Should I sell my online business?

For many affiliates, marketing and ad buying are only one step on the road to success. There’s a bigger world out there where people buy and sell sites, stores, and apps, and in so doing they move from smaller to larger businesses as their entrepreneurial journey continues.

But how do you go from buying ad placements and selling products to buying and selling businesses? Flippa CEO Blake Hutchison has the roadmap you need to take control of your future as a business owner, and he shared some choice secrets at a recent Affiliate World event.

Why Sell an Online Business? 💰

Many business owners find the idea of selling their business — their baby — to be ridiculous. Why should someone else profit from all of your hard work?

But four common reasons lead business owners to head for the exit, and some (or all) of them might apply to you too.

1. Capitalize on Your Investment
Standalone online businesses like ecommerce sites, blogs, and affiliate revenue-generating websites can succeed independently, but investors or buyers may see that company as an asset that can be added or incorporated into a larger business.

Depending on the business, owners can get as much as 3-6x adjusted net profit based on the company’s valuation. Further, a successful exit can help you…

2. Reinvest in Alternative Ventures
Selling an online business creates an influx of capital that opens up entirely new worlds of investment and entrepreneurship that aren’t available otherwise.

According to Blake, many of the business owners on Flippa are planning to use their sale to reinvest in ventures like commercial real estate, which might be a better fit or require less work than maintaining a blog or ecommerce site.

3. Leverage Strong Buyer Demand
Compared to established markets like commercial real estate, online businesses are a relatively immature asset class that remains under the radar for many investors.
Secular Growth of an Asset Class

Also, companies like those on Flippa are rarely traded publicly, which means buyers who are interested in strong assets are more willing to compete and pay a premium for robust companies that can further their own vision.

4. Recognize Your Limits
Over time, founders who build a business from scratch often find that they hit an upper limit on what their company is capable of. You can put all of the right people and processes in the right place, but there comes a time when scaling the business exceeds the owner’s desire or bandwidth to do so.

In these cases, selling to an investor or group that has the resources to scale — and is willing to pay a high price to do so — could be the best scenario for both seller and buyer.

3 Things Buyers are Looking For 🧐

If you decide to sell your business, you’ll need to ensure that your business is optimized for what buyers are looking for. On Flippa, buyers typically want to check all three of the following boxes before investing.

1. Maturity of the Asset
The average age of an asset on the Flippa platform is at least four years old, which demonstrates stability over time.

2. Consistent Performance
Fast growth or steady declines are red flags to buyers.

3. Evidence of Diversification
Over-dependence on a single channel or platform, like Amazon Associates or one affiliate program, can be perceived as a risk.