How I bought a website earning $1k/month for ~$2,700 upfront
I’m kicking off the new year with a look at a website I recently purchased. From beginning to end, this site took fourteen months to close, and had some interesting ups & downs along the way. I figured the story was worth telling, as it involved both an earnout agreement and buyer-side financing.
That was an interesting read, thanks.
I tried to do a little acquisition a few months back, but it stalled over a difference of a 0.5x revenue multiple (I wanted to pay 2x, they needed 2.5x+). But, at the very least, this article has reminded me that it's worth checking in every so often to see if they've changed their minds.
One question I have is, given the way it has been financed and the debt burden you're carrying for the next year or so on it, how do you think about ending up with an alligator (i.e., owing more per month than it delivers)? Is it simply part of the game, or do you feel like it's a negligible possibility given the improvements you wrote about?
I ask because I've always been hugely wary of this sort of financing, yet you seem to see it as a pure positive, so I'd like to learn more about the thought process behind that.
Yup, that's definitely always a risk. Part of the game.
In fact for the first 6 months there's a chance that the site will run at a loss while I put money into design & SEO.
But I think the strength of the trend alone should carry things forward nicely. I'm pretty confident the site will avoid alligator territory in the long run.
Very interesting and motivational as well. Thanks for sharing
Thanks for sharing, Stefan. I subscribed after reading.
Pretty interesting read. I learned a lot about website buying and selling. I didn't even know that was a thing until today!
Welcome to the club, starting with this post is like jumping into the deep end! Check out Flippa's blog if you want to dial things back a bit. Any questions let me know!
Interesting! By the way, I sent you an email.
the title is misleading , he financed the deal ...
After reading the entire article, it seems to me like the title fits his article exactly. He did pay $2,768 upfront. He also says in the post that it included buyer-side financing. So it's not misleading at all.
This opened my eyes to stuff I know nothing about - website buying and selling. It was extremely enlightening for me personally.
Thank you. The title isn't misleading in the least. It is literally 100% what happened.
I hate clickbait titles on IH :(
Me too. How is this the least bit clickbait though? The title says literally what happened.
Thanks for sharing Stefan!
How stable do you think the monetization will be?
Aside from that one page dependency, both traffic and revenue are well-diversified. Combine that with the strength of the trend, and I think it should be in pretty good shape for years.
Great read and very useful tips for site valuation!
And yet the Google Analytics screenshot shows the exact landing pages.
Doh! Whoops! Ah well, like I said I'm not too shy about sharing.
<website removed>
Yep, I was trying to be a nice person by not posting it ;)
True, but I don't think I'm not being nice by sharing it.
It's a really good case study for those of us that:
struggle to generate and grow traffic
are interested in content-oriented designs
like unique designs. I don't think I've ever seen a site where the menu is below the fold and I like the way they use the columns
hadn't ever considered a website as a business model
So I was super interested to learn how it's done.
@stefanvonimhof I apologize and will delete the link if you want.
Oh no worries, no apology required. But yeah if you don't mind I'd appreciate a deletion. Thanks!
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Have you checked Flippa lately? Obviously I'm biased, but things have a changed a lot. Sourcing good sites is always the tough part - if it was easy everyone would do it. But Flippa has come a long way in recent years. There is some really, truly great stuff on there.