For a buyer or seller, determining the value of his or her website and online business is a very difficult task. The owner can try some calculations to figure out the value themselves. However when you try to figure out the value it isn’t an easy task. The questions remain, how do you find the value of an existing business?
So here are some tips on how you can successfully value and sell your website.
This method uses the sales figure as a way to value the business. There are business specific multipliers that you can use to multiply with the annual sales figure that can get you to a selling price.
Profit basis or cash flow:
In this method the sale price of the business can be found by how the business can generate a stream of cash flow or profit. Projecting the revenue over 5 years or longer a business evaluator can use this figure to find the net worth of the business. Interest rates will also be a part of this because the profits are projected.
Most buyers consider the net revenue made by the website annually plus some percentage higher than this amount. At the core of the valuation process, the seller needs to determine the net revenue of the website. To arrive at the net profit of the online business requires subtracting all the expenses incurred in the course of running the business (like hosting, marketing, banners, affiliation system, etc.) from the total revenues made.
It is recommended that this calculation is based on a 12-month period. After determining the net revenue per year, the seller may select a multiplier value. For well-established websites, the value may be between 1.5x to 3x. Suppose for example a website’s annual net revenue amounts to $50,000; a buyer may multiply with 2x and give an offer of $100,000 as the buying price for the online business. In addition there are several other issues that the buyer may consider such as any risks that the website maybe facing. In order to ascertain the risks faced by a website, a number of factors are considered such as: increasing growth, stable incomes, automated system, traffic streams and quality, diversified revenue streams.
Generally speaking, there are many different ways in which online businesses can be valued. For some businesses, the assets the websites own such as a rich customer list (database) may be appealing to potential buyers who may have innovative ways of using this asset, and therefore may value the website based on these assets. Other buyers could employ a comparable sales method to value the website or they should consider the revenues of the website and identify a multiple based on strengths and weaknesses of the website.
Here are some of the bases when pricing them:
– Sales and Profit numbers and trends
– Traffic numbers and trends
– Age of the business
– Domain name value
– Industry sector trends and outlook
– Business growth potential
– Proprietary or non-proprietary products
– Unique content
– Inventory count (if applicable)
– Advertising methods and costs
– Personnel expertise needed to operate the business
– Seller financing
– Non-compete terms
For those who think that you cannot make money online or much money from selling websites, here is a list of websites that where successfully sold and for a large sum of value:
The Top 20 Websites That Sold
Bought by Microsoft for $6,333,000,000
Bought by Yahoo! for $5,700,000,000
Bought by Yahoo! for $3,600,000,000
Bought by Google for $1,650,000,000
5. Marketing Yahoo!
Bought by Yahoo! for $1,630,000,000
Bought by AOL for $850,000,000
7. Tell Me
Bought by Microsoft for $800,000,000
8. Club Penguin
Bought by Disney for $700,000,000
9. Right Media
Bought by Yahoo! for $680,000,000
10. Real Media 24/7
Bought by WPP for $649,000,000
Bought by Google for $625,000,000
Bought by News Corp for $580,000,000
13. Adult Friend Finder
Bought by Penthouse Media Group for $500,000,000
14. Mezi Media
Bought by ValueClick for $352,000,000
Bought by Yahoo! for $350,000,000
Bought by R.H. Donnelley for $345,000,000
17. Blue Lithium
Bought by Yahoo! for $300,000,000
Bought by Amazon for $300,000,000
19. Last FM
Bought by CBS for $280,000,000
Bought by AOL for $275,000,000
After you have determined the value of your online business, you may want to know “how can I sell my website or online business?”
It’s important to find a reputable company that is professional.
BizBroker24, an online website broker & E-Business Mergers & Acquisitions company is now ready to assist people who want to sell and buy website online.
You can contact BizBroker24 for a free valuation.
8 Actionable Ways to Get Your Startup’s First 100 Customers
What’s the one thing that every business wants? Is it money, fame, or endless resources? The answer is quite simple—customers. Having customers is the sure-shot way of ensuring that your business stays afloat in the long run. No matter how good your product or services are, without people buying what you sell, you won’t reach anywhere. However, establishing a customer base is one of the most challenging things a business has to do, especially if you are just starting. (more…)
15 Mistakes to Avoid When Starting a Business in 2021
‘Learn from the mistakes of others, you cannot live long enough to make them all.’ These famous words from Eleanor Roosevelt stand more accurate than ever in the business world today. Starting a business is challenging, and making mistakes even before starting can sabotage your entire venture. The best way to ensure your new business’s success is to plan each step carefully to prevent falling into obvious traps. (more…)
5 Women Who Revolutionized Tech and Made Millions
The Truth About Marketing Every First Time Founder Should Know
While starting your own business is an exhilarating experience, many start-up founders struggle with successful marketing more than any other area of business. So if you’re thinking about starting a business, here are some of the key things you need to know about marketing before you take the plunge. (more…)
62 Powerful Anthony Hopkins Quotes To Get You Thinking
How to Organize Your Digital Space for the New Year
32 Inspirational Ben Affleck Quotes On Success
52 Motivational Tom Hiddleston Quotes To Live By
47 Inspirational Scarlett Johansson Quotes On Success
55 Inspirational Quotes That Will Change Your Life
(Images) 52 Motivational Picture Quotes For An Epic Year Of Success
30 Famous Quotes That Will Inspire Success In You
40 Rare Motivational and Inspirational Picture Quotes
72 Positive Thinking Quotes For More Inner Strength & Growth
3 Prince EA Videos To Change Humanities Path To Greatness
(Video) What Is Success? An Entrepreneurial Story To Inspire You
(Inspirational Video) What If Today You Knew You Were Going To Take Your Last Breath?
How To Make Enough Money From A Blog To Quit Your Job – Kate McKibbin
How Finding Your Passion And Becoming An Entrepreneur Can Lead To Happiness – Chiquita Searle
Life3 weeks ago
5 Things You Should Do Differently in the New Year
Success Advice3 weeks ago
7 Ways To Write New Years Resolutions And Stick To Them
Life2 weeks ago
The Only 5 Tips You Need to Live a Better & Struggle-Free Life in 2022
Life2 weeks ago
6 Simple Ways to Practice Self-Care More in 2022
Life2 weeks ago
5 Ways to Ditch the Resolution in 2022 and Create the Solution
Quotes2 weeks ago
The 50 Unforgettable Betty White Quotes For Inspiration
Quotes4 weeks ago
237 Powerful Jordan Peterson Quotes You MUST Read
Success Advice3 weeks ago
How to Help Your Child Succeed in Life: 7 Tips From a Psychologist