Prioritizing Quality Content Helped This Website Owner Achieve a 45x Multiple Exit
As an online business owner, you often have to take on a variety of different roles within your business. You’re required to play the part of a customer service agent, a business analyst, a digital marketer, a logistics manager—the list goes on.
With so many balls in the air, it’s easy to lose sight of the basics; the simple ingredients in the recipe for success.
One of these ingredients is well-written content.
Great content is often undervalued, but one seller, who was determined to champion content on their website, discovered just how valuable well-written content really is when the time came to exit their business.
This focused drive to produce informative, accurate articles helped the seller build a million-dollar content site in just three years. On top of that, the seller achieved this without having to do any link building or much SEO!
This incredible business was only on our marketplace for 10 days before being snatched up for a 45x multiple exit and an all-cash sale price of $1,007,000.
Pretty incredible right? I’m sure you’re dying to learn more about this seller’s incredible journey, so let’s dive right in!
Quality Content Is Key
Content site owners can easily get sucked in by the nuances of SEO and Google algorithms and forget about the most important aspect of content sites, which is the content itself.
Optimizing your SEO or building up a great backlink profile may bring people to your site, but well-written content is what keeps them glued to the page and encourages them to return to your site in the future.
This is a concept that SEO expert Doron Wolffberg discusses in-depth during his interview with us on The Opportunity podcast.
According to Doron, Google algorithm updates have placed a bigger emphasis on quality, focused content. This means that even though it may be more expensive to hire specialist content writers, this investment results in content that distinguishes you from your competitors and improves your engagement and conversion rates.
This not only increases the authority of your website but also makes it harder for competitors or AI content to outperform you.
It was a similar focus on quality content that helped our seller create their million-dollar business.
Creating a Business That Will Last
Back in 2018, the seller made the life-changing decision to create an online business. They had previously owned a small niche site and channeled what they had learned from the first site into the new business.
The seller had a lifelong passion for a specific branch of the hobbies niche and decided to create an informational website centered around this activity. It was important to the seller that they chose a topic they were genuinely curious about, as they knew they’d be spending many late nights working on the site and didn’t want to lose interest in it.
As an added bonus, the topic in question was in a broad, evergreen niche and had a large, addressable market.
The business made its money mainly through display advertising, with additional revenue coming in through affiliate marketing.
But it was the content that truly set it apart from other websites in its category.
Building a Million-Dollar Content Site
The seller knew from the get-go that substandard content wouldn’t cut it and made an effort to provide the most accurate information possible. They consulted numerous experts and conducted meticulous research before publishing each article.
The seller, along with another skilled writer, went on to publish over 350 articles, firmly establishing the site as an authority in its category.
This high standard of writing, driven by a genuine desire to help people, resonated with the readers, and the site grew far quicker than the seller anticipated.
The business built up a healthy audience, with 4,800 subscribers signing up for the site’s newsletter. The success of gaining almost 40,000 followers on Pinterest encouraged the seller to start a YouTube channel, which grew to over 4,000 subscribers.
In just three short years, the site was attracting over a million monthly page views and was bringing in an impressive $22,000 in monthly net profit.
The seller was passionate about building this business, but the demands of everyday life were starting to take their toll. Outside of the business, the seller had a demanding day job and was also raising a young family.
Though they were conflicted about selling the business, they recognized that sooner or later something had to give.
Satisfied with the success they had achieved thus far, the seller decided to sell the business.
Our Advisers Lend a Helping Hand
Entering the market as a first-time seller can be pretty intimidating. There are so many moving parts in the sales process, and sellers are never sure what sort of reception their business will receive from potential buyers.
This is where our vetting, sales, and migrations advisers really come into their own.
When sellers submit their businesses to Empire Flippers, our advisers guide them through every step of the process, from vetting all the way to migrations.
The seller had a very specific goal when it came to selling the business—they would not settle for anything less than a million-dollar exit.
With this goal in mind, the seller used our valuation tool to find out how much their business was worth. Though it took a couple of months for the business to reach a $1,000,000 valuation, our dedicated sales advisers stayed in close contact with the seller, advising them on how best to position their business to buyers.
When valuing a content business, we use the following formula to calculate the listing price:
In order to calculate the multiple, we take several things into consideration. We look at things like the earnings history, the business model, growth trends, the age of the business, social media, site traffic, etc.
We sold over 150 content sites in 2020. These sites achieved an average monthly multiple of around 30x–35x.
So, how did the seller achieve such a high multiple? In large part, it was due to the recent rise in aggregator spending power.
How Aggregators Are Changing the Content Game
When aggregators and high-net-worth individuals first turned their attention to online businesses, they focused largely on the Amazon FBA business model. This allowed them to rapidly grow their online empires by simply acquiring established companies instead of having to build them from the ground up.
However, as competition continues to increase within this field, these powerful entities have begun to expand their portfolios and branch out into content sites. They pair content sites with FBA brands in a similar niche and then use the content site to boost brand awareness.
The ripple effect from this shift in focus has caused an increase in the value of content sites.
This change in the content site market, coupled with the seller’s success in scaling their business, meant that we were able to offer the seller a jaw-dropping 55x pricing multiple and a listing price of $1,229,571.
The Seller Cashes In
After a call with a buyer advisor to discuss the sales process, the seller was ready to list their business on our marketplace.
The listing was unlocked by 15 interested buyers, and an offer was accepted by the seller in just 10 days!
When it comes time for a buyer to make an offer on a business, there are many deal structures that can come into play. With businesses over $1,000,000, it is very likely that a buyer will suggest an earnout.
There are a few different types of earnouts, but, at its core, an earnout is where a buyer pays a portion of the business price up front, then pays the remaining balance off over a set period of time.
Most sellers tend to prefer all-cash deals over earnouts, but finding a buyer who is willing to part with over $1,000,000 cash up front has traditionally been quite rare.
Fortunately for the seller, a variety of large brand aggregators regularly browse through our marketplace looking to expand their portfolios. Many of these aggregators have the spending power to purchase high-value businesses without the need for seller financing.
The seller’s business caught the attention of a capital-backed aggregator who, after negotiating the multiple down to 45x, put in an all-cash offer of $1,007,000 for the business.
Thrilled to meet their goal of achieving a million-dollar exit, the seller accepted the deal, stating:
“I’m delighted with the offer, and all cash is a real bonus. [The buyer] seemed like a perfect fit to take the site forward. I’ve compromised on the multiple, but I definitely think it’s a win-win deal.”
You Can Achieve a Life-Changing Exit Too
This seller’s story isn’t a once-in-a-lifetime opportunity that is reserved for an elite few. You can grow your content business to this level too!
Focus on providing your readers with quality content that will keep them coming back for more. If you’re not an expert in your field, hire a specialist writer to produce informative articles for you. This will not only increase engagement and traffic but also help you stay on the good side of those pesky Google algorithm updates.
As this story demonstrated, a lot of long nights and hard work go into building a business from the ground up, but that only makes the success even sweeter.
The good news is that, while building a million-dollar business sure isn’t easy, selling it through our marketplace is simple!
If you’re ready to explore your exit options, simply register an account on our website and book a call with one of our expert sales advisers. You’ll soon be well on your way to reaping the ultimate reward from your online business—a successful exit.