3 Keys to Buying a Blog

As Ryan mentioned earlier, buying a blog can be a nerve-wracking process if you’re doing it for the first time and especially if you’re strapped for cash and are looking for a ‘good deal’.

The first blog I bought was over-priced and I knew it. I still went ahead though and bought the brand and for the ‘street cred’ I’d get in that niche. This purchase taught me three very valuable lessons about buying blogs:

• Make absolutely certain that you have time to run the new blog or find someone beforehand to run it. I didn’t do either, and as a result that blog was neglected.
• If the blog is not making money, do not spend your savings on it. You should have a definite plan of recouping your investment in a set period of time – don’t jump in with a vague notion of ‘slapping on AdSense and TLA to make some cash’.
• Make sure you have an exit strategy that will allow you to make a profit (after taking out the expenses (including value for time spent on the blog)). If you don’t, then you may have a dead blog or if it’s a big-money purchase, then you’re fucked.

To summarise, you need to focus on Time, Money and the Exits.

If you don’t have the time, don’t jump in.

If the site isn’t making money, don’t pay that much for it.

If you don’t have an exit strategy – good lord, what the hell are you going to do when you have to cash in?

Let’s look at each of these three in more detail.

1. Your Time Is More Valuable Than You Realize

It took me a long time to realise this (no pun intended), and since then I’ve been preaching this to anyone within listening range.

A lot of people think of starting new blogs with the intention of working on it ‘as soon as they have more time’. Similarly, you find bloggers buying blogs for the same purpose.

It’s not worth it. You’re much better off investing your time in one or two blogs in highly-profitable niches and building them up rather than buying 5 blogs and trying to blog on all 5.

I like Ryan’s and Raj’s style of buying blogs – you have a writer lined up beforehand or right around the time you buy the blog so that a) there’s no time lost in transition and b) you don’t need to worry about writing on ‘yet another blog’.

Writers / hired bloggers cost money though, which brings us to the next point.

2. No Money = No Purchase

Make your life easy – if the site’s current revenues are not enough to fund the cost of hiring a blogger, new hosting, new theme design (or whatever extra work you want done on the site), then don’t jump for it. If you can’t take the blog as it is and earn a profit from it, find another target.

Yes, you can always ‘work’ on the blog and raise it’s earnings. But that’s the future and its uncertain. In general though, you want to buy a profitable business – it’s easier to run if it’s bringing in a profit and there’s less stress for you.

Yes, there are exceptions to this rule. You might buy a brand (like I did, like AW did with Threadwatch, or like SPM did with Performancing), or the blog might be ridiculously under-monetized (e.g. a gadget blog with 20k daily uniques and no Chitika / AdSense / Auction Ads on it). Those are exceptions, hard to find and they stay on the market for a very short time.

Most blogs that you’ll see going up for sale fall into two categories – they either lack traffic to earn serious money OR they don’t have direct advertising yet. Both require time to bring in (although depending on your personal experience you may find one or both easy to manage).

And for the sake of your sanity, do not spend money on an asset such as a blog without an exit strategy.

3. What’s Your End Game?

Are you buying a blog to flip it (build and sell it off for a profit in the future), to build a business or to bring in a small but stable stream of income?

The 3 approaches require different amounts of time and financial investments, plus different evaluation techniques.

if you’re buying a blog to flip it or building a business, you’re operating with the intention that you have time and money to invest into growing that blog. In that case, #2 can be relaxed, a bit (but don’t take on a white elephant with the outrageous hope of selling it for a cool mil), however you need to very strict then about #1 (how much time you’re going to spend) and you have to have your targets clearly mapped out and written down. In fact, you should have a complete roadmap for both strategies before you make the purchase. And have a backup plan, just in case.

So if you’re buying to flip, have an alternative plan to build the business in case you’re stuck with it. If you’re buying to build, have a plan to cash out if the time and offer is right (or if you need the money / time).

If you’re buying a turnkey business that just brings in a regular income with minimal maintenance, make sure all your ducks are in line.

What’s Next

I realise that there are several topics discussed here that need to be talked about in more detail – I’ll be covering them in the coming weeks (with help from Ryan, Raj and David, as all 3 of them are more experienced in this area than me). Next up is a discussion on blog valuations, which should go up later this week.

For now, I’d like to hear your experiences on selling / buying blogs and if you have any tips to share, please do so.