To sell your blog for 6 or 7 figures there are some things that you need to take into account. The major element is the profit that your blog is making. Investors generally seek investments that are going to get them a return on investment so they are looking for blogs that are making money. Not only making money but making it consistently. Although there are some examples of blogs being sold that make no money, in this article we will be talking exclusively about blogs that do make money.
When large media companies come in an purchase and buy a blog for $315 Million then as a blogger you start to question “what is my blog worth?” and how can I attract a large offer when I am looking to sell.
There are the types of things investors look for when buying a blog: Profit, Growth, Strong brand, Other assets (including mailing lists, database etc.), Systems Process, Defensibility, Little Owner Involvement, Diversified Income and Traffic
The following 4 factors are the main elements that investors look when paying 6 or 7 figures for a blog:
The number one deciding factor that will make your blog saleable is the income that it generates. Whether it makes money from advertising revenue, selling your products or services or other people products or services, this factor will be key in defining what your blog is worth and how much you could sell it for.
What investors look for when assessing what your blog is worth is the net earnings or total profit that your blog makes. They will generally then pay a multiple of that net earnings to come up with a figure that determines the valuation of the business.
Generally the lower the multiple the higher the risk of the business and the higher the multiple the lower the risk of the business. The way to look at multiples is as a return on investment.
- 1x multiple = money back in 12 months
- 2 x multiple = money back in 2 years
- 3 x multiple = money back in 3 years
- 4 x multiple = money back in 4 years
There statistics have been gathered from online classifieds website flippa.com, online business for sale sites, website brokers and forum data. They are the average website multiple across 10 sales per category.
The following table shows the monthly profit levels required to achieve a 6-figure sale and a 7-figure sale of your blog.
|1 x earnings||2 x earnings||3 x earnings|
|6 Figure Sale||$8,333 per month||$4167||$2,777 per month|
|7 Figure Sale||$83,333 per month||$41,677 per month||$27,000 per month|
As you can see from our website valuation data post you can see that content sites are selling for a multiple of 2.6 time net earnings. This means that if you have a blog that is making $100,000 per year in sales then it is worth on average $260,000
The second factor to consider is the growth of your blog. Is it growing, declining or stable. If a buyer can see a positive growth trend then they will probably pay a higher price for your business because they will get excited about the future revenue prospects of the business. If for example a website makes $200,000 in net profits for the last 12 months and it is on track to make $250,000 in the next 12 months, this is an attractive investment for any investor.
3) Systems and Processes
In a business you have systems and processes which produce a product or service. That product or service can then be sold to a customer to generate a profit and it is that profit that the business generates that a buyer looks at when assessing the value of your blog. You need to show that you have a repeatable system that to generate those sales. The value of your business is in it’s ability to generate those sales.
So in the case of selling your blog it is the content that you create that attracts an audience. So having a system around generating, producing and syndicating great content is the first type of system that you need. The second type of system is a monetisation system. Depending on the business model that you are running for your blog will depend on the system that you need. What a buyer will be looking for is if they take the business over, will the income be transferred to the new owner. Also having some type of customer service system is necessary. This includes managing emails and support as well as managing social accounts of the website.
If you can remove yourself as the blog owner from these systems and processes you can increase the value of your blog and get a higher price when selling.
When you brand your blog it creates repeat and loyal users. This means that you are going to get more referral traffic , more direct traffic. With the recent google updates buyers are getting more cautious of businesses that solely rely on Google search traffic. Specifically Panda and Penguin have created websites that once had value, lose that completely after being affected by a penalty. What a brand does is it counteracts this problem.