Not everyone wants to sell their website. But if you’re planning an exit strategy, maximize the amount of money your site sells for. This post offers some practical suggestions for increasing your site’s value.
- Invest in a premium domain name. In real estate, a house in a good location is more valuable that a house in a less desirable location. The same is true on the Internet. A site on a premium domain is worth more than the same site on a less desirable domain. For example, “hotels.com” is a more valuable Web property than “180096hotel.com”. (That was the actual domain for the original site–I know, because I worked there.) I don’t think Hotels.com would have made near as much money during the IPO had they retained the older domain name, do you?
- Develop a social media following. It doesn’t matter whether your site is supported via advertising, affiliate programs, or direct sales, it’s worth more money if you have a social media following to include with the sale. This could mean a huge list of Twitter followers or a bunch of Facebook fans or whatever. Pinterest might be more appropriate if you’re operating a site that focuses on images. Anything you can do to diversify your traffic sources will make your business more valuable to a prospective buyer.
- Add content. Increasing the amount of unique content on your site almost always results in more visitors. So if you don’t already have a blog on your site, add one. Other ways to create additional content include launching a forum on your site, or creating a content section on a topic related to your main content. For example, if you’re operating a site with hotel reviews, consider expanding your content with sections for restaurant reviews, event tickets, car rentals, or airfare. Incremental content almost always results in incremental revenue.
- Acquire high value links. You want links that actually send traffic. Eric Ward claims that he gets less than 10% of his traffic from Google. The other 90% of his traffic comes from links. (Some of it probably comes from Bing and Yahoo, too.) With that kind of diversified traffic stream, his business relies less on Google’s algorithm. That means if he were ever to sell his site, he could command a higher earnings multiple on his sale price. His risk of a major traffic loss related to a Google algorithm update is significantly lower than someone who gets 90% of his traffic from Google.
- Split test. It doesn’t matter what kind of business you’re in, if you split test your calls to action, you’ll increase your conversion rates. Since most sites sell at a multiple of their earnings, increasing your earnings with a higher clickthrough rate on your advertising will increase the price of the site. If you have a 1% CTR now, you should easily be able to double or triple that by experimenting with ad placement, colors, sizes, etc.
- Raise your prices. If you’re running an affiliate site, negotiate a higher commission with your vendor. If you’re driving significant volume, you should be able to command double the standard commission rate for that vendor. If you rely on advertising via direct sales, raise your rates. If you sell a product, experiment with raising the pricing until you’ve maximized your profitability. Anything you can do to make your site more profitable will increase its sale price.
- Diversify your income streams. If you’re running an affiliate site, and you only have a single advertiser, then your site could become more valuable instantly. All you have to do is create a product to sell. (Think “information product.”) On the other hand, if you’re selling stuff, adding contextual advertising or affiliate links for related products can increase your revenue. Selling direct advertising for a flat dollar amount works even better than Adsense or affiliate sales, but it takes more work on your part.
Those are just some of my ideas about increasing the value of your website. I’m interested in what other people (especially people who have sold sites themselves) think. Share your opinions in the comments, please.
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