After a few years of working online I think it is only prudent to have an exit strategy, well it is for me seeing as I want to retire early, or at least have the option to retire when I wish instead of when I have to.
So far I have managed to make money online for which I am grateful and working from home is a blast especially with the summer coming up, can’t complain at all. I have managed to think outside the box and offer products and services and pretty much along the way I have had a basic strategy or plan but nothing that would be classed as a business plan, I think many of us have floated along trying to make the best of what we can with limited means and knowledge, after all how can you have experience of something that has just been invented!
For the most part my plan if it could be called one was along the lines of
1/ Get good rankings
2/ Therefore get lots of traffic
3/ Monetise that traffic through various income streams
4/ Then constantly worry about stability and losing traffic and income!
I am heading towards the stage of really trying to work out my exit strategy, the internet has changed a lot in the last 8 years since I have been dabbling and it will change a hell of a lot in the next decade or so, it will change in ways that I have no control over and although it can be fun trying new ideas and methods I am probably less likely to be successful as a developer in the future, I’m pretty much an online socialphobe (domain available) in that I don’t do twitter, myspace, facebook, linkedin or any of those social sites, possibly because my ‘local offline’ friends don’t use them so I have never had the urge to embrace them and probably won’t for the most part, I like email – it works just fine for me.
So my exit strategy is twofold
1/ Sell my main income site(s) for a lump sum, I have done well to build an income and one that stretches back far enough to have what we would call ‘a good history’ as far as websites go.
2/ After selling up & paying off the mortgage and storing some cash, keep a warchest to further invest in some domains and slowly increase domain leasing to a stable income that keep the house comfortably in what I would class as a retired state with no demand on my time or worries about income, very occasionally selling the odd domain but being a particularly unmotivated seller when the buyers do come and approach me it should make the right ingredients for a good sale price.
If I do sell my main income site and work on domain leasing that would be the perfect scenario for me, holding a well researched and valuable portfolio with some leased out.
The thing about an exit strategy is that it needs to be considered and acted upon well before your ready to sell up, if you heading towards the point that your earnings are good and traffic high with a pretty stable history you need to ensure that if you ever get in a position whereby your considering selling that you can have everything to hand.
Stats – I used to use stats from my host, Matrixstats which I disliked and didn’t trust, I realised 2 years ago that if I ever wanted to sell or even sell advertising I needed consistent and stable stats I could rely on with a good timeline, therefore Google analytics came along at a very good time which I have installed, I now have 2 full years stats using a trusted 3rd party which shows that in the last 12 months I received 8.7 million visitors and the 12 months prior to that was just over 8 million, good strong stats that are instantly verifiable.
Income – When dealing with online sales it is important to use a good shopping cart and backup your data, previous customers details and sales broken down by products, sounds very simple duh… but if you run more than one site it’s easy to collate income, after all it all ends up coming to you, you have to ensure that you can drill down your data and show by site and by product where the income is coming from, again I wasn’t doing this a few years ago, I was letting Worldpay process customer details with forms to jump straight there and collating overall data for my books rather than saving customers details and product details. Two years ago I had a decent shopping cart installed and modified to give me the reporting that I needed so that I could really get a grasp of what was going on.
Tax – I phoned the local tax office to ask about a possible sale and spoke to an adviser who informed me that a sale of my main websites would mean I would be liable to capital gains tax at 10%, also if I sold at the start of the tax year I would not need to report it until the following April with my normal returns and pay that the following January, in effect giving me one and a half years with the money to generate interest to help pay the 10% capital gains bill.
Look for the value in your traffic/site and make sure it is being stored and recorded properly, this covers stats, product order history, images, customer details, newsletter subscribers, subscriptions. All this data can amount to a monetary value by itself in the future so needs to be backed up, split up adn recoreded well. These things didn’t take much time to implement but retrospectively if I hadn’t done them I would be at a loss now when trying to justify an asking price for a sale.
So if you are ever considering an exit strategy make sure you do so long before you need to cash out your chips. Over the last 2 weeks I have been gathering all my stats and data and valuing my main site for a possible sale in the future, I am actually speaking to one group of people who are going through everything right now considering an acquisition and already have my asking price, it has made my life so much easier by having everything in place to show exactly what I have and what it has done, if someone had been interested in buying my sites 2 years ago I’d have been in a bit of a mess.