In July 2008, I was on a mission.
I wanted to start a blog so that people that needed a financial planner could find me online and then hire me.
That was my sole purpose of getting Good Financial Cents off the ground.
I was oblivious that people could actually make real money from their blogs through Google Adsense, affiliate conversions, banner ads, etc.
It was a world that I didn’t even know existed.
Fast forward four years later and now I’m fully emerged into blogging and I love it!
Most people that don’t get blogging view it solely as a hobby; they don’t think you can actually make money online.
Surprise! You can. 🙂
And when you start making money on your blog, it no longer remains just a hobby You now have a legitimate business that has a real value.
Think about it. If your blog is making money, than you have an income generating asset that is really worth something, and if something has value, there will always be a potential buyer.
For Sale?
I have never thought about selling my blog.
I know there are some big blogs in the personal finance space that have sold for a large sum.
How large? Like 7 figure large.
Even though I saw those sites sell it was something that still never crossed my mind.
Occasionally I get unsolicited emails from potential buyers, but most of them are bogus. They are hoping your clueless when it comes to valuing your blog and that you’ll take some low ball offer. Those emails get quickly marked “spam” and move one.
Then one day I received the following email:
Hello. I like your blog. Wanna sell?
This email was a lot different than any previous one that I had received. The first difference was that they actually addressed me by my first name. Do you know how many emails I get that start with “Hi,”.
Do you know how many of those are immediately marked “spam”? Hint: ALL OF THEM.
The second item that caught my curiosity was that they referenced other sites they owned which were solid domains. (I marked them out to protect the buyer).
Even still I wasn’t interested in selling, but I was curious to learn more about how they valued my site and what they were willing to pay. I shot them back a short email letting them know just that. Here was their response:
I’m not a spammer. I really like your blog. Pinky promise.
After a few more email exchanges I could tell that they were very serious about buying my site. What was really intriguing was that they were willing to keep me on as “founding editor” so that if people still wanted to hire me for my financial planning services they still could. Plus, they were not going to make me sign a non-compete clause. That means that if I wanted to start a new financial planning blog I could. That was huge.
All these factors enticed me to at least get on the phone with my suitors to see what they were willing to pay.
The Call
I set the call for a Friday morning. That was intentional so that if they did make me an offer that I couldn’t refuse, I would at least have the weekend to think about it.
The call started out very good. They were very complimentary of my site. One of the most attractive features of my site was the personal branding element that I had pulled off quite well. This actually surprised me because I’ve always been fearful that if I ever wanted to sell my blog that I had too much of “me” in the site, but their comments said otherwise.
Most of the call consisted of me sharing some of my income numbers which I thought was funny. All they had to do is read the income reports on this blog. 🙂
We also talked about my traffic numbers. I was upfront with them how my site had got hit by Panda but thus far had sustained any further Penguin updates. (You can read more more how my site got hit by Panda and what I did to get out of it).
He then verified some of my top ranking keywords to see if they matched what his research tools were telling him. After some more questions came the question I was waiting for:
How much would you sell your site for?
The Dramatic Pause
If there is one valuable lesson to be learned here, this it:
Never name your price.
Even if it’s $1 million dollars don’t let the buyer know what you would be willing to sell for. This is often referred to as a “price anchor” and you never want your buyer to know what yours is. At least in the first round of negotiating.
Make them tell you how much they think your site is worth.
When I finally had to address his question, I responded, “I’m not really sure what I would sell for. My blog is my baby plus I’ve seen significant revenue growth in the past year.”
The buyer was full aware of my other online projects such as my book, Soldier of Finance, and The Debt Movement, so I think he was hopeful that I was ready to move on from this blog and focus my efforts that way. Much of his sales pitch was centered around that with also the potential for capital gains tax to go up in future years dangling the lower taxes carrot in front of me.
I still never hinted at a selling price. The only thing I really mustered was something like, “If I were to sell, I would want a buyer that saw the value that my blog has as well as future potential”.
Finally after hemming and hawing around it, he finally said that without even seeing my Google Analytics that he would offer me $150,000 cash for my site.
Do you know how many times I get offered $150,000 cash for something? Not often!
If I felt that my site was worth more, he would need to get access to my analytics so they could determine what their valuation would be.
The conversation ended with me deciding if I would allow them access and continue discussions of a possible sell. As planned, I had the weekend to think about it.
I had already decided on the phone call that day, but I thought I would it be at least worth sleeping on.
My wife and I talked about it for a while and she even asked me the question “What would I sell for?”. I couldn’t even answer her.
I think that’s when I really knew the answer.
There’s no need to drag it out as I decided not to sell. What I thought would be helpful to you is to share why I chose not to sell.
Why I Said “Thanks, but no thanks”
Reason #1: This is my baby
I have spent hours, upon hours, upon hours researching blogging and getting my site the exact way that I wanted. It’s almost like I’ve raised a kid! My blog is my baby and it just turned four years old. The thought of giving it away, even at a nice selling price, is still a hard pill to swallow. <gulp>
Also, the exposure that it gets me is priceless. A recent example was that I was asked to write for Market Watch owned by the Wall Street Journal.
How did they find me? My blog!
I’ve had so many opportunities like this present themselves all because of my little ol’ blog.
Reason #2: $150,000 is not a game changer
Don’t get me wrong, $150,000 is A LOT of money. But at this point in my life, it’s not that large of a sum that changes the way that I live. You also have to keep in mind that I wouldn’t be netting the full $150,000. After taxes, broker fees, etc., I would probably net closer to $100,000.
I still think I could have got more had I allowed access to Analytics. My hunch is that the offer would have been in the $250k-$350k range.
Do I know that for sure? Of course not, but based on certain metrics I think it would have been a fair offer.
If I were ever to sell the blog, I would have to get an amount that would generate a nice passive income. With interest rates being so low, I’d be lucky to get 4% on my money before tax. Even if the blog sold for $1 million that would only be $40,000 a year, which is a nice chunk of change, but still not a game changer.
Reason #3: My blog revenue is growing
You can check my opening income report in December of 2011 where my blog brought in roughly just under $1200. Over the last several months, my blog has been averaging between $7000, $8000, and even $9000 a month – a huge increase.
I didn’t even start affiliate marketing until spring of last year. That has dramatically increased now that I’ve been able to put more effort into it.
Will the streak continue in 2013? Only Google knows the true answer to that question but I know that I’m not going to let up anytime soon.
What would you have done in my situation? Am I crazy for not selling or at least countering?
I think your buyer may have contacted me a while back too. I am in a different stage than you but I asked how they valued sites and turned them down because I had much higher hopes for my online future! They also wanted access to my analytics but I declined before I gave them access.
hey Lance
good move, as some buyers are too naughty… trying to force us to give our baby away like that… a baby’s a baby… you cannot sell it regardless a price, right?
I don’t think you’re crazy at all! I’m so attached to my blog, so I would have done the same.
I certainly can understand your passion about your blog. Your blog is your voice and an extension of yourself. Yet and still, it is a business asset. Knowing the value of that asset on the open market was valuable info to have, in and of itself.
However,I’m glad you didn’t sell, but I must admit I have personal reasons. I love your blog.
I know how you feel, having your blog be ‘your baby’! I feel like BSB is part of my identity, in a way!! Good for you to sticking for your guns– I’m sure you will far surpass the 150k over the lifetime of the site 🙂
I think you should have given him your Analytics. It is not such a serious thing to do so. Further, selling for, say $250k, may not be a game changer, but it brings forward and liquidates value you have developed, and then you can start again, but with a pile of cash or no mortgage.
Lastly – how did you get to that valuation? At $9k a month profit, and a high end multiple of 20x (12-16 is more common) you still only get to $180k.
Rod
@ Rod If I thought he would have offered me the “game changer” amount, I probably would have. Since he initially offered $150k, I didn’t expect him to.
Maybe our niches are different but there have been blogs in the personal finance space that have sold for larger multiples than the 12-16x that you say is more common. I’ve seen 26 to 36 months recently, for example. Even more if the blogger agrees to stay on board.
Your story is amazing. I would also have declined the same offer. You can make more than that in the next 3 years with your current revenue growth
At first, I was like WTF mate!
But at end of the article, you wrote that you are basically averaging now about $8K a month. So for you to get the $150K at your current income would take about 1.5 – 2 years. (I’m talking massively basic numbers here with no details – or tax!). Clearly if your income is on an upwards trend, then that time will reduce. You stay on that monthly income for that amount of time, then you made the correct decision!
You would have got more if you showed your analytics obviously.
However, the point is, it depends what your life/game plan is. The injection of cash that $150K brings won’t last that long at all, you would HAVE to continue working as hard as you are right now to stay afloat in the future. If you want an easy comfortable life, stick to your blog… if you want to take a gamble and start something brand new with a huge chuck of change, take the offer!
Have I ever commented on this blog? I guess not. Sorry, but my first comment is gonna be a sarcastic one. Please enlighten me as to how much your blog is really worth (a private email if don’t wanna share it publicly) because I don’t think it’s worth $150,000 (perhaps $100,000 represents it’s worth more accurately). C’mon, look at the sites that sell on Flippa and their prices. There ain’t no space for $9,000 per month blogs in the $150,000 price/valuation world.
@ Charley A blog (or any asset) is worth what a person is willing to pay for it, right?
I had an offer for $150k, so it’s worth at least that according to that buyer.
Flippa is a buyer’s market, not a seller’s. I would never try to sell there myself. If I ever sold, I assume it would be a private deal.
I assure you that Quinnstreet paid a higher multiple for these sites: http://investor.quinstreet.com/releasedetail.cfm?releaseid=626992
I think you did the right choice.
Even factoring that you need to pay someone to take care of the blog (let’s say $1,500 per month to have someone really working on the site), you still net at least $6,000 per month. At 72K profit before taxes, you should have been able to sell it at around 350K (so 5 times the profit).
Since you don’t need the money, I guess that if you ever get overloaded, paying someone $1,500 per month to manage your site and keep a healthy profit of 72K per year is still a better plan than selling for 350K!
That’s the problem with most business; they rack-up a lot more money for the owner than they could get by selling it. I guess the only good moment to sell is when you don’t want to take care of it anymore.
And you are right; private auction with serious buyers will definitely brings more dough than flippa 🙂
Jeff – very inspiring! I’m glad you held out for a better offer. I think GFC has a lot of room to grow and if that business was offering a 21x multiplier they must think so too.
I just found this site off of Twitter and I’m excited to follow your journey in the future. It’s motivating to see someone taking a “Pat Flynn” approach to income reports and transparency, but who doesn’t have the Pat Flynn level of income. Seeing your income report starting at “only” $3000/month a year ago and where you’ve taken your sites in 12 months definitely makes it seem much more attainable.
Thanks for sharing this information!
Glad you found our site!
It definitely is possible, but A LOT of work. Looks like your blog has been going for almost a year so I think you get that.
The cool thing now is that, while yes blogging is much more competitive, there are a lot of tools/resources that can speed it along.
2012 has been humbling amazing at the growth we’ve had and I don’t plan on letting up any in 2013. 🙂
P.S.
If you want a copy of my book Soldier of Finance when it finally gets printed later this year be glad to send you a copy. 🙂
I would love to get a copy of it! I still need to finally sit down and read Doug Nordman’s Military Guide, but I’m sure I can do that before your book is published.
I wish I had found your SOF site 2 days ago for my Outstanding Military PF Blogs post. Next time for sure! It’s good finding other military personal finance bloggers.
Nice website and impressive income! And I understand why you wouldn’t want to sell it since you’re attached to it. I wouldn’t want to sell my site either, and I get requests every week.
Awesome story Jeff and glad you didn’t sell your baby! After a situation like this, should one actually do their due diligence and find their magic number? Nice to see your hard work paying off. How do you find the time with your huge family and being a financial planner as well? Keep up the great work!
Thanks, Buck! It’s often challenging to find the time, but I just do. Who really needs 8 hours of sleep, right? 🙂
I think you should have countered with a percent of income in perpetuity or for as long as you were editor and more than 150,000. I guess I just don’t understand the sentiment.. It’s a great blog but it’s a business blog, which doesn’t hearken thoughts of emotional attachments.
However, kudos to you. It’s always inspiring to see someone able to write their own ticket !
Now a question, why isn’t this blog Mobile ???
@ Jami Some blog buyers will arrange a deal where the blogger stays on and that was offered to me. I guess I just wasn’t ready to give up control because I’ve fought for so long to have a voice. Don’t think I mentioned this in the post, but I completely changed my business structure with my financial planning practice just so I could blog the way I wanted to. I share more of that here.
Re: being mobile. Busted! Horrible, isn’t it? I used to have WP Touch installed but I didn’t like it anymore because it didn’t make it easy for people to share stuff via social media. So I turned it off. I’ll hopefully soon move my blog over to Genesis and making it responsive is one of my main focuses. Thank you for calling me out. 🙂