How do you value a website?

sjr4x4 · #1 (**permalink**) 08-11-11, 03:10 PM

I'm looking at buying an established website, and wondered what the best way was to get an idea of the website value.

Is there a magic number, such as £xyz for every 10,000 monthly visitors, or is it the more traditional 3 x net profit? Or is it just finger in the air and whatever you deem it to be worth!

The sale would be purely for the website, there would be no other factors such as actual company, assets, staff etc.

Before anyone says it, please don't mention one of these rubbish freeware tools that counts links, Alexa and Compete scores, and then shoots out a random price!

Anyone had any experiences valuing websites, good or bad?

tomsk · #2 (**permalink**) 08-11-11, 04:24 PM

A wise man once told me something is worth someone will pay for it, I know that it does not help with a value, but in your mind what is it worth to.

I was on a forum the other day (tut tut) and the guy was selling his website business 50 plus company websites done in the last 18 months on going business great investment etc.

Turnover for the year £10k he had managed to build 50 websites and only turnover £10k in his mind there is a value in my mind he has wasted a year!

So again something is worth what someone will pay.

sjr4x4 · #3 (**permalink**) 09-11-11, 09:50 AM

Quote:

Originally Posted by tomsk

Turnover for the year £10k he had managed to build 50 websites and only turnover £10k in his mind there is a value in my mind he has wasted a year!

lol good point. He would have been better off stacking trollies at his local supermarket!

Guessing there must be some super duper scientific formula somewhere. Was at a solicitors a couple of weeks ago, sorting out wills and things, and one of her questions was "how much is the business valued at?" So I said no idea, and she didn't know either, so we settled on 3 times revenue as a guestimate.

Hmm, in this case suppose it will be down to domain age, traffic, and revenue potential.

ArfanB · #4 (**permalink**) 10-11-11, 05:08 PM

the model over at flippa.com seems to be a years revenue, though if it has a business backing it possibly 18. again depends on the site, how its run, what its costs and revenue is, how much you can improve (ie further investment needed) , accounts reliability, Income sources, traffic sources etc.

JamesK · #5 (**permalink**) 13-11-11, 06:57 PM

Yeah go have a look at Flippa and some of the sales over there, how people are valuing their own site and how people are actually bidding on other sites.

But as Arfan said, normally its 12-18 months revenue gives you a good guideline of how much a website is worth

firstpointfreight · #6 (**permalink**) 14-11-11, 04:45 PM

From what I have seen I echo JamesK around 12-18 months.

I suppose you need to ask yourself what it is worth to you financially? Are you going to start reaping the benefits from day 1 or will you need to invest funds before seeing any ROI?

Always tread with caution and remember, always ask yourself why is this guy happy to sell in the first place?

QMSInternational · #7 (**permalink**) 17-11-11, 03:16 PM

Consider profit margins, time needed to promote the site, how much money needs to be invested so that it is found, is it so big you need staff to manage it?

If the profit margins are small - the time needed to make the business work may not be worth it.

You could use Google Insights for search to see whether there is still a market online for the products or services sold on the site.

sjr4x4 · #8 (**permalink**) 17-11-11, 09:09 PM

All very good points, appreciated, and certainly need factoring in.

It is interesting though, I would have thought somewhere, someone would have come up with a baseline formula, which you could apply when looking at potential opportunities.

Maybe between us all, we need to create one and offer it as a standard to the world

Biz Value = 18 months revenue (-) debt (-) overheads (x) fluffy magic number which includes traffic, exposure, and potential

Peter Birganza · #9 (**permalink**) 22-11-11, 07:14 AM

Quote:

Originally Posted by sjr4x4

Anyone had any experiences valuing websites, good or bad?

By putting quality links and work on it can really promote it in a positive way. There are also may other ways but the most fastest and popular is this one.

sjr4x4 · #10 (**permalink**) 22-11-11, 10:17 AM

Quote:

Originally Posted by Peter Birganza

By putting quality links and work on it can really promote it in a positive way. There are also may other ways but the most fastest and popular is this one.

Don't understand, what relevance has this got to valuing a website?

Thread Tools
Show Printable Version Email this Page
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode

The Following User Says Thank You to ArfanB For This Useful Post:
sjr4x4 (14-11-11)

The Following User Says Thank You to JamesK For This Useful Post:
sjr4x4 (14-11-11)

The Following User Says Thank You to firstpointfreight For This Useful Post:
sjr4x4 (14-11-11)

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)