Exit strategy - prepare well in advance

Exit strategyAfter 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.jpgStats – 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.jpgIncome – 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.

tax2.jpgTax - 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.

About Scott Jones

Scott hails from the north east of Scotland and started earning online at the end of 2000 building websites for local businesses during which time he won an award from Lord Alan Sugar for Excellence in Enterprise. After having quite a bit of success with domaining Scott mainly runs educational evergreen websites which generate over 3 million visitors per month but is always on the lookout for a fresh thinking out of the box way to turn a buck. Follow on Twitter.


  1. I think it is hard to consider an exit strategy when I’m not even at the point I want to be with my businesses. I’m actually only getting started and considering the end seems to far out in the future.

    I do however agree that in your position its a thing that you will need to plan. As the saying goes: “If you fail to plan, you plan to fail”.

    But personally I’m not there yet :)

  2. Personally I find the whole internet thingumy watsit a blast and couldnt at this stage envisige ever giving it up, even when I’m old and grey. I find the whole business of researching niches and building strong sites to be far more edifying than sitting around being ‘retired’, of course I’m still working towards the ‘giving up the day job dream’ so I’m not in your league Scott. My main focus is to get to where you already are - perhaps then I will start thinking about an exit strategy. Its all about perspective I guess, but I rather think that as long as I have my marbles, I’ll always be working on a website or two.

  3. Are you just looking to sell the websites that require you spend a lot of time managing and maintaining?

    Or are you looking to sell pretty much everything?

    IMO, why sell the stuff that makes you money when you don’t have to do any maintenance work on it?

  4. I have an exit stratergy planned for my main sites in 2-3 years but I reckon by then I’d have something ele on the boil so wouldn’t retire, though being able to is nice.

  5. I hope their is no exit strategy for selfmademinds! :(

    Scott, considering the amount of quality domains you seem to have bought recently I am surprised you are putting together an exit strategy, I thought you were just getting started! :) I know you say you won’t sell everything so I presume domains like tvs.co.uk you would hold because of the potential, I would, especially after buying them so recently.

    Top post btw.

    • I am more likely to buy more domains! :) I enjoy researching and finding good one’s, just bought one this week that I’m waiting to go through so domains are a passion/hobby but they cost more than they earn at present, I’m more refering to my earning sites and at some point selling them.

      • Sounds good, I bet it isn’t as much as a bargain as tvs and economics (its not possible for one man to keep doing so many good deals!!) I personally don’t really enjoy the day-to-day running of a website - much more fun finding and developing - so I see where you are coming from.

        • It cost £400 and is pretty decent and more up and coming computer related so could be good, once the paperwork is done I’ll mention it.

  6. Don’t know how long ago you phoned the tax man but I thought they scraped the 10% Capital Gains rate.

  7. Sent you an emali Rob, also according to HMRC they state:

    “5. An individual will be able to make claims for relief on more than one occasion, up to a lifetime total of £1 million of gains qualifying for relief. ”

    So you can use the £1 million once but it looks like that could be from a couple of sales?

  8. Scott - when trying to sell one of your established sites, what kind of timescale would you estimate to complete the sale, once you’ve agreed a fee with a potential buyer? (this is before they’ve asked you about proving the stats, revenue etc)

    Do you also think that the sale of an established site sale should take longer than just a domain sale?

    • I’m not usually a seller so have little experience there to be honest as far as large website sales go, if I do sell I will detail the timeline and any problems/points of interest but for now someone is looking over the books and stats, may come to nothing. Selling a domain is certianly much quicker - ntohing to quanitfy but ownership there so no income or traffic details, ranking, goodwill etc to take into consideration.

  9. This is an excellent post, one of the best in a while. You’ve got me really thinking ahead now!

    I think I need to start broadening out my domain approach as well, I have number of my eggs in one or two big baskets, and am depending too much on them as continuable revenue.

  10. My personal exit strategy is that as I get sites up to a descent profit center, outsourcing the work so revenue is not dependant on me performing the work. I just act as a project manager/ceo in a sense. I’ve also been documenting every process so when the time comes for me to exit the training materials are already built. What do you think?

  11. I’m certainly not an expert in exit strategies but have been a brick and mortar bus owner and embrace the suggestion that the exit strategy should be part of the business plan - from day 1. For those who can’t imagine ever needing one and have no intention of ever exiting….. all I can say is “You NEVER know”.

    Tari’s last blog post..#1 of 10 Ways to Send Out Cards to Grow Your Own Greeting Card Business

  12. It sounds like you have everything all planned out! I wish I had a huge plan like that. I really have no clue where the next years will take me… I just want to have a nice life and I don’t want to spend it all working my fingers to the bone!

  13. Although I can see value in most of my sites i often struggle to impress this upon others or find those interested in a purcahse!

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