A few weeks ago, I wrote about the differences between blogging to make money and blogging for growth. This article is similar to that one.
As someone who’s worked with close to a hundred profitable blogs, it’s been engrained into my brain that the real profit from growing a blog comes in the exit.
Making a few thousand dollars per month is cool. Making $100,000/month is even cooler.
But you know what’s even cooler? Selling the blog for $5M or even $10M… in cash. One single lump sum payment that lands straight into your bank account. Now that’s cool. That’s life altering.
The problem with YouTube
This got me thinking about professional YouTubers. The majority of professional YouTubers are your normal, everyday people who suddenly grow a large subscriber base and decide to pursue it full time.
They vlog. They talk on camera about their lives. THEY are the BUSINESS. The YouTube channel wouldn’t work without them because THEY are the content.
And that is totally fine. Much like it’s fine to take 90% of your blog’s profits out as personal income.
However, in this case, there’s one big problem…
There’s no sellable asset.
How do you sell a YouTube channel that’s basically revolved around you and your life? How can you exit that business? You are 100% of the content.
You can’t sell a YouTube channel like that.
How to sell a YouTube channel that’s built around a personal brand
Don’t get me wrong. That doesn’t mean these aren’t great businesses. Some YouTubers upload weekly vlogs and clear $1M per year in ad revenue alone. That’s awesome money.
But like blogging, and like any other business, you have to build sellable assets.
If your YouTube channel is a personal brand, you need to take one of two moves:
1. Shift into a media property that isn’t heavily branded around you alone.
2. Create outside businesses and use your YouTube channel to grow them.
Shifting towards a media property
The first option is one I’ve seen many YouTubers take. They slowly hire one or two people to make videos on their channel. Soon, their audience becomes accustomed to seeing new faces on your channel.
This transition makes it easier to sell because the new owners can see that YOU don’t necessarily have to be involved in every single video. Your audience is receptive to new faces and they still stick around.
That gives them the confidence to then take over and hire new staff to create similar videos.
Creating outside businesses
This is even more common than the first option. And it doesn’t really involve selling the actual YouTube channel itself. Instead, you’re creating additional assets.
It’s why so many big YouTubers can create something like a generic cosmetics line that’s basically 100% private labelled, and then grow it into a 6-figure business overnight. They have the audience already, making it very easy (and fast) to send a ton of traffic to a new website.
Considering that online businesses are generally sold for 3x annual profits, they’ve essentially created a multi-six figure business very rapidly doing nothing more than leverage their existing audience.
Which option is better?
I think #2 – creating outside businesses and leveraging your YouTube audience to grow it – is the much better model.
Because you can rinse and repeat over and over again with multiple different businesses.
With any business you start, the most difficult part of growth is building an audience – building traffic, advertising, etc.
But with an engaged YouTube subscriber base, you already have that part covered. You’re able to send traffic to any website you want. Even if it’s the worst product in the world, you can still send traffic to it and get people to check it out. It’s the power of leveraging an engaged audience base.
Of course, you can’t just build low quality products and expect it to sell. If you want to be able to rinse and repeat this model, you need to carefully select which businesses you’ll launch to your audience. Or you’ll end up failing in both businesses – your new business won’t get any traction, and your YouTube channel will quickly lose its reputation and you’ll be deemed a sellout.
Then when should you sell a YouTube channel?
Since building outside businesses is clearly the much better option, when would you want to sell the channel itself?
The answer is: When you’re losing passion for creating YouTube videos. This is more common than you think. YouTube as a career is fun in the beginning. It’s exciting to think that creating videos is paying for your car and maybe even your first class trip overseas.
But when you get to year 3, year 4, year 10 of your YouTube career, you might find that it’s just not fun anymore. You might find yourself dreading going out and shooting videos. You might start to hate the pressure of having to publish content just because your audience is waiting for it.
This is when you should consider selling your channel outright. You can make a lot of money from selling a YouTube channel if it’s a profitable one. It might be a better option to get a large influx of cash, and move onto your next venture.
How much can you sell a YouTube channel for?
Like with all online businesses, YouTube channels are given valuations of around 3x yearly profits. This can vary slightly depending on the size of your audience, your engagement metrics, and the niche of your video content.
But given a 3x yearly multiple, you can sell a YouTube channel for that makes $1000/month for $36,000. You can sell a YouTube channel that makes $10,000/month for $360,000. You can sell a YouTube channel that makes $100,000/month for $3.6M.
Again, you’ll have to consider if it’s the best move to sell the channel, or leverage it to build outside businesses. In most cases, building outside businesses will have higher potential revenue for you.
But really it all comes down to what you want. Do you want to sell your YouTube channel and move onto new things? Or do you still love publishing videos and want to use it to build an empire of businesses?
You have a lot of options once you build an audience. Make your decision wisely.