I know someone who is in need of quick money right now and he is thinking about selling a website that generates around 500-600usd/month in profits after all fees are paid. It is a webhosting site. Each year the customers pay for their account for 12 month advance. It is growing and in this pace a year from now it will probably earn almost twice of what it is doing today. What do you guys think is a good price for this site? Would be interesting to hear your opinions.
Those are all decent answers, but if you have ever done business with a Business Broker, then you will know how to quickly value a site based on Yearly profit. Brokers use last year's net profit times 2.5-3.0. This means if you take the avg of $550/mo. Multiply x 12 months = $6600. Take this figure and multiply times the ratio of 2.5 =$16,500. On the high end, you can multiply by 3.0 = $19,800. The site is worth $16k-20k. A broker could easily get this amount. If you pay less than this, you got a great deal. More is way too much. BR
hmmm....in my opinion, I think he should keep the site and build on it. i mean $500 is not that much profit for a site, but it does have potential to make a lot more if your friend boosts up his marketing efforts. He can defiantely pull in about $2000-$10000 a month easily if he knows how to market right. What is even better is that this semi-passive income (depending on how long the person keeps their membership). I say he should keep it and market it more
yeah I agree, If it Generates like $600/Month But yeah I personally think it will be a good investment.
Very good investment. If you are getting fair price buy it buddy. But be careful while doing transiction.
Just make sure you have a contract in place so you don't get caught out or spend years waiting to get your money back.
Two or three thousand is good for a hosting site with that income if he is looking for quick sale. And yes, escrow is the way to go, but if you are friends with him and trust him save money by not using it.
Brokers would be pretty dumb if they did that. Multiples vary widely depending on the sector and type of site. All these posts about fixed formulae like 6x and 2.5x are rubbish. There is no such thing as a fixed rate. A site gets only what the highest bidding buyer is willing to pay. And that varies widely from 1x to 100x to infinity (for sites making $0 in profit). To see what your type of site typically sells for you could use this current prices valuation tool.
I wouldnt mind investing in it myself, you can make a bomb from web hosting sites. with a little more promotion he could double the income of that site imo.
You don't usually need a broker. There are lots of places you can list your site for sale (or find sites to buy) without using a broker. It takes no qualifications to be a broker and any fool can setup a site and call himself a broker (choose carefully). Proper, registered brokers usually won't deal with anything they believe to be below a certain value - usually about $100K.
HI I would like to see the url... and I will give you via PM my thoughts on what it is worth, my opinion only.. Thx Tom
I had a site that was making about £150 a month sold it for about £2000 so i'd say at least 10 times the monthly income is a good value
Auto, I don't think you mentioned if you are going to be doing support for the site? Is is completely passive? To me this are some questions he need to answer before you worry about price.
most people sales their site 10 X their profit If the site is earning 500$/ month and the value of the site is 5000$