This past weekend, Syed was invited to attend a great marketing conference organized by an Internet Marketing Company based out of Florida, BlueGlass. So this week, Syed will be covering some of the sessions that might be of interest for our audience.
The title of this session was “How to Buy and Sell Web Companies (The Right Way)”, but I have made it so it targets our audience because the principle concepts shared in the panel could be applied within our blog industry. This panel was moderated by a good friend of mine Neil Patel, from CrazyEgg, KissMetrics, and now KissInsights. The panelists were John Ferber, co-founder of DomainHoldings famous for Advertising.com which was sold to AOL for $345 million. Jon Kelly, VP of QuintStreet, and Kris Jones of PepperJam Network. All four guys who have plenty of experience selling their companies for millions.
So the panel covered to main aspects: When do you sell? And What do you look when you buy? I believe as a seller and a buyer, you must understand both sides. So here is my review of the session.
When Do You Sell?
If there is one thing that these guys stressed, it was timing. Timing to all four of them was crucial in selling their businesses. But after they all shared their stories about how their timing was right, I started to wonder how do you determine when is the right time. They answered most of the time, timing is a “gut feeling”, but you can use measures within your business to determine if the timing is right. Here are some key points that you should consider when you are ready to sell your business:
Has the company outgrown your ability to grow it?
Do you think you have reached the point where growth seems to be stopped because you do not have the resources to make it grow. This is a question that you can answer by looking at your revenue stream, traffic on your site, new subscriber rates, etc. etc.
Are you looking for an EXIT or Resources?
Sometimes people do not want an exit, they just want resources. But they often fail to realize that taking an exit is not the only solution. You can get additional resources by raising funds to increase the growth of your business. Evaluate what do you really want to do.
How would you feel IF…?
You need to make sure that you have no regrets once you sold your business. So think about the possible outcomes after you sell your company. What if I kept the company and sales plunged down 50%? How would you react to that. What if you sell, and sales tripled? How would you react to that? You need to make sure that there are no regrets when you are selling.
Who is your targeted buyer, and where can you find it?
Your targeted buyer is someone who can benefit from acquiring your site. For example, if we want to sell our site, StudioPress or Headway would be our targeted buyer. If you already know your buyer, then you may contact them privately either by yourself or through a third party agent. You can also use forum marketplaces that are on Digital Point, NamePros, and others. You can also use the popular marketplace known as Flippa to sell your sites.
What to look when you are buying?
After selling their businesses, these panelists have acquired numerous other companies as well. So they also shared what they look into when buying companies. Here are some of the keypoints you should consider when buying a blog business:
Is the site scalable?
Has the site created a brand that is going to last? Does it have good rankings? You need to look into these areas critically when you are looking to buy a blog. Often spammers use black hat techniques to boost their ranking, so you need to be extra aware.
What is the Potential Value of this site?
Often people are looking at real-life value, but as a buyer you should also consider the potential revenue. Because sometimes, a site might not make the owner enough money, but together with your business, it may make you millions. You need to look at the potential value. Often Good domains boost up the potential value of the site.
Can you take it to the next level?
If you are buying a blog business, can you take it to the next level? Obviously the owner is selling for a reason such as sluggish growth. Can you keep up the growth or take it to the next level with your resources and expertise? You need to answer this question before you buy a business.
Does it have steady revenue?
If you are paying money to acquire this site, then you need to know that this site has steady revenue. You need to look at each revenue source and evaluate whether it is reliable for long term.
I found this session to be very helpful, and I also think that it will be helpful to our readers as well.