May 2017 was a weird month for me.
Huge mood swings.
My 15 year old dog, Brodie, was dying of cancer.
I was also in the middle of the biggest financial transaction of my life.
I remember walking Brodie one morning, like we do every morning — rain, shine, or subzero temperatures.
He was getting slower and slower. Barely wagging his tail.
Then, I’d see a Skype notification from Rob about a interested buyer or a new offer for our niche site. People were really interested in the site, and that felt good.
In this update, you’ll learn:
- Why we were very nervous about what the site was worth
- The offer we so GLAD we didn’t accept
- The offer we accepted
By the way if you haven’t read the other 10 parts of Project Go White Hat, start here.
- May 1: Site is listed with Empire Flippers (see the listing) for $275,340, a 33x monthly multiple.
- May 16: Offer received for $250,320, BUT it’s a bad deal. It’s $125,160 upfront and an earn out that’ll take years to pay off. (see other offers in the last update)
- May 18: Another interested buyer interviewed with Rob and seemed interested.
- May 19:
- We received an offer overnight for $200,000 with $150,000 upfront. Not great.
- I know Brodie isn’t doing well in the morning. He can barely walk and doesn’t want to stand up so I know it’s time — he’s letting me know.
- My wife and I took Brodie to the vet in the afternoon to put him to sleep. We’re devastated.
- May 23: Another interview, another offer for $180,000 with $135,000 upfront.
- May 25: We get the winning offer.
- May 30: The full sale price is in escrow.
Yeah, ups and downs.
One of the tough parts with Brodie was that I’ve worked from home for several years, even for my corporate job.
I’ve literally spent about 20 hours a day with him, everyday, for the last six years. That’s more time than people spend with their spouses or kids.
Okay. I know you’re here for the Go White Hat Case Study so I’ll get to it.
The Winning Offer
I got this message from Rob:
So he didn’t give me 10 minutes, but I was a-okay with his decision!
We formally accepted the $235,000 offer which was paid in full, all upfront, no payout plan.
One of our biggest issues with the offers we got was the big component of a payout, usually based on earnings of the site.
That’s a HUGE risk for us as the sellers.
- We have no control over what happens to the site once the new owner takes over. They could add a bunch of bad links or get kick out of the Amazon Associate program for another site they own.
Thinking about selling a 6 or 7 figure business?
You should be aware that you may get offers that have a significant payout component. It’s rare for people to have that much cash, even investment groups.
An investment group is definitely trying to limit their risk, and buying a website is riskier than, say, buying real estate.
Just getting to a point where you have a six or seven figure business is amazing. But if you’re planning on selling, then you should be aware that things might be different than you expect.
We got several offers in the $200,000 range, up to $250,000. The issue was that long payout component which is seller financing. It’s not unusual for sellers to help finance the deal with large selling prices, but that’s really not what we were looking for.
We came really close to countering (and maybe accepting) the offer we got on May 23 for $180,000 with $135,000 upfront. That was just two days before the winning offer came in.
The Transition to the Buyer
One of the great things about working with Empire Flippers is they handle all the transition from the seller to the buyer.
So the transition is easy!
They handle the migration from your hosting to the buyer’s hosting account. They update the affiliate links to the owner.
The new owner takes over the site, but we didn’t get the money yet.
The $235,000 sits in an escrow account while the new owner verifies two things:
- Traffic on the site.
- Earnings on Amazon.
The verification period is short, about one to two weeks.
So May was a tough but exciting month. It was great to get the winning offer, and of course, really tough to lose Brodie.
In the NEXT UPDATE, Part 12:
- I talk about why we sold and didn’t grow the site.
- The new owner gives us an update on the verification.
- The escrow is released.