Building profitable websites has never been easier.
One of the key advantages is that these websites can be built with little knowledge and very little startup capital. In most cases, all that is required is a domain name and hosting account, which can be purchased from one of the major providers for around $ 100 per year.
The lack of major barriers to entry has made this model an attractive one for those with little money and lots of time. With the right niche theme, a website built from scratch can go from nothing to $ 1,000, $ 2,000, or even $ 5,000 per month in just 12 to 18 months.
A lesser-known business model that has grown in importance is building and selling these websites to portfolio investors. A website priced at $ 1,000 monthly is typically offered at a multiple of the website's monthly income and can be pre-sold for anywhere from $ 15,000 to $ 25,000 in cash. Many website builders prefer to sell their websites and use that cash injection to build teams that will repeat the process many times over.
If this model interests you, here are ten tips to get you started:
1. Niche selection (and keyword research) is key.
Don't bother targeting one industry. Instead, target a subset of that industry or “niche”. Smart Passive Income and Dumb Passive Income have a few resources that can help you find the right target niche.
2. WordPress makes it easy to create websites.
This Content Management System (CMS) has made it a lot easier for the non-tech to get started, and there are thousands of different plug-and-play themes and layouts to choose from.
3. Start with simple monetization methods.
Selling physical products can be worthwhile, but you also need to deal with how the items are made, stored, shipped, and so on. Instead, check out programs like Google AdSense, which pays you per ad click, or the Amazon affiliate program, which pays you a percentage of all purchases made.
4. Starter websites are fine, but profitable websites are better.
You can build and sell unproven websites before they even make any money. The upside is that you don't have to wait 12 to 18 months for the website to mature enough for you to start making money. The downside is that anyone can do it and the prices for these websites are terribly low.
5. Build a website for users, not search engines.
While websites are generally valued at multiples of net monthly income, buyers are willing to pay a premium for clean looking, non-formulaic websites. Does the site look like it was made by a hobbyist in the niche? Great! Does it look like it was created using a template that hundreds of other websites were created on? Not so great.
6. Expect to fail … first.
Everyone makes mistakes on their first website. Don't worry – this is a skill that can be improved with practice.
7. Maximize Your Profits That Lead To Sales.
Cut down on unnecessary expenses or expenses. Since the price is based on a multiple of the monthly net profit, you want to maximize that profit for a minimum of six months leading to a sale.
8. Plan a smooth transition for the new buyer.
Buyers don't want to buy websites where all of the intellectual capital is in the mind of the seller. If you can write clear Standard Operating Instructions (SOPs) that the buyer can follow after the purchase, your website will be much more attractive to buyers.
9. First, find a strategic buyer.
A portfolio investor / buyer can only value the website by multiples of the profit, but a strategic investor can gain a lot more from your users, traffic, etc. If he's in a similar or competitive industry, he may be ready to buy your website for a premium.
10. Keep running the site until the deal is closed.
Whether you are listing the website for sale on an auction platform or through a website broker, nothing will detract from the selling price more than a neglected website. Keep the website running as if you would keep it until the deal is closed.
There is a small but rapidly growing industry of website sellers, buyers, and investors making millions in transactions every month. The best way to get involved in this lucrative industry is to just get started!
Justin Cooke is a partner on Brokerage EmpireFlippers.com and hosts the Empire Flippers podcast.