When a business owner is ready to sell their website company, one of the first things they want to do is get a website appraisal or, as it is also called, a website valuation. Just like any other commodity, knowing the approximate value of an item to be sold can help dictate other things like how much they can spend on a new website company (or how much they can afford to spend on that vacation!). When it comes to getting a website valuation, stay away from the calculators that are in abundance online. These are not designed with accuracy, and can create a false impression (on either side) for the website business owner.
Unfortunately, not just the online calculators, but most website business brokers only provide multiples of cash flow as their basis for a website valuation formula. This method is short-sighted. Find a skilled and savvy business broker that knows that there are many other aspects involved to coming up with a website appraisal.
One of the ways to approximate a website appraisal is by comparable sales within the industry. Search for sites that closely match criteria with the website in question. Another way is to create a revenue multiple (unfortunately, this is what many business brokers rely solely on, but it is, indeed, one part of the formula). Another criterion in determining website valuation is traffic value. This is determined by multiplying the number of unique monthly visitors by the cost per click of the site’s keywords. Another factor to look at is how much it would cost to “reverse engineer” the site. That is, to rebuild the site, gather the same traffic, added with the time involved in doing so? Finally, how much are the customers worth in terms of how much they spend on average, etc.
WebsiteClosers.com are business brokers who have twenty years of experience providing website valuations for website business owners looking to sell. They offer website appraisals that are thorough and accurate and take into account many of the factors involved in internet marketing and sales.