Sooner or later, everyone who starts a web business has the same thought. Should I sell? Maybe you got an offer. Maybe you’re spending too much time on it, and it’s hurting your health or your social life. Maybe you just got bored, and you want to move on to something new. Should you sell your online business?
My advice is, generally speaking, no. Don’t sell your business without a very good reasons. Here are my five reasons that aren’t good enough.
1. You should never trade cash flow for cash.
An online business is cash flow. It’s a source of income that, while it takes work to maintain, is steady. When you sell a business, you get a sizable chunk of change in your bank account, but that’s it. It’s one lump payment equivalent to only a few months or a year of the income you would get from the business.
With a web business, that cash flow can grow. As you put more time and energy into it, the returns expand. The lump sum of cash decreases over time. With sufficient money, you can put it in a growth account and profit from the interest, but the break-even point there is higher than most businesses will sell for. It’s simply not a worthwhile trade, financially.
2. Websites grow stronger over time.
Websites and web businesses only stagnate when their owners abandon them. If you decide to stop updating your site, stop publishing content, stop answering customer service requests, then yes; your site will dwindle in value until there is nothing left but a web hosting bill.
If you put even a modicum of effort into the site, however, your business can grow and expand. There’s always something you can do to improve, be it adding more products, buffing up support or publishing more varied content.
3. Your problems might be solvable with automation/outsourcing.
Many of the problems that can drive a webmaster to sell their business can be solved in easier ways. It’s difficult enough to find someone to buy a business for the amount you think it’s worth. Why not take a step back and figure out what’s making you want to sell, and solve those problems first?
Most of the time, the problem is a lack of time or energy to keep maintaining the site. It’s fun to build a business, to bring something from concept to reality. It’s a lot harder to maintain it. However, there are thousands of freelancers out there who can perform your business tasks effectively for a relatively low cost. That, and you can use IFTTT, Zapier or any of the hundreds of specific task automation apps to save yourself time.
Yes, there’s always an initial investment involved. Paying for an app or a freelancer costs more than not paying for one. What you need to do then is simply value your time. If automatic a task saves you 10 hours per week, you can calculate how much you would be paid for those 10 hours. If you save money hiring someone else, do it; you can invest your time in something else.
4. Most sites are sold at a loss.
When you’ve reached a stage where you want to sell your business, and it’s not simply because someone came to you with a strong offer, you’re probably desperate. You’re thinking yourself into a corner, with all of the what-ifs and disaster scenarios. You’re burning out, and it’s completely understandable.
The problem is, selling in this situation — and in most other situations — leads to a loss. Desperation means you won’t be thinking clearly or evaluating offers honestly. You’ll be inclined to settle for less than your business is worth, and far less than you’ve invested in it, just to get it off your hands.
It might feel good when you make the sale, but down the road, when the money has run out, you’ll likely regret it.
5. Road bumps don’t mean the end.
Every business has its ups and downs. There are so many massive companies and influential individuals out there that one wrong move can devastate your brand in a way that’s difficult to recover. A supplier can go under, a payment processor can dump you, an influencer can give you a bad review; they’re all potholes in the road to success. You can’t let them get you down. Yes, it’s tough to bear through it and succeed in spite of opposition, but it can be done.
There are some valid reasons why you might want to sell a business, but you should never sell out of desperation, stress or hard times. Sell only if you absolutely have no alternative and need to sell to survive, when you have such a good offer you can’t refuse, or when you truly no longer have time for your business.
Writer: James Parsons