With the current frenzy of sites being sold as webmasters attempt to cash in on their long-awaited Google PageRank, you may be tempted to jump on the bandwagon and sell your site.
But here’s what you need to know before you sell it:
Now that your site is established, it’s primed to be a money maker and you may actually miss out on cash if you sell it right now!
To illustrate, consider a modest site that has grown to the point of earning $500 per month. Using the rule of thumb that a site is worth 10x it’s monthly earnings, the site would be valued at around $5000. Now factor into that equation that things move pretty fast on the internet and that it’s not unreasonable for a site’s profits to grow at 5% per month.
Therefore, if you wait a month before you sell it the earnings per month could rise to $525 and the site would be valued at $5250. You’ll also earn $500 in that month you waited which means that if you waited just one month to sell your site, you would find yourself $750 better off.
Keep at it for 6 months and you’ll be $4782.36 better off than if you sold your site now!
The opportunity cost
Of course, the other side of the equation is that you could take the $5000 now and invest it in something that gives you 191% annual return to earn that $4782 in 6 months. Let me know if you find that investment.
So what should you do?
Putting time into a website is like building a business and selling it for a “quick flip” isn’t always the best thing to do. The internet enjoys rapid growth and revenue for minimal capital outlay and you exploit this to your benefit.
If the site has reached it’s limit or you don’t have time for it anymore - sell it - but if it’s still growing and you’re still prepared to devote yourself to it then you should probably stick around and enjoy the cash flow.