When Should I Sell My Online Casino Website and Retire To Las Vegas?.
If you have developed an online casino website and promoted it to the stage
that you feel you have brought it as far as it can go, should you consider
selling up? In fiscal terms perhaps you should be considering what you would do
with the money, would you let it sit in a bank account, would you put it to work
in another venture or perhaps even another casino website? If you would, then
what kind of return on investment could you expect? In a world where venture
backed companies have an exit strategy developed from the outset, should you and
when should it be?
Every business has risk, in the tertiary sector economic conditions are going to
affect you before they affect B2B companies. When you are promoting non
essential products, as you are, economic conditions are going to impact your
company before they affect anyone else. However, unlike public companies,
smaller high growth companies usually are not affected so much by the state of
the market; usually micro issues will impact their bottom line much faster than
it will do for their NASDAQ equivalents. Also, websites often generate wages for
the owner as well as profit, even to the stage that unprofitable websites are
worth running to keep management employed. The point is that many smaller web
based businesses should not look at whether to buy or sell in the same way as a
public company does - they don’t have shareholders to satisfy and they can
afford to consider what they enjoy. A webmaster that lives and breaths poker
might prefer to have a poker based website than a gardening one, even if the
latter delivers more promise to their bottom line.
Let’s consider this as if we were knowledgeable in the real estate market. Would
it be best to leverage our knowledge to buy properties which we then went onto
sell in the coming months after adding value, or would it be best to keep these
properties and earn rent? If we felt we could replicate adding value and had
limited liquidity then certainly the first option would be more advisable, even
though both are profitable. That is why your core considerations should be your
cash flow and your ability to replicate success. If you can’t replicate what you
have done, or you have unlimited cash flow then it is time to consider the
multiple of profit you have been offered. If someone has offered you 5X then
would you be able to get a 20% interest rate in a bank a/c? Not likely. However
on the other hand, how defensible is your business? What does your back-link
profile look like, are you relying on PPC traffic where bid prices could change?
How do you predict the future will affect your casino website? If you are not
sure about when to sell, your answer should always be no, unless…
1. A person is able to add more value to the website, or monetize traffic better
than you are, and this is reflected in the price they have offered.
2. You have plans for rapid expansion or another idea which will yield higher
returns from the same capital that is currently tied up in your business.
3. You wish to retire to Las Vegas.