Selling a Blog
There is a great article written by Thomas over at YourDailyFinance.com about Selling a Blog for Millions: interview with Jim Wang of Bargaineering that I suggest you check out. It’s a great read and really gives some great insight into selling a blog or business and things to consider!
After reading this article, it really made me wonder – when is the right time to cash out of a blog, or for that matter an entire business?
Selling a Blog – Jim Wang’s Story
The long and short of it is that Jim Wang started the site Bargaineering.com and worked his butt off to build it into a large site that eventually sold for $3.5 million dollars!!
Jim currently still works for the company that bought out his blog, but he does not have direct control over it.
So, When is the Right Time to Sell a Blog or Business?
People usually start a business because they have a great idea or skill that they’d like to bring to market. Hopefully, the business idea or skill has real meaning for them.
To me, the time to sell a blog or a business is when the amount offered from a prospective buyer is greater than the meaning that the current business has to its owner. Maybe the owners heart is no longer in the business. Maybe the owners desires have changed over time and they could take the money to do something even greater that holds more meaning for them?
Selling a Business – Bittersweet
One of the questions that Thomas posed to Jim was how did you feel after the deal completed? At the time I read this, I thought “what kind of question is that?” Of course he felt on top of the world – $3 million bucks!
But, Jim’s answer was very unexpected. He said he felt sad in a way. The more I thought about Jim’s answer, the more I realized that I would probably feel the same way.
If you put your heart and soul into something for years at a time, I would guess its almost like losing a small piece of yourself when you let go of it.
Selling a Business – After The Dust Settles
After a business is sold and the dust settles, many entrepreneurs will continue on to start a new business or venture. With the new influx of cash, this allows them the potential to shift industries or start much larger scale operations.
In Jim’s case, he is back and at it again with his new site: Microblogger.com . This site focuses on teaching bloggers how to make money based on Jim’s own personal experience. A bit of a shift in focus for Jim, but mostly he is continuing in the same industry (blogging).
Selling a Business – What About You?
If you own your own business, does it still hold the same meaning as when you first started it? Does it make sense to jump at that first or second offer to buy you out, or should you hold out with the belief that your business will blossom and grow as you continue to build it?
In the famous example of Microsoft’s bid to buy Facebook for $15 Billion, I have to admit I thought Mark Zuckerberg was crazy to reject the offer! Fast forward to today and Facebook has IPO’ed and the company’s market cap is currently $93B+. Not too shabby!
So, for those business owners, how long have you been at your business and what price would it take for you to sell your business that you’ve built from the ground up?
I can tell you this: if someone offered me $3.5 million, the time would be right to sell! 🙂
Kurt @ Money Counselor recently posted…What Would You Do? #5
Kurt,
Yes, for most folks $3.5 million for their blog would make the cut 🙂
Some other folks have built entire businesses around creating website in a couple of months and flipping them for a couple thousands. Different strokes for different folks I guess.
FWIW, you have to expect that they’re offering relatively close to fair market value. So the dollar amount is high but it’s supported by annual revenues that made that sale price reasonable. That said, I have no regrets about selling but it wasn’t a cut and dry decision.
Jim Wang recently posted…How Important Are Bounce Rates?
Jim, well put.
I would think it would be a pretty simple analysis of the discounted cash flows into perpetuity based on the current revenues assuming some type of growth %.
Wow I never thought of selling my blog before reading this article. 3.5 Million? Yea, I would sell it! I would take the money and start another business just like John did.
Great post!
Adley recently posted…What Can I Sell On eBay For Profit? Part 2
People do this all the time. Check out the site Fiverr.com – there are hundreds of blogs for sale.
All blogs are business and all businesses should have an exit strategy in place.
Jim Wang recently posted…How Important Are Bounce Rates?
Good topic Derek. Yes many people part with their business for various reasons. Yes you put in your heart and soul in your business and would be like losing a part of your life when parting. Business cannot run on emotions and if you can strike a good deal you can go for it and start new venture which you can grow still further
Rita P recently posted…Become rich now or never
Great thought – emotions have very little place when running a business. It’s all about bigger and better things and helping more people!
It was something I didn’t expect and it kind of caught me off guard.
Jim Wang recently posted…How Important Are Bounce Rates?
Jim,
I think this is a reminder to all of us that we should update our thinking from time-to-time on what a reasonable offer would be.
This way, we are more prepared for discussions if the offer comes in…
Hey Derek, I never thought about selling my blog. If I did, I don’t think I’d get 3.5 million. But, if that was offered, the right time to sell would be right then! Thanks for the great morning read!
Josh @ CNA recently posted…Welcome To The NEW CNA Finance!
I think everyone should be thinking about it. Maybe not selling it right now but building it up into a resource that someone else might want to buy – I don’t think there are any downsides to that approach.
Jim Wang recently posted…How Important Are Bounce Rates?
I fully agree with your thoughts here as well as having an exit strategy. Every business should have one.
I think blogs are a little peculiar because they border between hobby and business for most…
Jim,
I never gave much thought about an exit strategy until now. Having one is very valuable! I just started my blog so I just got my foot in the door. Thinking about the future is always a good thing. I agree, blogs are definitely a business.
I like how you think.
Adley recently posted…Top 5 eBay Sales of the week! August 25, 2013
When you sell your blog, like Jim said, the value is determined by revenue. BUT websites usually go for 24 months worth of revenue, up to 36 or 48 if you are really luck. So let’s take 48 months, it means if the buyer makes the same work the blogger used to he will make his investment money back in 4 years. When does one get a 25% return with real estate or the stock market, almost guaranteed since the website is generating that income? The time to sell would be never, if you can replace yourself with staff writers and a VA and still get 25% a year on your potential sales price, or when you are burnt out if you think your blog can’t keep going on auto pilot. Or, if you have a magic number that would allow you to stop working forever and that is offered to you.
Pauline recently posted…Would you buy a 5 bedrooms, $100 house?
I guess that’s what J D Roth did with getrichslowly.org . I can definitely see that it would be a hard decision to hang onto or sell if your heart is no longer in it and the sweet offer comes in…
You always need to weigh the value of the blog/business against the amount offered by a prospective buyer. Does your blog guarantee you a ROI within 6 months? Do you still receive a good amount of daily visitors? Are you happy with your blog? A lot of questions that need to be answered. So make a good decision without any regrets.
Matt,
Great points! Some offers are just too good to pass up, while others are just people fishing for a steal of a deal. Thanks for stopping by!