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Can I Change My Website Valuation?

Posted by Leo Decker in Articles

If you’ve recently gone through the process of obtaining a business valuation for your website and the numbers came back as less than what you were expecting, you probably have the question; can I change my website valuation amount.

The Basics Behind Business Valuations

The good news is that simply getting a valuation does not obligate you to list your company for sale or to share this information with anyone else outside of your inner circle. However, it can be beneficial to get a valuation if you are contemplating selling your company in the future and are curious about how the process might work and what you can anticipate.

The support of an experienced online business broker is instrumental in giving you the right tools and information necessary to determine your strategy. The truth is that you can change your website valuation amount if you use the information gleaned in the valuation process to pull together a plan and outline for accomplishing your goals. Your website valuation might reveal that there is work you can do on the marketing end of things or by improving the search engine optimization of your website and this can have positive benefits on your overall website valuation. The main reason that a website has value is because a willing buyer uses this as a way to make return on investment. Simply put, this is the primary purpose of listing your company for sale and receiving an appropriate valuation. You may assume that your web domain has plenty of potential but this in and of itself is flawed thinking when it comes to getting a valuation amount. This is because buyers are looking for the best way to get their money back in the shortest time possible and will pay a lower or higher amount based on the perceived risk in terms of them getting their money back. Buyers are typically willing to pay a multiple of the earnings that a business already has in order to acquire it. The amount of risk involved is what determines this multiple as well as your choice to work with a business broker. There are many different factors that can lead to the perception of your site as a less risky investment.

These include diverse sources of traffic, market branding and leadership, a unique selling proposition, automated systems already in place, multiple revenue streams, increasing growth, and solid and consistent earnings. Traditional valuation methodology is something that can be explained to you by your business broker when you approach them about valuation. Most frequently, this will come in the form of an earnings multiple.

A buyer will apply a multiple to the annual profits. If you are working with monthly statistics, the number might be slightly different. The overall value of your business and all of the factors involved will help determine whether or not your company should be listed for sale now. If now is not the appropriate time to list your company for sale, knowing these website valuation metrics can still be helpful for outlining a strategy.