Sell A Website – Your Millionaire Exit Plan
How To: Building A Million Dollar Website Business
Today I wanted to let you know… I’m a millionaire! Well… sort of.
I’m a millionaire just like Mark Zuckerberg is a billionaire. You see Mark founded Facebook and Facebook is worth billions so technically he’s like a billionaire?!
You see, I own IncomeDiary and a whole bunch of other websites and based on what a broker told me, I’m worth a fair chuck of change.
Websites typically sell for 12 – 18 times monthly revenue. However this isn’t the rule. If your website is an authority website, has a great brand, has real “potential”, is making a significant amount of money (lets say… at least tens of thousands of dollars a month), then well it can be pretty much any amount you money someone is willing to pay for it. In a down economy (or so the broker called it), you should expect 2 – 4 years revenue. But again, let me stress, this isn’t the rule. Some sell for a lot more.
Back to my point, based on that hooharr of a paragraph, yes my business would in fact sell for at least $1,000,000 (I’d hope significantly more), which would make me a millionaire? Right?
It’s a weird world but I wouldn’t ever consider saying that out-loud in a public places around actually people. As far as I’m concerned, you don’t have a million dollars till it’s in your bank. Having said that, I do own a website network worth a lot of money, so let me give you a few ideas on how you can do it yourself.
First however I would just like to make perhaps the most important point in setting up any business:
What is your website exit plan?
Who is going to buy your online business and how much for?
I can’t tell you how often I ask a website owner what their Exit Plan is and they cannot give me a straight answer. Yet so many website owners just make this assumption that somehow it will just all work out fine? To put it another way, lets say today that I want to do a North American road trip from New York City to Los Angeles – do you think I would ever get to Los Angeles if I did not decide in advance that was my destination? My Exit Plan? Of course I wouldn’t make it – and nor will you either with your business if you don’t have an exit plan!
How To Build a Web Business Worth a Million Dollars
Building a massive online business is quite simple. Actually, when I go over it in my head, it seems almost idiot proof, that surely nobody could get it wrong. Of course I don’t believe that to actually be the case but I do believe online entrepreneurs who have made a few bucks online can follow in my footprints and do the exact same thing. The idea is simple, build a great website portfolio with lot’s of great websites.
Here’s how:
My 6 top tips for creating a big, bad-ass, money making online business.
1) Outsource Everything (Not like those newbies tell you though)
Whoever is going to buy your business, they want to know that they can be relatively hands off and that you have a great team that runs everything. (If the website relies on you alone it will be difficult to sell)
So just hire lot’s of people in India to do everything right? Wrong!
Nothing against Indian Programmers or article writers – (Or indeed any non-native English Speaking teams) there are some fine ones around but my experience has been that I get a better result for some skills – hiring locally. Sure it costs me a lot more but if it gets me a better job done and adds more value to my business, that is what counts.
You will have heard me say before – “You can’t outsource Passion” – and it is true, but you will get closer to it I find with individuals who understand you and your objectives and my experience has been that I stand a better chance of that by hiring locally.
I pay my web team lb45 a hour (approx $70 per hour). In the past year I have spent well over lb40,000 ($64,000) on my blog network alone with them, getting them to improve sites and build new ones. Every time they do a redesign, I make more money because I learn from the past one.
I pay my brother a decent wage for his age and education. He does a lot of articles for different sites I own and that means I can spend that time I use to spend on writing, on doing other things like managing my team. If I paid $6 for a article on some forum, I would see a article written by someone most likely who’s first language is not English and doesn’t have any interest in what they are writing about. This is obvious to the reader and Google and doesn’t benefit my business in anyway. Bottom line, pay more, get someone better, it’s so worth it!
OK, I will admit there are some excellent overseas outsource teams – I have friends who swear by teams they employ in the Ukraine and also Romania and of course India – but all of them admit they had to go through a lot of teams before they found a team they could rely on. And yes, you can get let down by local teams also – it is just that my personal experience that you can manage local teams easier and while cost will almost certainly be higher the chances of getting what you want, done as you wish and to the standard you require first time is much higher!
2) Diversify Your Traffic Sources
One thing people buying your site will be looking at is Google Traffic. If I’m getting 1000 visitors a day from Google and that’s 60% of my traffic and then Google decides that they are going to change their algorithm and rank sites differently, then I’m screwed! Thousands of top sites have over night lost over half their traffic from Google because of something just like this. To a potential buyer, this would worry them because you are so reliant on the big G.
Here’s what you do: You drive traffic in more than 1 way. Here’s a quick check list of things you must be doing:
- Social Media
- Social Networking (network with people online so they become your friend and then make them link to you Mwahahahahah).
- Content Directory’s
- Make Your Website Sticky (so people keep coming back).
3) Invest, Invest, Invest!
Hand on heart, I would not be anywhere near as successful if I didn’t invest so much into my business. If your making money, forget spending it on a nice car (at least not right now) and invest it into your business. Spending $5,000 on getting some software developed could see a $50,000 return in a month. The same for so many other things. I’ve begun investing quite a lot of money into article writers, not cheap ones, but ones that know a lot about the subject that they are writing about! Content means I can get more traffic which means I’m going to make more money. Here’s a few suggestions on what you could invest in:
- New website design
- Article Writers
- Software Development
- Graphics
- Buy Other Peoples Websites
- Invest in Educational Products To Further Your Learning
- Buy Traffic
- Get a Better Computer
The list is endless. I’ve done all this and it makes your business bigger and better. Here’s the simplistic way to show you why you should invest:
Build a website, make $100 a month and do nothing new month after month and keep making $100 a month.
Month 12, your making $100
Or….
Build a website, make $100, invest the $100 into a premium theme, next month you make $120. Keep investing and investing.
Month 12 your making $340
Now imagine the increases when your making $10,000 a month and investing half of it.
4) Work Hard (At least at the beginning)
Entrepreneurship is about living a few years of your life like most won’t so that you can live the rest of your life like most can’t.
This means, work now, make lots of money and spending years to come in a lovely house watching your neighbor go to work every day while you live your idea of “the dream”.
I’ve always been lazy, it’s so hard to work when you don’t have to. When I lived at my parents, I was young, didn’t have to pay much rent and my lifestyle didn’t require me to earn a lot of money. I moved out, had to make more money, worked hard, got my business up to the level where it could maintain my lifestyle and then got lazy again. This is something I’ve done time after time as I have increased my spending and lifestyle. The importance here is, make sure you have the right team so you aren’t reliant on the success of your business.
5) Build a Network Of Websites
When you start your online business it’s vital you don’t do the following: Build lot’s of different websites.
It is not best to have 10 small websites, it’s best to have 1 massive one. Once you have achieved that, then you move on and build more sites related to that first website. This is exactly what I have done. A great example of this is TutsPlus network. They started with a blog about Freelancing, then Photoshop Tutorials, then Coding Tutorials and it just kept growing, creating new sites offering what their readers wanted to know more about. In 5 short years they are making millions because they expanded and invested.
6) Have The End In Mind & Work Towards It
I find this to be really vital to my success. If I didn’t have a clear understanding of where I wanted my business to go, what I wanted it to stand for and what It’s going to look like, then I wouldn’t be as successful as I am. I know that replying to negative emails won’t get me closer to my goal. There are so many things you are probably focusing on that are irrelevant to your end goal and the success of your website. Cut them out and you find you will have a lot more time to focus on the things that are import.
Just make sure you keep working towards an Exit that makes you very wealthy!
I would really love to hear about your exit plans in the comments below? Better still if you have already made a successful exit? Share the experience – and of course if you have any questions or suggestions for even more improved business clarity share that as well.
Would You Like Our Help To Sell Your Online Business? Selling a business is one of the most important financial decisions you will make. Don’t get it wrong! If you own an eCommerce, Amazon FBA, SaaS & Technology, Service Based, Adsense, Affiliate, digital products or content-based business and are considering selling or just want a valuation, our recommended website broker team can help: Claim Your Free Website Valuation & Exit Strategy Today
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Congratulations on what that one broker told you!
I have a question though… you always used to just outsource to india. What changed? If you now hire locally (and if so, well done… everyone should do it) then how come you started doing that?
I agree with that. I worked with a few from India. and the time it took to explain what I needed and didnt was a pain. The culture differences are a big issue.
I now stay local and like Michael said, it is a lil more expensive but the job gets done in half the time, and the communication flows nicely.
These are things you need to look at over price when it comes to outsourcing….trust me lol
But is there any chance to find any worker on some TOP notch out sourcing companies like oDesk or so? On the other hand for new Bloggers how to get some new articles?
Thanks Indeed
Sumon
I completely agree John (and Michael), as a developer I often have to take over projects started by overseas outsources and it really is disastrous! I do not know how any body can cope with dealing with them (in general of course, I know many great Indian developers), it is hard enough to read their code.
Michael, I’m a huge fan of your posts! I love how you go into great depth and detail for every step you describe. Saying it is one thing though, and walking the walk a completely different ball game. You manage to do both exceptionally well.
Keep it up
This was such a motivating post. I am so impressed with what you have accomplished Michael. Keep up the great work and thanks for sharing this with us.
Re: When you start your online business it’s vital you don’t do the following: Build lot’s of different websites.
It is not best to have 10 small websites, it’s best to have 1 massive one. Once you have achieved that, then you move on and build more sites related to that first website. This is exactly what I have done. A great example of this is TutsPlus network. They started with a blog about Freelancing, then Photoshop Tutorials, then Coding Tutorials and it just kept growing, creating new sites offering what their readers wanted to know more about. In 5 short years they are making millions because they expanded and invested.
I agree I own 12 websites, but 2 of the websites are my main focus at the moment, and I am building to be large websites. I will go live site by site, with the others as i continue growing my main sites. They are all related and it seems I am on the right track, Great article.
As someone who is just beginning to enter this arena, it’s refreshing to interact with someone who is further down the path. Congratulations on your growth!
It’s particularly heartening to read how you outsource. As a user of many websites, it’s fairly easy to tell the content that is useful from the content that is just there because the ads need something to frame them.
Quality is indeed… King.
Thanks again for the continued content and motivating words…
It’s rear you get to read such comments on what you are about to implement.
Yeah! outsourcing is one puzzle am just about to tuckle and all thats written about on this blog has been of great value.
Thanks
Great post – I outsource, and similar to you I use people in England (this is where I currently live), but also I have people build up in NZ, Aus, Philippines and India. My plan is to move a fair bit of work to the Philippines as they are such great, hardworking people!!
I own numerous businesses, including an online marketing authority blog, a internet marketing a business owner forum, property letting company and an internet marketing company. If I was to do all my work myself, I would run myself into the ground. By outsourcing and scaling up I now have more time on my hands, I earn more, and I help a lot more people!
Outsourcing is very very effective (whether locally or abroad).
I like the post but I love the dialog comments. You guys bring up a lot of good points about where to outsource to. Do you guys just find your own people to source to or get recommendations from others? Michael what else do you outsource ? Thanks and Cheers
Congratulations on the growth, and I’m sure over the years that figure will grow
Some great points for us all, on how you achieved it, and the most powerful takeaway, is leveraging on others. Using others skills to leveraging your business, and building a team around you that is Good, to whom you can delegate your tasks.
Great article Michael! And very inspiring!
I just have one question if you spend all your hard earned money and time building your website and brand such as IncomeDiary would it affect the sites worth when you sell it and a complete stranger starts putting up content?
Inmean when I coke here I do so because of you and your great information or info from those you trust.
So can it afffect your reputation once you sell it or do you still stick around?
My exit plan is to build my authority websites and
Have them py me for years to
Come. I couldn’t imagine selling my brand and putting I in the hands of a stranger.
Great post Michael. You make some very valid points in this one that a lot of people probably never think of. I finds it was kind of hard to look at an exit strategy when I was so focused on building the business. Do you have any suggestions on how to change focus from one to the other.
Keep up the great work!
Your point about being lazy just struck a chord and I have realized that I have plateaued at the point where I am just meeting my expenses and not growing at the rate I should be.
I need to get a team in place so my success is not reliant on me, just like you said.
Great post… Thanks Michael.
Cheers
Ian McConnell
After having “played” a little with some websites in the past, my serious journey began dec 2010, so I consider myself still a newbie.
I don’t have any income as yet, but know that outsourcing is the way to produce more.
That’s why I use fiverr.com and now and then elance.com
Great comments BUT…Any “exit strategy” stories out there?
I have to admit i’ve been avoiding thinking about an exit strategy. Still working on achieving a monthly financial goal of 25k per month. I will bring myself to spend some time on this.
Tremendously enjoyed this article.
Hey Michael, thanks again for an outstanding and inspiring post. Your blog has always helped me get some insight into what blogging is all about and how the world of business on internet works.
You are absolutely right in saying that the aim should be kept in mind before starting on any journey. And selling the business at a premium is a good enough aim to have.
I recently wrote and article about – Blogging Success – What is the Motivation behind your Blog. As money stands above all motivation factors, selling the blog after making a worthwhile business is good enough motivation factor to keep blogging.
I am from India, and I agree about hiring Indians for work. I have been outsourcing my clients work since the past 3 years, and Indians and Filipinos are the worst I have worked with. They cost me (literally) $39,000 in client fees. I can never forget that. I now work only with Americans and Brits.
Michael,
I have only recently started investing a lot of my online income back into my business.
This post reminded me that I’m doing the right thing. It’s tempting to buy a new huge TV or some other “cool” thing, but if you do, that money is gone.
If you invest it back into your business, it grows and will produce multiple “TVs” for you.
Awesome information. Thank you.
Thanks for this! I will deffinately need to get in to outsourcing at a later date. Right now I am deep in it with learning the ins and outs. I really have made a point of trying to learn all aspects of marketing, so I can also explain to the outsourced help what I want and know what I am getting back.
Thanks again!
Ryan K
Like you say, make an awesome website (establish yourself in a niche) and then expand. Digging an inch-wide, mile-deep is better than digging a mile-wide, inch-deep.
Congrats and thanks for sharing.
Good information micheal, you had some capital to start with though. Some of us dont have enough capital but im a big fan of your selling businesses theory.
Great Information Michael.
Michael: Great point about diversifying your traffic sources. During the past year a countless number of marketers have had to start over from ground zero because their primary traffic source got hammered. Your traffic sources need to be like a well diversified stock portfolio — don’t put all your eggs in one basket.
Well done on this fantastic achievement Michael!
But… what is YOUR exit plan? Or did I miss that somewhere along the line…
You don’t have to answer… LOL
Thanks for putting a dream project and in your opinion, how much money or % of the monthly earning should be spent on buying quality links?
Something new and innovative to read in my today’s reading section online and think it would be also one of the best article to motivate me regarding designing my exit door.
Thanks
Wow awesome post very Knowledgeable post :
Thanks for sharing. Always good know what is happening with other website and blogs.
Congratulations Michael,
Your story and blog has inspired me to create an authority site and my own wordpress plugin.
Thanks Michael,
Keep up the good work.
Congrats on the new found (and earned) wealth!
It reminds me of my uncle, a raspberry farmer from Oregon. In the end he was worth millions. Why? The land he farmed. And the income from it. And his simple life.
We build value into things or we spend our efforts on stuff. Sure money in the bank is good. But it is not the value of your network that is so important. It is what you know and how to build that network, that is the true value. Your true wealth. And someday you will be worth FAR more than a million.
Just found your site. Will be spending more time here. Anyone with the traffic you have is worth my time.
Thanks Michael,
Bruce
Hi Michael,
You are a true inspiration to people just starting out. Congrats on creating such great (and highly valuable!) sites that people love to visit.
I liked what you said about being lazy and overcoming it! I guess everyone falls into that trap, but anyone that wants to be successful needs to keep working at it and grow their business.
Cheers Michael
Gonna create one million exit plan right now for my site. Great post thanks a lot!
Not quite sure how you would think about an exit strategy when you get so wrapped up in building a business. I guess the exit should be part of the building. Thanks for the great post Michael, I always enjoy your work.
Leah
I run and own numerous businesses, and our main online project (which I have set up with another well known UK marketer) which helps other business owners and internet marketers has been set up with the intention of it building to be a valuable asset.
We have kept this separate to our names (i.e. a rich brandable domain) so that we build the brand rather than ourselves – which would make it harder to value and sell long run.
It is really important that people have a long term exit strategy in plan like you mention in this post. Often we set ourselves up in the beginning without looking at the long term objectives.
Great article like usual.
Excellent Michael. We all need an exit plan, no matter what our business. And no matter what, we should never stick with one website. Myself, I’m just starting to build up my Internet Marketing blog just like IncomeDiary.
Then I have a network of over 100 websites. Slowly building up 100 Adsense sites, 100 Amazon sites, 100 CPA sites, 100 affiliate sites, 2 dozen authority sites and my own personal IM blog. Carefully planning my exit strategy as I go along. Thanks for the tips!
I agree with your comment above Michael, the best way to find help is to ask people you know, it’s the best way to find good talent and also it keeps them accountable. People who know people through people (wow that was weird) are far more likely to care about what you think of the job done since there’s a chance you will go back to the person who referred them.