How much is my website worth?
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Selling your website is part of the circle of life. Eventually you will get bored and want to change, or cash out while you can and retire to your garage full of books. I hope to teach you some tips on maximising the value of your website as well as outline the process behind selling a website.
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- What goes into a website valuation?
- How much is my website worth?
- What can make my website worth more?
- Potential Risks to Buyers
- Analytics Data
- Revenue Sources
- Time Required
- Extra Marketing Channels
- Life Time Customer Value
- Legal Issues and Reputation
- Hand Over Documents or Training
- What are good reasons to sell a website?
- Are online website valuation calculators accurate?
- What are buyers looking for?
- What should I prepare before I sell my website?
- Is there a best time to sell a website?
- What kind of websites are worth the most?
- What happens after I sell?
- What if I can’t find a buyer or I don’t sell?
- Where can I sell my website?
For all internet marketers, the eventual question they start to ask is “how much is my website worth?”.
The short answer is it’s worth as much as someone would pay for it. There are so many factors in a question like this, some of those could be:
- How much traffic do you get?
- Marketing strategy
- Domain history and authority
- Monetisation method, as well as profit/loss
- Website age
- What platform is the site built on (can it be updated, is it technologically sound or does it need to be rebuilt?)
There are so many points that potential buyers will look at, and the truth is websites are only worth what a buyer will pay.
For example, if you have built an AdSense blog and you’re no longer interested in continuing the project, that site is going to be far more valuable than an affiliate website where the main offer it used to promote just ended or shut down.
We are going to look at this question from the perspective of sellers as well as buyers out there. We are also going to look at what sellers can do to make their websites more attractive to buyers as well as outline what buyers should be looking at when buying websites.
There are no real hard and fast guides to this, it’s a tricky subject to tackle. There is no real way to calculate or industry standard for working out how much your website is worth.
What goes into a website valuation?
It really depends on what the buyer is going to try and do with the website they are trying to buy. Some of the simpler valuations and transactions are people buying websites within their niche based on authority.
Just as a SEO would build a PBN, there are people that buy lots of smaller websites to use them for a similar purpose. They want to create a network of websites and really lock in a bit of security for their main website in case things failed or went wrong in the future.
Some people buy websites because they want to generate income from the site, increase its traffic or sales and then sell it again for a profit.
Some people buy websites as a long-term investment. It sometimes makes sense to buy existing web properties for the brand or the content they already have.
What the buyer is looking to achieve will influence how much they are willing to spend. A guy looking to buy as many DA30+ domains as they can will see your sites worth to be less than someone who wants to come along, continue development and grow the company for the next 5-10 years. Their objectives are very different.
How much is my website worth?
There’s a lot of information out there which may or may not be relevant to you, but if you’re looking at a guide to go from 2-5x annual net profit is a decent place to start.
You need to go through the last 24-36 months of your business/website earnings and work out profit and loss data for each of these months. You then need to pull what’s called “seller discretionary income” which is your net profit with non-essential costs added back to the bottom line.
For example, you have a website that makes $5000 per month. Your total costs are $3000 per month, leaving a profit of $2000.
However, included in your costs is a company car that costs you $400 a month and $700/month rental on office space which you splashed out on because it seemed like a good idea at the time. You also like to spend $80 a month on your office coffee machine.
These are things which are not needed to run your website, but when these costs are added back on your profit becomes $3180 per month instead of $2000.
Some websites will be worth more than the 5x multiple, some won’t be worth anything. Below is a graphic which may help you understand some of the impact various aspects of your website will have on its value.
The more you have that buyers want to see, the more valuable the website is.
A good way to get an idea of website value is to check out some website marketplaces and find similar websites to yours (in terms of monetisation strategies) and monitor how much they are selling for. Work out their multiple and apply it to your website.
Another method is to contact a website broker who specialises in connecting buyers and sellers. They will often give you a rough idea on the value of your website for free. Be careful though, many will over inflate this value to try and get your business.
What can make my website worth more?
If you’re planning on exiting your project and cashing out, working towards increasing the value of your website makes perfect sense. There are several strategies and things you can look at which will help.
The first step is calculating the value of your website in its current form. Before you begin investing time and effort into improving a valuation it is best to work out where you stand.
During this process you need to go over everything with a fine-tooth coombe. Some of the points you will look at will be the following.
There are two main points you need to look at with traffic, trends and diversification.
Buyers will want to see that your website is either stable or growing over a long period of time, they also want to see that your traffic is coming from multiple sources. If 80% of your traffic is coming from Google that’s a risk, you’re 1 potential update away from losing 80% of your traffic.
The best-case scenario will see your site growing over a period in a sustainable way, with traffic coming from multiple sources. If you can achieve this then your value will go up.
Potential Risks to Buyers
If your website is a ticking time bomb until it all comes crashing down, you’re going to want to fix this.
A common example of this can be your backlink strategy. If you’re website is supported by a large blog network your website is going to be risking a penalty. It might be worth removing these links where you can and building guest post links instead which are white hat and far less risk.
Another thing worth looking at is the niche you’re in. If you’re selling Vapes/E-Cigs what is going to happen in this industry over the next 5 years? It’s entirely possible that new regulation could be enforced, and this prohibits you selling these online, do you have a back up plan for cases like this?
Can you demonstrate to buyers that all the claims you make such as traffic and revenue are accurate and true? If you’re not running a reputable analytics software (like Adobe’s or Google analytics) which is set up correctly then people might not believe the data you tell them.
It’s unlikely any reputable broke would even touch you without this set up.
Buyers will want to see how your website makes money.
The more stable and diversified your monetisation method is, the more people will be willing to pay for your site. Just like traffic you don’t want to put all your eggs in one basket.
If you’re selling products, it’s worth looking at your niche/market at a whole. Selling Pokemon Go t-shirts and related goods in 2019 is probably not the smartest thing to do. Can you add new monetisation methods or new games to your website?
You also have this problem with affiliate sites. If you’re making money from a network that no one had heard of it may be a risk for a buyer. What happens if the network disappears? Can you replace or add additional affiliate offers from more popular networks?
If you’re selling a lead gen website but you don’t have solid contracts in place with buyers, you’re also potentially going to scare buyers away. With no obligation to buy your leads in the future how can your websites income be predictable or sustainable?
If your website requires lots of time and attention or members of staff this is going to hurt your valuation. Sites that require minimal work and more “automated income” opportunities are far more popular.
If members of staff are required how is this going to work? Do they want to work for a new boss? What if the buyer loses them early on? Are they highly skilled and hard to replace or could the buyer find replacements easily?
Setting up training documents and defined job roles for staff members you have is important. You will need to be able to demonstrate your operation to a buyer so they can see what is going on.
This will depend on your situation entirely.
If you’re running a WordPress (or other respected platform) for software, it does everything it needs to, you can update it without issues, it runs popular/well respected plugins and it loads fast and looks good then you’re onto a winner.
If you’re selling a SaaS for example which was custom coded, the admin panel is a mess which requires you to do direct MySQL commands on the database, it has 27 required libraries which you don’t really control with no guarantees they are going to be updated 3 years from now then it’s quite obvious you have gaping huge holes you probably want to patch to maximise your value.
If you’re website has gaps the buyers need to fill such as programming knowledge it could put some people off. If they are just buying a run of the mill WordPress site that just works, then it’s a lot more secure and easy to manage.
Think about your tech stack. If you’re running a weird outdated CMS like SitePoint or Joomla, you might want to consider a migration to another platform before you go with a sale to improve valuations and make things look far more attractive to buyers.
Extra Marketing Channels
If you have built up decent and active social media accounts (and/or) email lists this is going to help you hugely. If you can demonstrate their effectiveness by showing that they send traffic to your website or buy your product this is going to help in a huge way.
Life Time Customer Value
Depending on how your website makes money, returning customers or subscription services can be a HUGE asset to a website looking for an increased valuation. It’s far easier to convert a customer twice than find two customers online, anyone with any experience in marketing knows this and it’s why people put so much time and effort into mailing lists and social profiles.
If you can show that a decent portion of your audience not only return to your website but buy form you repeatedly you’re going to look a whole lot more attractive than a website that converts a user and never sees them again.
Its why SaaS businesses sell for huge multiples. If you can say “We have XXX users who pay $YY a month and our average subscription length is ZZ months.” You’re going to have buyers lining up around the block.
If you have built your brand around a term that has no copyright, trademarks or real protection from people stealing your corporate identity this is going to harm your valuations. If you’re serious about the website/business, go out and get a trademark and set up proper legal protection for your brand. This is going to make you far more attractive to buyers.
Legal Issues and Reputation
This is something that ties into branding. If your website has a history of being sued by people or when you research your website on review sites you find 1 star reviews, this looks bad.
Looking at the processes in how you operate and fixing these reputation issues before you sell will help you find buyers far more readily. No one wants to pay money to take on a website that lands the owner in court every 6 months.
Hand Over Documents or Training
It’s common for buyers to stipulate current staff and owners of websites that when buying the website, they must train the new owner(s) in how to run the business. This is more common for service businesses.
Think about all your processes, write things down, build flow charts and support manuals. Make the handover process as easy as possible for your buyer. Offer them 40 hours of support they can use in the first month after transfer in support. This makes you look far more professional to buyers and will help ease any concerns they have in continuing the websites success.
What are good reasons to sell a website?
There’s a huge number of reasons to sell your website and if you’re in a position where you have reached that point reading this looking for reasons to sell is silly.
- The seller has other obligations and can no longer dedicate time to their website.
- The seller wants to retire.
- The seller wants to work in other areas or is no longer interested in this project.
- The seller wants to raise money and go do something else.
- The seller feels they have taken the website as far as they can take it.
Are online website valuation calculators accurate?
No. From what I see they simply pick a number out of the air and the drive you to some sort of lead gen to try and become your broker or something. There are too many factors that go into calculations like this that can be done from some mystery equation and an Alexa score.
What are buyers looking for?
Buyers are usually looking for opportunities to expand their current businesses or find new opportunities to make money online.
If your website has a history of making money, shows good growth in a market that is pretty safe with no risks then buyers are probably going to be interested.
What should I prepare before I sell my website?
Before listing the site for sale it’s best that you build out and prepare the following:
- Financial accounts for the website, dating back as far as you can.
- Access to Google analytics (or alternatives).
Depending how you sell the website (online marketplace, broker, or to someone you already know) other information may need to be collated and put together.
It may also be worth hiring a copywriter for the listing. A well structured sales listing that outlines where the site currently is and how it operates will give buyers everything they need.
Is there a best time to sell a website?
To get the highest price for your website I recommend selling your website after a sustained period of growth (minimum 6 months). If you’re selling your site when it’s in decline or if you are doing a bad job of running the website (having lost interest in it or whatever) you’re going to be selling for pennies on the dollar.
Get your ideas together, turn it around and get out.
Websites that are stable but show little or no growth are also fine to sell. If you can show a history of stable income from the website, you should have no issues finding interested parties. These websites are often sought after by flippers who want to improve the value of the website and then sell it again. They are looking for websites where they can make quick improvements to growth and profitability and then get out again, but of course it’s better to do this yourself and then sell for the higher price if you can.
What kind of websites are worth the most?
There isn’t a hard answer for this. A website that has the biggest numbers, lowest risk and is sustainable will result in the highest price.
You will find affiliate websites that have sold for millions, forums/communities have also sold for high amounts and so have all sorts of websites over the years. There doesn’t really seem to be a pattern to it that you can predict and build from, it’s all about the numbers.
What happens after I sell?
Depending on how you exactly found the buyer you will probably want to put together a sales agreement which outlines what is included in the sale, how much the sale is for, payment terms and deadlines.
You should probably also consider signing a non-compete agreement, promising the buyer you won’t operate a website in that niche again. This is common and usually limited by time.
The buyer may also request a set number of hours or days where they can request support from you, or you can negotiate a deal consulting for them for an agreed amount in advance.
What if I can’t find a buyer or I don’t sell?
Work out why people were not interested and try again. It could be any number of reasons from your price being too high to something fundamentally wrong with the website.
The website you’re selling on might be crap also. If you’re trying to sell your 6-figure SaaS company on a forum where everyone else is selling $1000-$5000 amazon sites then you’re not putting yourself in front of the right audience. Try other marketplaces or contact a broker.
Where can I sell my website?
There’s several places you can list your websites, or search for listings to steal ideas from. Your main options are:
I’ve used Flippa to buy and sell websites and always found them very good to deal with, however a recent redesign did make it much harder to buy on there. Empire Flippers seem to also have a good reputation.
If you are a member of an internet marketing forum or webmasters forum you may find they have a board for selling websites. Keep in mind it’s unlikely that the forum will provide any kind of real support or escrow service, you may want to investigate that before you get to the point where you need one.
There are many brokers that deal with website sales. They usually charge a commission fee on the sale price so keep in mind it’s in their interest to find a buyer as soon as possible (which might be a good thing for you). You can find brokers through search engines, speak to a few of them and see how comfortable you feel with them.
Keep in mind that any of these options could work for you, but it’s best to list your website with other similar websites. Be honest with what you have, if you’re looking to offload some old Amazon sites for $1000’s posting on forums or marketplaces might suit you far better than a broker who is probably more experienced in dealing with higher ticket stuff.
Some other content you may like:
> Is there a best time to sell a website?
Sir, I can do you a nice SEO.
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