How to work out a sites worth?

How do you work out, roughly, what a site is worth? And why?

I know its like monthly revenue x [BLANK]

WHy is it done like this?

 

There are loads more factors to a sites worth than just revenue, to name just a few: traffic, quality of traffic, source of earning, conversion rate, pagerank, content.

And then even then it varies, every individual site is different and requires a different approach.

 

It all depends on how much the buyer values each factor of the site. The most popular way i see for people that want quick sales for there site is rev x 10 months minimum.

 

It not only traffic count,there are a lot more of intrinsic of the website aspect that will added more value to the site such as the design/CTR/SEO optimization/quality of the member if your site is forum or depend on user generate content.
Beside that,i will also valued the site based on the domain extension it use such as .com will fetch up more than 50% of the same site using .net domain.

 

see how much your competitors are worth adn how much they get aquired for and compare your numbers with them

 

Where would you find this information though? I doubt they would just tell you the numbers...

 

Well this is the equivalent of the offline business world popular PE (Price Earnings Ratio)
Slight difference is that PE is based on Yearly Earnings or Yearly Profit
while Monthly Rev x is using Monthly Revenue. Online costs are relatively low so most of online revenue will be like not far off from the Earnings.
So while in offline world PE of 10 times or more is common, for small online business (NOT giants like Google) and equivalent PE of more than 1 (i.e. more than 12 months Revenue) is very rare.

 

i always thought 12 months of revenue is what your website is worth in general

 

I think all site worth should focus on the earning and nothing else. My 2cents.

 

I have created a appraisal system that uses the facts to determine a price. I have done quite a bit of testing with it and think that it is the most accurate one out there for what I would pay for a website. Keep in mind, if you aren't making money, your website isn't worth much money.

http://www.priceasite.com

 

first off you need to find a buyer long before you find out how much your website is worth.

Also doing a (rev) x monthly only works if you can show growth throughout the time line your asking for. Only fools would pay (montly revenue) x (x)Months if the revenue is dropping or even holding steady. That in the real world is called a stale business model that won't grow.

Top dollar belongs to you if you can show everything in detail, your business model, time invested to keep revenue on pace, traffic where and how it's gotten, viable domain name, reports on how well you rank in terms of keywords etc.... it's a decent process if you really want to make a larger sale.


I could make a website selling (product x) make $500.00 sales a week then try to sell the site (revenue x 10 months) One thing you would never know is once I pull my own marketing that site would never generate that kind of money again I make a killing and you get stuck with a site that's worthless. That's what people fail to realize and why you need to research a buy very closely.

 

the simple answwer is unless theres something special there its 10 x revenue/month

exlusive features, being high in google etc can push it higher