What would you say its worth?

[leehack]

Just a hypothetical question regarding the sale of a website and what they are worth. I realise it can't be exact or possibly even accurate, just interested to see what people think the following would be worth: (i have nothing for sale or gauging anything like that just interested on this point)

• 3 year old Website
• Ranked very high in all search engines on many phrases
• 700 unique visitors a day
• Turnover of around 70k per year (6k per month)
• Actual annual profit from site around 22k

Topped out in its marketplace, ranked very highly, good traffic, good sales, just sit back and let it run itself basically.

What would you say something like that is worth?

I think i may be over exaggerating what this kind of site is worth, just be nice to see what others think.

Thanks to anyone who responds.

[fleetwood]

Assuming there is no competitive advantage eg patented product, high cost entry point etc, I would suggest the MAXIMUM value would be net profit multiplied by number of years to reach this level (3) = £66k.

This is based on - it would take me 3 years to reach this level of trade myself, so lost revenue in this time is 3 x £22k.

In practice, I wouldn't expect to realise anything like this sum.

[fleetwood]

A second valuation would go along the lines of:

developer time plus goodwill in the name (think - how much would you pay for this name if you didn't already own it) plus goodwill in the site itself (how much would YOU pay for it, rather than do it yourself)?

[Duncan Rounding]

I think it's worth very little. A website can only be worth what you believe it can deliver in the future. The real value lies primarily in the stock and assets and then secondly in the goodwill towards 'possible' future sales.

[Mike Hughes]

We've had this discussion before.

If the 22K profit is there because you don't pay yourself a salary then the actual profit (once salaries are taken in account) is about zero.

If the 22K profit is after paying someone a salary to update the website, package and ship parcels, place stock orders, answer the phone etc then it is a real profit.

In the first case the value of the website is minimal. In the second case the website could be quite valuable.

Which case are we talking about?

Mike

[buspassjohn]

Is that gross or net profit, looks like gross if it's Vatable, in which case there is not much room for net profit.

[leehack]

The net profit would be after all costs have been paid for, except vat. It would be a single man business, so you do all the work and you keep all the profit.

Basically it would be 3 hours work each day to keep it running, from which you would make 22k profit less the vat.

Do you think that websites only have value if tagged onto a business and sold collectively?

My main question is really pointing at the fact that you can have a thriving website, but it ain't worth a lot unless you keep it. If i was looking to buy something like this, i would want my money back within 2 years, after that i'm into profit from the transaction and if i can have 3 or 4 like that all doing me 20k ish per year i would be happy. To me as long as the market had longevity, i would pay 2 years net profit for it.

[jont]

A major issue is in the products you are selling - would the new owners have the same relationship / deal with the suppliers.

Would the new owners be as literate with Actinic (assuming an Actinic store) as you are to tweak and modify to keep the top positions alive.

The value is increased if being sold to an existing B&M company who have no or very poor web presence (assuming a generic URL).

Putting a figure on it is nigh on impossible (especially as the forum has very little info) but based on the above assuming continuity of supply lines and starting as a new venture I would certainly pay no more than £5000 for it (site, software, existing customer details, supplier info etc).

This would be worth the risk and is not going to scare people away (also possible to attract those that could operate it as a "hobby site" if they have partners earning the money) ... there are no guarantees you would not start a new site taking the customers and suppliers with you

[chris ashdown]

As a company purchasing it with 25% net profit on sales but no profit after wages are paid, then £5-10,000 would seem a reasonable price even more if it fitted in with a b&M company

For a personal purchase then even though we have had this disagreement with Mike before, you are buying a company which will pay you your wages of £20,000 in its first year,so if you paid £20,000 for the company you would get your money back (agreed after working the year for zero) in a year but still have all the assets, which seems very low, if you put the money in a bank account what would it earn you?

I think most franchised operations would be looking at a value of about £40,000 plus for a similar type of operation