Selling Your Website: Here’s The Data Buyers Want To See

Selling a website, much like selling any business, requires owners to provide potential buyers with relevant information about their business. Thankfully, the data that is typically requested is fairly straightforward and almost always digital in nature.

If you’re considering selling your website or even an entire web-based platform, the following starting point for data likely to be requested is a great starting point. 

Analytics

Google Analytics, Chartbeat, Parsley, regardless of which platform you are using, a potential buyer is likely to request access to your account in order to verify session, user, page views, and other analytical data. 

There are two ways you can go about providing this information. First, you can provide screenshots of all numbers being requested by a buyer. Second, you can give visitor (read-only) access to your analytics platform(s). 

Keep in mind, if you have been running your website for more than a year, the buyer will typically want to examine various forms of data ranging from annual down to monthly and possibly even weekly reports.

Because of the complexity associated with analytics, we strongly recommend providing direct access to serious buyers. If you’re uncomfortable with unfettered access, a simple non-disclosure agreement can be used to secure your private data. 

A Monthly P&L Year-To-Date Statement

A P&L statement summarizes a business’s revenue, costs, and all expenses incurred in operating the business. These statements are typically most useful on a monthly, quarterly, and annual basis.  

Website buyers are typically looking for websites with some level of steady traffic and growing, or in the least, steady revenue streams. A monthly profit-and-loss statement for each month of the current year will provide a quick snapshot of the website’s operations, growth, and sustainability.

Previous Years P&L Statements

Along with the current year-to-date P&L documents, buyers typically want to see how you’ve grown your business over the previous years of operation. At HMG Capital we ask to see the current year plus the previous two years of operating statements. 

The current year P&L and previous year P&L statements should be delivered in an excel format if possible.

Revenue Partner Exports Or Account Access

If you’re running a website that focuses on driving revenue from ads, a buyer will want to see your total earnings in the form of revenue partner exports. 

Exports can usually be quickly requested directly from a partner’s ad portal or through a direct request to the ad partner.

You can also provide a potential buyer with direct access to your accounts and allow them to pull this data. We do suggest that you verify the reputation of any potential buyer before giving direct access to your revenue-based accounts. 

Operations Overview

Buying a company is about more than just the profits it can generate. A serious buyer will need to understand what it takes to operate your business. Below is a small list of potential considerations you will want to provide to your website’s potential new owner. 

  1. Publishing Cadence: How many articles are published each day, week, month, etc. 
    1. Are articles published at a certain time of the day?
    2. Are articles assigned by an editor, chosen by writers, picked in a different way?
      1. Essentially, what is the start to finish content production process (ideation, writing, editing, moderation)?
  1. How are daily operations handled? 
    1. Is there a team or person responsible for handling revenue partners?
    2. Is there someone specifically in charge of editorial decisions?
    3. Are there in-house employees, contract workers, guest posts, etc?
    4. How many hours per week does the owner put into the platform?
      1. What does the owner do on a daily basis to maintain and grow the website?
    5. Is there someone in charge of third-party partnerships, such as social media account management, and third-party partnerships such as affiliate marketing?
    6. Overview of Social operations (content production, scheduling, volume)
    7. Overview of Email marketing operations (production, strategy)
    8. Overview pf Referral operations (sources, strategy, insights, tech/software)
  1. SEO Practices
    1. What is your SEO strategy?
    2. Are you link-building?
  1. Technology
    1. CMS and hosting details.
    2. What plugins, if any, are you running?
    3. What changes have you made to your website in the last 12 months?
  1. Other Assets And Initiatives Tied Into The Website
    1. Are there podcasts, videos or other initiatives included in the sale?
    2. Is there an e-commerce platform being utilized for additional sales?
    3. Are there any other assets not mentioned above that you will be including in the sale?

Because every website is unique, there are often follow-up questions based on the criteria listed above. 

Ultimately, our main goal at HMG Capital is to paint a broad picture of how a website owner has been successfully operating their business and to learn what it will take to maintain the website’s growth and build upon the parts of its operation that has made it successful. 

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Brokerage Versus Private Website Sale: Advantages And Disadvantages

The sale of a website, like any established business, is a multifaceted process. When a business is serious about acquiring your website, they must determine the full scope of your operations in order to make a deal-closing offer. 

Typically, a buyer will want to understand your business financials, including year-over-year growth (or month-over-month) revenue, the costs of operating the business, and the technological needs for the platform you’ve built.

Selling a profitable website is usually handled in two forms. The first option is to list your website with a brokerage service. Website brokers shop your website around to potential buyers, handle escrow for a potential sale, and offer other services to complete the deal. In exchange, brokerages receive a percentage of the sale from your website. 


The second option is to sell your business to a private buyer, such as HMG Capital. We work directly with website owners to simplify the selling process while helping owners gather all of the information needed to make an offer, with no fees included.

While we obviously want to close sales privately, we understand that such a process might not be the best option for some website owners. Let’s take a look at the advantages and disadvantages of broker and private website sales. 

Broker Sale Advantages

Access to numerous potential buyers: If you’ve been considering a sale, a broker can introduce your website to a lot of buyers. This is often a choice made by website owners who are hoping for a quick sale without the need to research and then reach out to various potential buyers on their own.

Operational support for vetting and selling your business: Need help with legal documents? Having a hard time pulling together financial information because you ran your business for years as a simple pass-through tax entity (LLC or sole proprietorship)? Brokers often provide operational support to gather the necessary documentation to create a general picture of your website’s success. 

Website evaluation is provided to you: Brokers often sell dozens, hundreds, and even thousands of websites every year. For that reason, they can often provide a potential seller with a ballpark estimate of what their website will sell for on the open market. 


Brokers can provide a business deck presentation: If your website is going to sell for 6+ figures, a solid presentation of the business can help increase interest from potential buyers. Many brokers will create a presentation on the website owner’s behalf. These presentations are often optimized to meet the most asked questions of buyers.

Broker Sale Disadvantages

High fees are common: Website sales require a high cost for the owner. According to popular broker Digital Exits, “A website broker’s commission can be anywhere from 6% to 15% of the total sale.” If you’ve been running your website for years, paying 15% for a company that handles a few weeks or even just a few hours of work, can be overly expensive.

If those fees don’t scare you away, keep in mind that other costs are often added, for example, escrow fees are often the seller’s responsibility. You may also be forced to pay processing fees, operational fees, and other costs. The costs associated with your sale vary among the numerous website brokers.

The net revenue acquisition price may be low for smaller websites: IncomeDiary.com notes that smaller websites can often expect a smaller return on their investment when it comes to broker or marketplace sales.

Income Diary points to website marketplace Flippa.com which often sells small to medium websites for 8 to 10 times monthly revenue. 

For example, If your website earns $5,000 per month or $60,000 per year, that could mean receiving as little at $40,000 to $60,000 instead of the $120,000 to $180,000 you could expect from a private seller offering 2x to 3x of the website’s total value.

Expertise is sometimes lacking with brokers: In many cases, brokers are only in the business of finding potential buyers. If you operate a website that operates within a specific niche, a broker may undervalue your business by applying a simple net value pricing calculation without thinking about the value of the industry you operate within.

You may also find yourself waiting months for a buyer, only to learn that your website hasn’t found any interest from their specific list of buyers.


Inaccurate info may be passed on to a buyer: When you sell through a broker and task them with collecting business information, there is always the chance of error. Imagine selling your business, only to run into legal and other issues with the buyer because your business was misrepresented. Some brokers offer protections in these cases, others do not. If you decide to work directly with a broker, we can provide you with some excellent choices since we often work with many of the world’s top brokerage services.

If you provide all of the information requested by a broker, make sure your final term sheet specifically notes that you provided all requested information and that the info you provided specifically satisfies all requirements to finalize the deal.

Term sheets can be heavy-handed: If you’ve ever sold a business you’re probably aware of the paperwork that can go into the final sale. It almost feels like you’re signing your life away. When working with a broker we recommend hiring your own lawyer just to ensure the final contract doesn’t disadvantage you in the end.

These contracts are especially important to vet if the broker is selling to one of their established buyers. In any case, you should expect to pay your own personal lawyer to evaluate complex contracts. 

There’s not always a lot of institutional buy-in: A website broker’s job is to sell your website for the highest price possible. This is good news for your pocketbook but not for the future of what you’ve built. We understand that some sellers start their websites solely to make money, we also understand that there are many passionate owner-operators who want to know their hard work will be well taken care of, something that is not guaranteed by a broker.

Private Sale Advantages

The buyer approached you out of genuine interest: We perform our own website acquisitions after thoroughly vetting the websites we’re interested in buying. Private buyers have examined your industry and understand the competitive advantages your website offers. They come to the table with a genuine interest in completing a sale.

There are no fees to close the deal: Why pay 6% to 15% of the sale to a third-party that handles a few weeks or even just a few hours worth of work? $150,000 on a $1 million sale is a lot of money to leave on the table. Private buyers don’t charge a fee, saving buyers a ton of money. 

You know exactly what you’ll get for your website: When HMG Capital is ready to make a deal we provide a simple letter of intent (LOI) that clearly outlines how much we are willing to pay for your website or group of websites if a multi-site deal is being negotiated. This can save a lot of time by providing you with the exact amount of money you stand to earn.

Due diligence is fully established: While brokers will often collect information using automated systems or processes that they attempt to establish across all business types, private buyers work more closely with website owners. At HMG Capital we have established a simple due diligence process that engages our financial, technology, and content teams directly with website owners. It’s a quick process that provides us with a full overview of your business. Once this process is done, you can rest easy knowing our team is working on finalizing a deal.

Your voice matters: When private buyers approach a website owner about a potential sale one of the biggest reasons for the interest is the site’s content. At HMG Capital we have to believe in the content side of the businesses we acquire. By the time we’ve approached you we’ve read many of the articles on your website, determined we love your brand, and want to understand how we can continue pushing the brand forward. 

We have a track record of growing the properties we buy, after all, that’s our entire business plan!

Partnerships are possible: Not ready to sell your entire website? Many private buyers, HMG Capital included, are willing to develop partnerships with website owners. Typically, these deals involve selling a controlling interest in your website, while maintaining some type of ownership. Over one to several years, the buyer has the option to buy more of your interest in the business at the new market valuation for your website. If you want to stay involved in the business you’ve grown and reap higher potential profits in the future, this is a great option. 

The best part of a partnership? You get to focus on what you love while we take care of the operational needs of the business. 

Private Sale Disadvantages

One buyer means one offer: When you’re approached about a sale, you have to feel confident you are getting the best offer possible. Some excited business owners jump at a low-ball offer only to have sellers remorse in the future. We’ve tried to avoid this issue by offering high market rates for the websites we acquire. 

On average, you can expect to earn somewhere between 3x to 4x annual EBITDA. If you’ve developed an established brand with years of steady growth, that number may reflect an even better competitive market rate.

Website selling marketplace Flippa notes that websites worth $300,000 or more sell on average for 2x to 3.2x of their annual EBITDA. 


Contracts can be a mess: Confusing legal jargon, contracts as long as a novel, tons of indemnification clauses, those are just a few of the issues associated with selling a website to many private buyers. 

Don’t worry, we offer a term sheet at HMG Capital that is only a few pages long and we’ve cut out most of the legal jargon to make the sale process incredibly simple and transparent for sellers.

You’ll be more involved in the vetting process: We’ve streamlined the due diligence process but that doesn’t mean there’s no work needed on your end. When selling to a private buyer you’ll be asked to provide all the financial and technological documentation for your company.

You’ll have to download financial statements from your advertising partners, give us read-only access to your site’s analytics platform(s), answer questions about the tech used to power your website, and more. We have nearly 80 employees with various expertise in finance, technology, advertising, content, and more, who will guide you along the way.

If you’re not comfortable with generating reporting from your partners’ systems, you can also provide our team with access and we’ll handle the extra leg work on your behalf.

Conclusion
Both website brokers and private buyers have their advantages and disadvantages. Even as we operate our own direct acquisition program, we still stay in constant contact with brokerage services and we often work with them to acquire properties we see as a good fit for our company.

If you have any questions, feel free to reach out and we’ll show you exactly how simple the selling process will be if we’re interested in buying your business.

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