Show Me The Money: In business, everything has a price
In business, everything has a price.
This past May I bought a blog. I developed it. I became attached to it. Emotionally attached. It was my fun little project.
Then two weeks ago I was offered an unsolicited bid that was 15x monthly revenue. That’s a great offer in terms of standard 10x monthly profit pricing models that are common on the net. I refused the bid. For one thing, I loved the site. For another, I think the whole 10x monthly revenue is either silly or ludicrous.
At first I said to myself, “Just say no. You’re having too much fun with the site. Plus it’ll grow value over time.”
Then I remembered why I bought the site in the first place: to make money. In business, everything has a price. So, I decided to go back with a counter offer that was 36x monthly revenue. You read that right. 36x monthly revenue. 3 years. Remember how I said that 10x monthly profit is ridiculous? In my view, 3 years of revenue is fair.
So here’s how things progressed. At first I was given an unsolicited offer. That means that I wasn’t ready to sell. I was inclined to reject the idea altogether because I loved the site. But then I came up with what I viewed as a fair value, a price that I didn’t expect anyone to really pay.
In other words, I said to the bidder: “If you really want it, then show me the money.” Much to my surprise, after a few more back and forths, we worked out an agreement that I’m very, very happy with.
What’s the moral of the story? Well, never let emotional attachment get in the way of someone who’s willing to show you the money! Business is business. Know the value that you see in your sites and price them accordingly. And in the end, when it comes to business, everything has a price. So if you get an unsolicited bid, don’t say no, say “Show me the money!”
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The coolest thing about this is you are totally right 10x for profitable sites is the norm but its totally slanted. Peole need to think long term.
The buyer made a rock solid decision and you are happy. Talk about a succesful gamble. You’ve now mastered the art of a good blog sale negotiation.
Welcome to the league of awesomeness.