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How do you work out website worth?

Discussion in 'General Business' started by Joseph_F, May 7, 2014.

  1. #1
    There are so many of these website calculator thingies, but to be honest they all seem to be just guessing! How do you work out how much your web property is really worth?
    SEMrush
     
    Joseph_F, May 7, 2014 IP
    SEMrush
  2. digitalpoint

    digitalpoint Overlord of no one Staff

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    #2
    They are all guessing... there is no calculation that will be accurate across the board.
     
    digitalpoint, May 7, 2014 IP
  3. qwikad.com

    qwikad.com Illustrious Member Affiliate Manager

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    #3
    It's not easy to estimate a website's worth anymore, since Google has been demoting some websites and pushing up the others.

    You can't rely on the estimated website's earnings either since, sometimes, it takes up to 6 mo (and even to a year!) for some of those things to get updated.

    When it comes to buying a website, you will have to convince the seller to reveal the actual earnings of the website, if you don't want to get duped. Whatever a 1-year revenue of that website is that would be the pay-now (or immediate investment) value of that website.

    It's a bit easier when it comes to purchasing a domain name since you can get more or less accurate estimates:

    For PR4 domain name sale, expect around $1000

    For PR3 domain name sale, expect around $500

    Less than that PR is kind of worthless to even consider buying.
     
    qwikad.com, May 7, 2014 IP
    jrbiz likes this.
  4. jrbiz

    jrbiz Acclaimed Member

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    #4
    Qwikad has it right. I would add that the 1-year annual revenue target for a selling price is accurate if the website is profitable or at least break even. What I mean is that if a website brought in $100K in annual revenues, but spent $200K to do it, it is not much of a business. Sometimes, buyers prefer 10-12x annual profits instead of 1x annual revenues.

    The real trick, of course, is to be sure that you are working with actual numbers. It is really easy to dummy up a ledger/balance sheet and make it look legitimate when it is pure fantasy. The only way to be sure is to look at an audited report (that you receive from the auditor, not one photo-shopped by the seller) or actual tax returns that have not been photo-shopped. This type of approach is especially important if the transaction is taking place across country lines as you will likely have very little legal recourse if you discover, after the fact, that you have been swindled.
     
    jrbiz, May 7, 2014 IP
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  5. Media_Challenge

    Media_Challenge Member

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    #5
    It's difficult to know how much a site is worth as there are so many things taken into account.

    Try this site out if you want to have a rough estimate

    http://www.evaluateanywebsite.com
     
    Media_Challenge, May 7, 2014 IP
  6. Joseph_F

    Joseph_F Active Member

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    #6
    Thanks for this. Of course this would surely all change should "perceived marketable value" be added into the equation. I have a very marketable domain name you see, and I'm looking at selling it, based on the name alone where possible. Several marketing consultants I've spoken to have said and I quote "That's a doozy", "You have a gem there", and "if you were selling this as a new car, it would be called cherry". Now, I'm assuming that last one is a good thing when taken in context, although I'd never heard that before lol

    That said, thanks for the hints guys, much appreciated!
     
    Joseph_F, May 7, 2014 IP
  7. JackSeal

    JackSeal Greenhorn

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    #7
    I've had my site valued anywhere between $300 to $21,000, so those websites are definitely just guessing.
     
    JackSeal, May 9, 2014 IP