buyers.  If you say you don’t have time to devote to the site, they’ll start to wonder about how much effort is involved in maintaining it.  If you say you lack the expertise to take it to the next level, they might wonder if they do as well.

   Whatever your answer, make sure you consider what secondary concern that might raise, then try to answer that too.

6. Not Providing a Road Map for Future Growth

   When you sell a site, lay out a few ways the new site owner could make the site better — options for adding traffic or revenue.

   I did this when I sold BetterParenting.com — here’s a quick excerpt from that listing where I showed a clear path to better earnings:

   “The brand has enormous potential.  When you talk to people and say you’re from Better Parenting, they instantly assume you’re a legitimate company with a large staff.  This would work to your advantage in dealing with advertisers and securing free items for review and giveaways.  This was the next logical step for me (direct advertiser contact, product reviews), but I haven’t been able to find the time to do so.

   In addition to product reviews, the site would do extremely well with book reviews (and affiliate sales).  BetterParenting.com previously existed as the site of a prolific parenting author, who used the site to sell her books, it’s already succeeded on that platform.”

   You can see how I indicated that direct advertising and free products for reviews would be pretty easy to obtain for someone who was willing to commit a little time.  I also used the site’s history to indicate that it could earn an affiliate income promoting books.  I didn’t go overboard on the potential, and never assigned a dollar figure to it — I just planted the seed for potential buyers and let them take it as far as they wanted to in their own minds.

   If you have a product that’s done well from direct sales but you haven’t started using affiliates, that’s a great thing to highlight.  If your site uses a third party vendor for your advertising (like BuySellAds), you could point out that they take 25% — switching to direct advertising could provide an instant boost in revenue.  You get the picture.

7. Letting a Site or Product Burn Out

   We already noted above that we’re going for transparency by including traffic and revenue stats.  Those stats can’t show a burnt out site or product.  If you find yourself in a position where your site or product has seen a huge drop in revenue or traffic, you’ll be best served to try to fix that first.

   Holding out for two or three more months, while you work on restoring your site’s traffic or revenue, can do wonders for your final sale price.  People won’t pay a premium for a site that they believe is trending downward.

8. Selling a Site Too Soon

   Kind of the opposite of letting a site burn out — you can cost yourself a ton of money by selling before your site “hits its stride.”  If you’ve done SEO work that you expect will move your site from fifth to first for your main term in the next month, you might want to wait to sell until you have earnings data based on that new position.

   That type of a jump could cause a 10-15x increase in traffic (and potentially earnings), depending on your niche.  Don’t sell something until you’re sure what you really have.

9. Not Using Bullet Points

   Your Flippa listing is not the place to write the next great American novel.  Bullet points make your listing easily scannable and save potential buyers time.  You can also include some narrative if you want, but make the important data easily accessible and you’ll find your auction gets much more interest than it would otherwise.

10. Having Conflicting Information in Stats and Listing Copy

    So, you know how we’ve been talking about trust throughout this list?  Few things can damage your trust more than conflicting information.  If your listing claims $1,000 per month in net profit, then your body copy notes that that information is your estimated potential for the site, or what it earned in January two years ago, you’ve put yourself in a very bad spot.

    Now, you’re not one of the good guys.  You’re one of the scammers.  Make sure your information is legitimate and accurate, and make sure you say the same thing throughout your listing — in your body copy, in the listing info, in the attachments you provide.

    Trust is key to the sale, and you don’t want to compromise it.

These are the mistakes that I see being made most commonly in website sales.  If you avoid these, you’ll put yourself in good position to get top dollar for your site.

If you think I’ve missed any (or disagree with any of these), I’d love to hear about it.

Maybe the folks at Flippa were listening because today they announced a new way to sell websites online via their marketplace: confidential listings.

As of today, a website seller can choose to make their new listing confidential. This will result in the URL being hidden from buyers until the seller has approved the buyer’s signed NDA.

The announcement further details the information that will be hidden until a signed NDA is produced from the potential buyer and approved by the seller:

This will hide the URL and other site-revealing information such as the WHOIS, Ranking Keywords, Hosting and Wayback Machine details from everyone apart from the seller and approved buyers.

A New Revenue Stream for Flippa

Flippa is smartly offering this feature as a premium option, which has a charge of $100.  This fee ensures that the feature won’t be overused and means that the confidential listing feed will likely be of increased quality.

It’s a good business move for Flippa in that it adds a new revenue stream, but it also appeals to a class of sellers who previously feared using the marketplace.  I, for one, am pretty excited to see this put into action.

Sadly, enforcement of the NDAs falls entirely upon the seller, and with the ability to use private registration on domain names, there’s still serious potential for abuse in the way of niche mining.

What are your thoughts on this — is it a good move for Flippa?  Is $100 to high of a price for this feature?

If You Found a Gold Mine, You Wouldn’t Publish a Map to It

Frequently, when we sell websites, we’re really selling execution — good unique content, proper implementation of an SEO and link-building campaign, and conversion optimization.  Sites that get traffic and turn it into money.

For most of these sites, the market is well-known.  There’s no intellectual advantage owned by the site — it’s not in a brand new, untapped market.  It’s just been executed better than most of its competitors.

Sometimes, however, you find a keyword that’s basically untargeted organically.  It’s a profitable keyword (has advertiser competition if you’re an AdSense builder, or is a buying term in e-commerce sites), but you’re the only one who really knows it.  How you handle that situation is completely different from “regular” websites.

In those instances, it’s important to play it “close to the vest.”  The last thing you want to do as a seller is publicize your untapped niche, inviting lots of competition for yourself.

How to Make a Sale without Setting Off Alarms

If you have one of these sites and you’re looking to sell it, your best bet is to try to move it privately, if possible.  If you’ve been buying and selling sites regularly, you’ll have a list of potential buyers that you’ve already vetted in the past — this is a great place to start.

Since you’ve already bought or sold with these people before, there should be some degree of trust to begin with.  This will allow you to withhold certain information (namely the niche or keyword), and instead disclose general financial information (and perhaps the general industry and monetization approach of the site).

Where to Find Better Buyers

If you don’t have a list of potential buyers, I strongly recommend checking out the forum at Experienced People.  If you post there and prove yourself to be a valuable contributor, you’ll have access to their private forum.  There are a lot of great people who frequent this board, and they are the types who would be more likely to understand (and appreciate) this approach.  You have to remember that the seller’s discretion in a situation like this is also advantageous to the buyer, who doesn’t want to see the competitive landscape for the site change unfavorably.

After looking at all this data and after helping over 200 website owners sell their online businesses, one simple truth seems to be clear: most website owners have no idea what they need to do to maximize their sales price.

This isn’t entirely their fault, of course. Selling a website is an entirely different exercise than building, growing, and monetizing a site. The two activities, while not mutually exclusive in the decisions you will ultimately make, have different nuances, goals, and strategies. But so many Internet business owners fail to do some simple things that could add significant value to their websites.

The Devil (and Money) is in the Details

There are literally dozens of tips that could be offered on how you can maximize your websites value, but the easiest and highest impact tip that most website owners fail to take advantage of is their documentation and presenting detailed information. Most entrepreneurs are not detail oriented individuals. Keeping up with the book keeping is not high on the list of most website owners, nor is filing those bank statements. The effect, however, when it comes time to sell, is significant. Sellers who are able to present detailed, concise, and well organized information to potential buyers can regularly add between 25% – 50% to their total asking price. In addition, seller’s who have detailed information are much more likely to actually close on the offers they receive.

As a quick aside, the most egregious example of poor record keeping I faced was several years ago when I was talking to the owner of a very large company that was for sale. This company had gross revenues that eclipsed $25mm/year and was growing rapidly. As I do with any prospective client, I asked to see his financial statements so I could perform a valuation (for most clients we help put together financial statements when they aren’t available). I was shocked to learn that not only did this business owner not have financial statements – he was actually keeping track of his finances with Notepad!

His story is not terribly uncommon, though. When we perform our valuations, we regularly ask for rough figures in terms of revenues and cash flow. About 70% of the people we talk to do not know their cash flow (and another 40% do not even know what cash flow is). Many do not know how much traffic they receive, and others are simply unsure how to get this information.

What You Should Keep Track Of

Having the right details in place and being able to present them to a potential buyer is essential if you want to maximize your sales price. Here are a few things you should always keep track of for any business – especially a business you hope to one day sell:

• Finances – if you do not know how to keep books, hire a book keeper. That being said, Quickbooks is cheap and easy to use. It always makes me smile as a website broker when I hear that client keeps their finances in Quickbooks.
• Bank Statements, Merchant Statements, Earnings Statements, Fill in the Blank with Whatever is Appropriate Statements – as a general rule when selling a business, if you can’t prove it, you can’t sell it. Having profit and loss statements and balance sheets are nice, but if you can’t substantiate that with 3rd party data, you are going to have a hard time selling your business. Rest assured, any time you go to market with a six figure business, you will need to have proof (this goes for your expenses as well as your revenues).
• Google Analytics – this was referenced on this blog here (http://www.flipwebsites.com/selling-websites/knee-deep-in-stats-past-sales-teach-you-how-to-sell-your-website/). I know there are some who do not like Google, but the fact is, Google Analytics is the gold standard that most people know. Install it and live with it – you’ll be happy you did later.
• Contracts – most online businesses don’t require any contracts, but for those that do have them, keep them, file them away, and be prepared to show them in a final sale.

Keeping good track of these items, having them readily available, and being willing to show them in a format that is both clear and concise can have an immediate impact on the price you can ask (and receive) for your business. In addition, sellers who have this information organized are much more likely to actually close on any offers they receive.

Keeping track of this information can be a bit laborious, but in the end, it is well worth the effort.