Ok, every business is made with one plan. To make money, then to sell. When do you know when its the best time. Its hard to tell when you are going to peak.
Well actually, my business is a business I set up for me to learn how to code, etc and I'm not too bothered if I make money or not - it's just an added bonus. There's also charities, so your idea that all businesses are around to make money is bull. But you should sell when you don't want to run the project any more, or when you feel yourself getting bored.
I respectfully disagree. There are many exits strategies to business, and selling the business is just one of them. Personally, I like Warren Buffet's strategy: "My favorite timeframe to hold a stock is forever." That's how I approach business.
No business will last forever, its a fact, sooner or later its gonna go down. You just have to sell before that happens.
Most business sell for 3 times its yearly net profit, if the markets looks like it will stay steady. Just a rule of thumb, depending on supply and demand there will be exceptions. You just have to make a decision if you want to work the next 3 years for your money or take it all up front. I personally would sell the business when the amount of money received could fund my retirement comfortably or there is an opportunity to make more money doing something else.
Thank you Lightning-Software. That is the type of answer i was looking for does anyone else have any suggestions or ideas such as this?
Within some webmaster forums this is true but for unique sites (like del.icio.us which sold for a high number to Yahoo) or brick and mortar businesses the ratio is much higher. Business valuation firms use models like the Discounted Cash Flow model which I approximate by asking what is the dollar value of an equity (say a savings bond) that will produce the income of the business. If you have a net cash flow of $100,000, you'd need a million dollar bond paying 10% to replace the business. Of course many web business would not do well in DCF model as projected earnings aren't as certain as traditional businesses.
as long as you develop a good site, sell them in your high traffic period if you need money, if not will keep it is better
If the site is good, get a loan and pay it off with revenue from the site. When the loan is paid off you still have the revenue.
But some businesses, the best businesses, last well beyond their founder's death. Do you think Henry Ford or Sam Walton should have sold their businesses before they died?
If you get an offer for your site that is significantly higher than the rules of thumb that are referenced in forums. If you get an offer equal to ten months profit, don't sell. If you get one that is for 5 years revenue, take it. If Google, Yahoo, or Microsoft is making a 7 figure offer take the offer and have them hire you as a consultant for a 6 figure salary.
On the Google part: Haha, xD Someone would be very lucky if that happened. I'd work at Googleplex for free!