Pricing a website isn’t as simple as we all would like it to be. Depending on how you decide to value it will determine what it is worth. When you think about it, there are so many types of websites out there so how would they all be able to be priced the same? Some of them are only traffic based and don’t have any major revenue, while others make a great amount of money through sales of products. So to help you understand how to value your website, we are going to go through a few different methods.
Tips for selling & valuing
- Slideshare on valuations
- Article on how to sell your website
- Website with videos, podcasts and blog of buying and selling
- Press Release on valuation
- Case study on million dollar sale
The easiest and most accurate way to get your website valuated is by hiring a professional valuator that has a lot of experience doing this type of thing. There are many different things that valuators will do to come up with an estimated value of your business that you will most likely never do. They look at every aspect of your website and come up with reports to show you exactly how they came up with the figure that they did. These reports come with a lot of information and can even be used in the negotiating stage when dealing with buyers. If the buyer decides they want to try and offer way to little, then you can show them exactly why that offer isn’t reasonable.
One of the most popular ways to get a valuation is to just base it all off of the revenue being received on a monthly or yearly basis. Basically, you will be dividing the monthly profits by the sales price of other website that have sold recently that are similar to yours. Although this may seem easy, it isn’t an exact science and can be pretty deceiving.
So once you have found at least 6 other websites that can be considered similar to your revenue, check how much their sale price was, what their monthly profits were, and what their multiple was. Using this information will give you a much better idea of how much your website is worth based off of revenues only.
This method is for websites that don’t really have much revenue but have a good amount of traffic. Even though he website isn’t actually receiving any revenue, it can still be considered very valuable. The way to do this method is pretty similar to the revenue method. You first have to figure out how much monthly value your website is bringing in.
To do this, you will need to value your traffic and figure out what keywords are bringing in the most traffic. For example, if you have a website that is about book reviews and get 10,000 visitors a month off of the keyword phrase book review, then you can use Google Adsense to figure out how much that is worth. All you have to do is go and check how much it would cost to get a pay-per-click visitor off of Adsense and then multiply it by 10,000. So if your keyword is worth 10 cents a click, then 10,000 visitors would be worth $1000 a month.
Then all you have to do is the same thing you did with the revenue method and average the multiple of other similar sales.
Overall Compare With Similar Websites
Unlike the traffic or revenue methods, comparing with other website sales is pretty cut and dry. You have to find similar websites that were sold that not only had similar monthly revenues but also similar monthly traffic. Then figure out the average and there you have it. Again, all of these methods are subjective because all businesses are different. Some might have advantages that other businesses don’t so you need to price it off of that as well.
There are many other aspects that you could consider, but these 4 methods are the most common to figure out an approximate amount your website is worth. Just remember that if you want a very accurate valuation, to hire someone who has experience in this and to have them do it for you. They will do all the necessary research and consider everything about your business.