This is a continuation of the blog post series on how to optimize the value of your website. You can find previous posts here (on transferability), here (on valuation formulas), and here (on understanding the marketplace).
This post’s topic will address sustainability, why sustainability is important in the value of your website, what factors buyer’s typically look to when assessing your stability, and what you can do to increase the stability of your web business. Read More
In the first two parts of this series (which can be found here and here) I talked about the marketplace, what it was, why it was important, and then I talked about valuation formulas that are commonly used to determine your website value. If you have not read those, you should go back and read them (particularly the one on valuation formulas).
In the next few posts I am going to look at things that influence your multiplier. The subject of this post is transferability. Read More
At Quiet Light Brokerage, my brokers and I do a lot of valuations. When we run advertising, we can easily pull in 700+ valuation requests in just a few days. Obviously we are not able to speak to everyone that submits a valuation for a variety of reasons, but it is safe to say that we have seen just about every type of site and business model that is on the Internet. Typically we can give a rough valuation after a 10 minute phone call as most businesses fall into the same marketplace valuation (to know why the marketplace is important, check this post here). The reason for this is that the marketplace has a fairly uniform method of valuing web based businesses. The second part of this series will look at the basics of how the marketplace typically values an internet based business.
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Years ago when I had recently started Site-Reference.com, I was approached by someone who asked me if my site was for sale. Like most online business owners, I replied that it might be - for the right price. The person who contacted me then asked me what the right price was. I was left without an answer. If you've ever considered selling your web business, or if you have ever been approached by someone asking if you would like to sell your site, inevitably you start thinking about what it is worth. You may do some searches and find some people who tell you that it is worth 10 times your gross revenue. Others may tell you that the average site goes for 1.5 times your income. Worse yet, you may find an online value calculator that has you input a few pieces of information and in return spits out some exact number (I am not a fan of those online value calculators, but that is the subject of another post).
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Several years ago I had a conversation with a gentleman who told me that he had a revelation. He, like many others, had watched all the real estate flipping shows that air on TLC and HGTV, and like many others, he thought “why not do this with website”? It’s a nice idea – an idea that many people have done quite successfully. But if you come into a website flip with the same rules that you would have in a real estate flip, you’ll quickly get burned.
Below are a few rules that I have observed from successful flips. This is by no means comprehensive, but should give you a better sense for what is involved in a successful website flip. Read More
“Greed is Good”. It’s a phrase that was originally uttered by Ivan Boesky, the famous arbitrager of the 1980’s who was convicted of several crimes along with Mike Milken, and popularized by Gordon Gekko, the Oliver Stone character portrayed by Michael Douglas in the classic film “Wall Street”.
I sometimes hear the phrase repeated ambitious business junkies (you know the type – the one’s that will end up driving a BMW with a bluetooth headset implanted in their ear) as a mantra for how they do business. They revel in the idea of the savvy, successful dealer who gets what he wants and leaves others in his wake on the way to unbound success. The phrase speaks of deal making as a type of game which pits you against everybody else. Subscribers to this phrase often quote from “The Art of War”. Read More
What would you do if someone randomly approached you today with a check for $100,000 to take over your best website? What if that check was $500,000? What if it was $10mm?
I do a lot of website valuations. In an average month I can do upwards of 500 or more valuations if we are making a push for new clients. In those valuations, I talk to plenty of business owners about what their site is worth in terms of the marketplace – but ultimately a website’s worth comes down to two factors: what someone is willing to pay for your site and what you are willing to let it go for. Read More
