I recently received an offer to buy my website, The Personal Finance Help Center. Now, in spite of the fact that it’s been months since I had time to update the site, I turned down the offer because I’m not ready to sell out my website. However, this did raise an interesting question for me. Just when should you consider selling out on your website? Here’s what you need to know:
Is the Site Profitable?
While new sites and older sites which aren’t making money can be sold, it tends to be much harder to do so. As a general rule, it’s infinitely easier to sell a website which is already making money. The general rule of thumb is that the site should sell for around 2-5 times annual earnings. This means that the first criterion for whether to sell out is whether or not you’re making money from the website. If you’re not, even if you’re ready to sell, you may find it hard to get what you think it’s worth.
Why Did You Build the Site?
Some people build websites because they have a personal relationship to the subject. For these people, making money is a secondary objective. They do it for love.
That’s a bit of my situation. I started my personal finance site when a client of mine ended a long running project I had writing for his personal finance site. I found I missed writing about it and decided to strike out on my own. On the other hand, I’d also always intended my site to be a money maker for me (which it is – though it doesn’t make much).
However, the point here is that your emotional attachment to your website can and should influence your decision to sell. Obviously, everyone will have their price. If you have a site you’ve been tinkering with on the weekends as a hobby which you get offered $5 million for, the odds are good, you’ll sell in a heartbeat, even though it’s something you love.
On the other hand, if they’re offering you twice annual earnings and annual earnings are say $2,000 a year, then maybe it’s not worth selling out your dreams just yet.
Do You Have Time to Maintain Your Site?
Another question to ask when considering whether to sell out your website is whether you honestly have the time to maintain it. Whatever your website is, the odds are good that it takes time, money and effort to maintain it, even if all you’re doing is making sure to delete spam comments from the blog. So, if you get a reasonable offer, ask yourself honestly, do you have time to maintain the site? If not, maybe it’s time to let someone else take over.
There is no one right answer to the question of when to sell out your website. It’s a highly personal decision. However, if you’re looking for the numbers, then as I said above, the rule of thumb is that you should get anywhere from 2-5 times annual earnings for selling out your website.