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Would you sell your Cash Cow?

by iMarketer
16 replies
Ok warriors - I want some honest feedback here. I've got a site that's producing good cashflow - really good - and I just found out I have a possibility of selling it for about 3x annual net.

That's a lot of money. Like about six times what I used to make in a year in my previous life.

So here's the question - if you were in my shoes - would you sell? Or hang onto the thing?

As I said, it provides good cashflow. But, would you give it all away to have a few years coin all up front?

Here's my thinking: I sell it now, basically taking three or more years of pay at a discount today, then focus on something else. Presumably I get some other sort of business off the ground in the meantime, and perhaps repeat. By this time, instead of running two businesses, I've sold two and essentially doubled my productivity for those three years.

Does that make sense? Has anyone else faced this question? What did you do? What would you do?
#cash #cow #sell #sell website
  • Profile picture of the author Dan Grossman
    If it takes more than 4 hours a week to run, I would sell it.

    I'm looking for a buyer for one of my low six-figure a year websites myself, but it's hard to get high multiples with the economy plunging, so I might have to wait until next year.

    You lucked out getting an offer, assuming they can actually pay up.
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  • Profile picture of the author Darth Executor
    Sell it, then invest the money in something else.
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  • Profile picture of the author mookinman
    This is a very good question... I have an established "potential cash cow" in the guitar niche... but I simply don't have the time to promote it... I get about 20-50 (I think) uniques a day just trickling in from articles and youtube vids I created earlier this year, and I get a couple of sales per week from it (pretty insignificant). I don't do anything to promote it any more, the sales just trickle in.

    I know for a fact that if I actively promoted this site, with youtube vids, more articles, and other methods, it could bring in a lot more (exactly how much more, who knows?), but I just don't have the time, plus I'm bored of it to be honest. Much too busy concentrating on niches I'm more passionate about.

    I think the OP has just prompted me to put the site on sale. Feel free to PM me if you're interested!
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  • Profile picture of the author davebo
    Banned
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    • Profile picture of the author tiger325
      if someone is interested in it and it is making money for you then I would hold on to it until you get a better offer
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      • Profile picture of the author alyoung
        I think it comes down to how much you value your time. Unless it is very time consuming to maintain your current cashflow and your time would better be served elsewhere I would hold onto it.

        Selling for 3x net seems low to me. I think you can get a better offer.
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        • Profile picture of the author alyoung
          Wait, I read that wrong. 3x Annual net is a pretty good offer. Still it goes back to the value of your time. Sounds like a tough call, but you can't really lose either way.
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  • Profile picture of the author samstephens
    It depends - do you have another source of income? Can you create, in the next three years, another cash cow?

    If so, then if it was me, I'd sell.

    I'm a big believer than pretty much any business is for sale for the right price.

    cheers
    Sam
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  • Profile picture of the author Mike Hill
    Well here's how I look at it...

    You're getting 3 years worth of pay now, instead of having to wait. I'd sell and create another cash cow in a different market using the same principles you used to create this one.

    You'll make more by selling it because:

    a. you'll have 3 years wages NOW
    b. you have the opportunity to work on another cash cow
    c. You didn't have to work the entire 3 years on that site to create the cash

    If you didn't sell then you'd still have to put in the time for the next 3 years to get the wages you were looking for. At the end of those 3 years you will still be in the same position you are in now assuming you don't work extra hours.

    If you sell now you will have 3 years income and free time to work on another cash cow.

    Mike Hill
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    • Profile picture of the author iMarketer
      Thanks guys - some interested ideas here.

      I'm a little conflicted because the site really doesn't take that much time to run (like an hour a week I guess) - but its all PPC driven so I've got fairly high recurring expenses, and its in the loans niche which isn't super hot right now. Earnings are off a bit from the summer, but I'm sure it will come back in a few months.

      Still, I tend to agree with Mike - I'd get three years' pay up front which would give me some other options.

      To clarify - I don't have an actual offer, but I've been talking to a fellow from Quiet Light Brokerage (anyone familiar?) and he's saying it should bring 250k - 300k, with something like a 60-70% chance of actually selling. He'd then take 10% which I gather is pretty standard.

      Anyone else dealt with this broker, or other site brokers?
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  • Profile picture of the author samstephens
    That looks like an interesting brokerage service - the price sounds right - 10 to 15% is normal.

    I'd like to hear if anyone else has used their services before, as well?

    cheers
    Sam
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  • Profile picture of the author ForumJoiner
    I know this might sound unusual, but some people managed to sell only 50% of the site. This way, they kept the cash cow and the money.

    The owner of the site is like a shareholder. You just sell 50% of your shares to another shareholder.
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  • Profile picture of the author iMarketer
    Now that is interesting... half the site eh? I guess you'd have to setup a corporation for just that site, then do things legally with shares and all that. Still, and interesting idea. You get cashflow, and a decent sum up front. Mind you, then I'd still have to manage it..
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    • Profile picture of the author ForumJoiner
      Originally Posted by iMarketer View Post

      I guess you'd have to setup a corporation for just that site, then do things legally with shares and all that.
      Not necessarily. The company that buys your site will give you 50% of the shareholders and 50% of the monthly income. An individual can be a shareholder - it's THEIR task to have a company, which usually they already have.


      Originally Posted by iMarketer View Post

      then I'd still have to manage it..
      This can be set within the contract. For instance, they add the new content (sometimes they even comes with new design), but they give you 50% of the money they get each month.

      They pay you 50% for the traffic you already have to the site.
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  • Profile picture of the author Money on the Side
    Sounds like you know what you are doing...and what you want to do. I'd say sell and get started on the next thing. Good luck!
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  • Profile picture of the author Sweeney
    Definitely sell it.

    I've been wondering the same thing myself.. but I thought sites only sold for their annual net, not 3x.

    But at the same time.. maybe it's better to put a little more work into the site and REALLY cash out.
    I think the *key* is.. do you think you can do it again? (aka another cash cow)
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  • Profile picture of the author rondo
    What would you do with the money? If you have a reason to sell it (paying off your mortgage etc) then sell it. If not, hang on to it and develop it further.


    Andrew
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