Can You Sell A New Business?

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For whatever reason, you want to sell a business or a website you recently started. What's a good point at which to make an exit? Knowing this can make a ten-fold difference to what you can expect to get for your equity.

First, let's get one thing very clear: If you are essentially bailing because the business isn't panning out how you expected, it's very unlikely you can convince a buyer to take it off your hands. A dud's a dud, but it's scary how often the founder doesn't realise it

There are three phases to any website business.

In the first phase there's the Idea Formation, Market Research, Choosing and Buying a domain/s, Paying for Hosting, Creating a Template, Commissioning Programming/scripts, Getting a Functional Site, Basic Branding, Creating Pages/Products (such as an ebook) or Building a Core Membership (if a community site) etc.

If you've completed just the first phase, you don't have a "business", your idea is still at concept stage. Buyers don't want to buy concepts.

Action: If you've moved on to the next phase of the business, you've Added Content / Commissioned Articles, Developed Traffic, Built Some Incoming Links, Done Some Advertising and Marketing etc., but haven't yet monetised the site.

You still don't have a "business"!

The third phase is the most important one and the one that investors want to see: The Money Phase.

If you've arrived at the Money Phase, you've successfully  monetised the site and it is regularly generating revenue in excess of all the costs (even when you subtract a sum for the "nominal" wage you never drew).

This is what interests investors. 

As far as the business investor is concerned any idiot can conceive a plan and buy a domain + template. The tricky bit is converting that into a profitable business.

If you haven't done that conversion investors will conclude, rightly or wrongly, that you're bailing because you've realised this idea is a flop! Investors are smarter than you think.

Worst lines when trying to sell a 1st/2nd phase site:

- The website is ready to be taken to the next level
- The website just needs some marketing
- I don't have the skills to monetise this fantastic business