April 05, 2018 11:57 PM
Case Study: What Happens When You Want to Sell Your Blog?
Today’s post is a case study with one of our past ProBlogger Event speakers, Sharon Gourlay. Sharon has built up two blogs with relatively passive traffic building strategies. Today she tells her story of selling her first blog.
When I started my travel blog back in 2005, I never imagined I’d be selling it.
After all, I just wanted to tell my family and friends what I was up to. I had no idea it would become a business that supported my family.
Even when it became a central part of our lives ten years later, it was like another child to me. I loved it, coddled it, and put so much of myself into it.
I learned a lot from growing and monetising my blog. I also learned a lot from selling it. And in this post I want to walk you through the process of selling my blog, and what I learned.
The interesting part is that getting a blog ready to sell is really about making your blog more valuable. And that’s something every blog owner can benefit from—even if they never plan to sell.
So whether you’re planning on selling your blog one day or not, my tips will help you get your blog earning more without needing your constant attention. It will help reduce the stress of running your blog while making more money. And if you ever decide to sell, you’ll walk away with the maximum amount possible.
Why I decided to sell my blog
So how did my blog go from something I thought of a another child to something I couldn’t wait to get rid of?
There were a few reasons.
I had way too many sites, and needed to let some go so I could focus my energy better. I’d just sold my first niche site, and letting it go felt so good that I decided to sell all my other niche sites and have just my two main blogs.
Then I realised I’d be better off getting rid of the blog (where I spent a lot of my time) rather than the sites that brought in money without any effort.
It also coincided with me restructuring my business. Thanks to some bad advice, I’d just discovered I’d have to pay capital gains on the value of my business to move it to a company structure. I couldn’t afford to pay tax on something I wasn’t getting and value from, so selling it made a lot of sense.
And of course, the money from the sale would remove a lot of the financial pressure as I worked on building up my second blog.
But the biggest reason I decided to sell it is that I simply didn’t want to do it anymore.
I started writing about travel because I was passionate about it. Travelling was the one time I could really live in the moment.
But blogging about travel ruined that for me. I took it very seriously, and while my blog became very successful, travel became more and more stressful. My brain worked overtime as I analysed every aspect of what I was doing and how I would write about it.
We also did crazy things like visiting six attractions in a day. Try that with three young kids.
Towards the end I was exhausted and burnt out. I hated everything about the blog, and stopped working on it.
Thanks to my business model (using Google for traffic and affiliate marketing for income), money was still coming in. But no income is truly passive, and I knew my earnings would decrease over time if I couldn’t rekindle my passion.
And then I found myself on Facebook, where I described my blog as a gangrenous arm that needed to be cut off.
It was time to sell.
What buyers are looking for in a blog
No-one buys a blog because they’re passionate about the topic. They buy it because they think it’s a good business to own.
Which means they’re looking for a good business model.
They aren’t interested in what many of us bloggers stress over—page views, number of followers, etc. They want to know:
- How much money the blog makes
- How much time you spend on the blog
- The business costs
Yes, a blog with strong metrics in page views, email subscribers and social media can make it more attractive. And they may want to talk about how you do what you do. But what they’ll care about the most is how much money the blog makes.
So don’t be too concerned about page views, number of likes, etc. They really don’t matter that much. What you should be concerned about is whether your blog is doing what you wanted it to do. Anyone looking to pay good money for a blog will want to be sure they’re getting good a return on their investment.
And page views don’t pay the bills.
A lot of people didn’t think I could sell my blog because my name and image is all over it. But that’s not a problem so long as it doesn’t need you to make money.
How to work out the value of a blog
Figuring out the value of a blog is the same as figuring out the value of any businesses. You need to look as the profit it makes.
Along with my travel blog I’ve sold three other sites, and each time the value was based on a multiple of its monthly or annual profit.
Note that we’re talking about profit, not revenue, which means you need to subtract a wage for the effort you’ve been putting in.
A good broker will ask you to estimate how much time you spend on your blog each month, and put a value on that time. For me, they recommend US$25 an hour.
And just like any other business cost, this gets subtracted from the revenue.
While multiples vary, a good starting point is:
- monthly profit x 20 for a site less than three years old
- monthly profit x 30 for a site more than three years old.
Monthly profits are based on the site’s average income over the past year.
If profit has been steadily increasing you may be able to base your calculations on the past six or even three months’ worth of figures. But chances are you’ll get a lower multiple. For example, the profit of one site I sold was going up steadily, and the overall profit of previous six months was higher than the six months before that. I was able to use the average of these months, but the multiple went from 30 to 29.
My travel blog had a good steady income, big audience numbers, and potential for monetisation beyond affiliate marketing. It also appealed to people who wanted a passive income and to be able to claim their travel as a tax deduction. That meant I could list the site for a higher multiple than those earlier examples.
Depending on your site, and exactly what you’re offering, you may have to negotiate the price when you find a buyer.
But again, page views and social media followers didn’t matter, and played no part in the negotiations.
How to sell a blog
You’ve probably heard of Flippa—a well-known platform for selling sites.
I sold two sites on there recently, and it’s a relatively painless process.
However, I only recommend Flippa for low-value sites worth less than $10,000. At this price level, you’ll struggle to get a good broker.
For a blog doing well, you’re better off using a broker.
For the two higher-priced sites I sold last year, I used Empire Flippers and FE International.
I had very positive experiences with them both.
They both have a similar process. Expect to spend a few full-on days getting your financials together. There’s a format they need to go in, and you’ll have to show proof of everything – a receipt for every payment and some type of tracking for every payment.
You’ll also need to write a lot about your blog to explain to potential buyers what it’s all about, why it’s a good purchase, what tasks you work on, etc.
Once you hand over everything, expect them to keep coming back with more questions and wanting more proof of various things.
This was the most (and possibly only) frustrating part of the process for me. I wanted my sites for sale immediately, but we did this back and forth for a couple of weeks and sometimes it didn’t seem necessary.
When this process is finished, they’ll tell you the price they want to list the site for. (You’re allowed to negotiate.)
Once you both agree on a price, the details are put up on the broker’s site and sent out to their email list.
Potential buyers may ask questions that you’ll need to be ready to answer. They may request a phone call to discuss it further, and will probably want access to your Google Analytics and, in my case, Amazon affiliate account.
For each buyer there might be a contract discussion (more about this later) and possibly haggling over the price.
These options took a 15% cut of the purchase price. Empire Flippers and Flippa also have listing fees. It can be a lot of money, but I think it was worth it. My sites all sold not long after they were listed, which would never have happened otherwise.
While Flippa doesn’t really do much for the money, using a broker is fantastic. I didn’t have to deal with enquiries, and they have processes to ensure they only deal with serious buyers and I’m not sharing my financial information with everyone in the world.
Buyers also like buying through a broker because they know they’ve done a lot of due diligence, which minimises the risk of fake information and protects both parties.
Once you have a buyer, they also make the transition process very painless. They’ll do the negotiations, write the contracts, and ensure you won’t be ripped off by someone taking your site without paying you.
I highly recommend FE International or Empire Flippers for selling your blog.
I found Empire Flippers better for sites that are straightforward, such as my niche site that I spent basically no time on and was all about SEO traffic and affiliate income.
They also make potential buyers pay a refundable deposit to see your site data, which helps keep away nosey people (and potential competitors).
For sites that have a higher value and/or get more complicated (e.g. most blogs), I found FE international better. I’m glad I sold my blog with them. They tell you how they’ll value the blog and what price to expect before you have to start providing all the information.
Empire Flippers will only discuss this after you’ve provided all the information. But they do have a calculator on their site you can use to value your blog.
Making a contract for your blog
The biggest concern I had about selling my blog was the new owner using photos of my kids in ways I didn’t like, or perhaps impersonating me.
Thankfully, you can make a contract for your blog sale with any conditions you want (assuming the buyer agrees).
I made sure my broker understood I needed clauses that helped me feel less concerned about these points.
The buyer may also have concerns that they’ll want to negotiate on. For example, they’ll probably want a clause that says you can’t build a competing blog for at least two years. There may also be clauses about you training them to run your blog.
Another clause will specify when you get paid. On Empire Flippers, the buyer had a few weeks to verify the income before the money was released from escrow to me.
FE International had a policy of releasing the money as soon as everything was handed over.
If you have any concerns about how the new buyer will handle your blog and its assets, discuss it with your broker and potential buyers in advance so you come up with a solution.
Handing over the blog
This was far less painful than I expected.
After the buyer puts the money for the blog in escrow, you’ll start the handover. (Your broker can help with this.)
FE International helped me complete a huge handover document that specified everything the new owner needed to know including:
- how to get to the blog
- social media logins
- which affiliate accounts they needed to set up where
- how to run the site day to day.
It meant the buyer had access to everything immediately, making the transfer fast, easy and smooth.
To make things even easier we give the hosting accounts to the new owners. Hosts such as SiteGround let you change the owner’s details. If you can’t transfer the site yourself, the broker or your host can help.
I also use shared Google drive folders to put everything related to my sites, from logo images to affiliate partner contacts.
It’s a good idea to be readily available during the handover. We had Skype calls to help things move along. After all, the faster the handover happens, the faster you get paid.
Within a few days of the sale going through, I had the money for my blog.
My top 3 tips for selling your blog (or for building a more valuable blog)
1. Start removing yourself from the blog 12 months in advance
The only mistake I made in selling my blog was not deciding 12 months in advance so I could better remove myself and my family.
There are two reasons you may want to do this.
Firstly, a blog will be more attractive to buyers if it doesn’t look like it relies on you. Having your photo all over it isn’t ideal.
A better idea is to start using a pen name in advance, and limit the amount of yourself on the blog.
It’s also a good idea if you feel nervous about selling your image, and what can feel like part of your identity, to someone else. It’s much easier to just remove anything you don’t want on there before you sell it, rather than coming up with conditions you hope the other person will abide by.
You may also want to remove some of the more personal posts.
You need to do this 12 months in advance because you can’t change anything that could affect the business operation of the blog just before you sell it.
If you remove posts or change the site much in the months leading up to the sale, the buyer will have a legitimate concern that the earnings you declared aren’t correct. How much your blog earns is obviously affected by what’s on your blog.
It’s also a good idea to remove yourself from the day-to-day running on the blog. Your blog will look more attractive if you already have a trained VA that the new buyer can also hire.
This should also raise the value of the blog, as a VA usually costs less your own hourly rate.
Even if you don’t have plans to sell your blog any time soon (or ever), it’s worth looking at these areas. For example, it’s good to regularly reflect and adjust how much of yourself and your family you want to share with your readers. And becoming less essential in the day-to-day running of the blog is a great way to save yourself a lot of stress and have more time to work on more important tasks in your business.
2. Concentrate on passive income sources
The value of your blog is all about the profit you’re making. So the easiest way to increase your blog value is to make more money with less effort.
Thankfully, this is easy to achieve.
I always focused on getting traffic with SEO and converting it with affiliate marketing. It not only helped my blog earn a lot of money, but also made it worth a lot of money because of its passive income potential.
I recommend working on this aspect of blogging before you decide to sell your blog.
Start learning about buying keywords and reader intent. Making affiliate profits is easiest when your blog attracts readers that have a buying mindset. They want to buy something, and just need you to point them in the right direction.
SEO is a very powerful way to do this, as you can write articles using keywords people use when they’re in this buying mindset. These ‘buying keywords’ are statements such as “best juicer”, “juicer reviews”, and “top juicer on the market”.
Let’s say you have a health blog, and publish an article on the best juicers that helps people find the perfect one (with an affiliate link of course). If you can rank on the first page of Google for these keywords, you can make a lot of ongoing cash with very little effort.
Even a few articles like this that rank well in Google and convert well with an affiliate can add a few thousand dollars to your monthly profits.
Multiply that by 30, and you could add an extra $90,000 to your blog value.
And if you don’t sell your blog, the extra money will be great in your pocket.
There are other ways to make more passive income. Display advertisements using services like Mediavine or Google AdSense are a good option.
Products that don’t need much ongoing support (e.g. eBooks) can also be passive once you have a sales funnel set up.
3. Stop worrying about page views and social media followers
The best way to find time for the things I’ve mentioned (such as growing your passive income) is to cut out all the tasks that don’t really matter.
It also means you won’t need to work as much, which will also increase your profits.
I highly recommend going through your task list every month and removing anything that isn’t directly related to your blogging goals—even if you aren’t selling your blog.
So unless your prime goal is to get x number of page views, stop working on tasks just to get more traffic. If you want to make good money with affiliates, focus on getting the right sort of traffic instead.
It can be hard to let go of things sometimes, such as going on social media. But if it’s just sucking away your time instead of helping you reach your goals, it’s worth focusing that energy elsewhere.
It’s been a few months now since I sold my blog, and I haven’t regretted it for a second. It feels strange not being a travel blogger anymore after being so focused on it, but it feels great to have let it go and moved on to my other blog, DigitalNomadWannabe.com, where I get to do work that I love.
Whether you should sell your blog or not is a very personal decision.
If you’re considering it, I recommend working on the three tips I mentioned earlier as soon as possible so you’ll be in a better position when it’s time to sell. When I decided to sell I was so over it that I couldn’t give myself a year to remove myself the way I would have liked.
Even if you never end up selling your blog, you’re have more income for less work. And that’s got to be a bonus.
TO READ THE FULL ARTICLE: https://smitanairjain.blog/
ABOUT THE AUTHOR
Sharon Gourlay is an Australian blogger who now only blogs about SEO, internet marketing and making money from blogging at DigitalNomadWannabe.com.
Publisher (Source): Microsoft launches AI and entry-level software development courses – TechCrunch
Disclosure: Smita Nair Jain has nothing to disclose. She doesn’t own stock in any publicly traded companies and does not hold investments in the technology companies. She has equivalent of the American 401(k) plan in India that is automatically managed. (Updated: April 05, 2018)
Disclaimer: The opinions, beliefs and viewpoints expressed by the various author(s), publisher(s) and forum participant(s) on this web site do not necessarily reflect the opinions, beliefs and viewpoints of the @SmitaNairJain or official policies of the #SmitaNairJain
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