[CreditCrunch]

Wow, I have not posted here for a while, what happened to the black layout?
The new look is nice and fresh.

I have a question about website valuation, what do you think of the following method.

My website has really rocketed, I have a revenue coming in monthly equivalent to having 25,000 pounds in a savings account, if I had 25,000 in a bank I would be getting my revenue amount as payment each month.

6 months ago I was getting the equivalent of the interest on a 3000 account balance, which is great growth since.

In my opinion, in terms of buying future growth prospects and having a return equivalent to a savings account I could ask for 25,000 right now?

I would need 25,000 in the bank just to get the same monthly returns, I would only accept at this moment 25,000.

[bcmtouring]

I don’t think any one would actually pay you that high, unless you are good at marketing and the buyer is a large corporation. Majority of the websites are sold for 12-36month revenue and in case of an extremely brand able domain, perceived value of the domain and 12-36month revenue.

[CreditCrunch]

Originally Posted by bcmtouring

I don’t think any one would actually pay you that high, unless you are good at marketing and the buyer is a large corporation. Majority of the websites are sold for 12-36month revenue and in case of an extremely brand able domain, perceived value of the domain and 12-36month revenue.

Assuming you're not desperate for money? Who in their right mind
would give away an asset for less than its interest earning value?

This should be the basic valuing tool.

[bcmtouring]

In 99.999 percent of the cases, you can not expect to sell a website at that level!

Why?

Tomorrow Google and other search engines decide to devalue your site and stop sending traffic, what happens then?

What is in today would be yesterday’s news tomorrow, what promises/guaranties can you give that this wouldn’t happen to your websites?

Any one who is looking to buy a website/forum is making an investment and would ultimately like to see them self break even in a couple of years. Let’s assume that your bank gives you 10% interest per year on deposit, so if your website continues to provide same level of income, the company would break even in 10 years.

Of course some one who is interested in buying a website would surely be looking at expanding it and increasing the income, though there is no guaranty that he/she would achieve that. Also unlike the brick and mortar companies, where their properties/equipments and other assets can be sold off in case of a loss, on a website you can’t really do that.

So unless that website is really unique (hotmail/Youtube) or owns some serious intellectual property, don’t expect to sell it at 100+ month revenue.

Of course there are always exception, but those a few and far between.

[Exochat]

Whatever you make in a year.... times it by 2 to 3, and that is how much your web business is worth.

So for example, if your bringing in about $1000 a year.... then your website is worth between $2000 - $3000 to an interested party.

The reason being that nobody will buy a business that is going to take longer than 3 years to make back what they invested, and to buy your website for $25,000 they are going to have to be making around $10,000 a year with it to make their money back within 2 or 3 years.

Your method of what is worth is the exact same method of why its NOT WORTH buying your site. If your expecting to get $25,000 for a site that makes that enough revenue as you would earn if you lived on the interest.... then why would a company buy your site when they can stick the $25,000 asking price in their own bank and make the exact same revenue on their own savings interest without the hassle of running a website and all relevant costs!

[mh0825]

What's the website?

I would say you could extend to 4 or 5 years when doing the value depending on the growth potential and the type of site.

[babadorie]

Are U talking about 25,000 pounds sterling?