How to determine the business value of your website
As a web entrepreneur, one of the most crucial decisions you will eventually make is to sell your website. Your website is your own creation and one can become quite intimate with it as you nurture and develop it. Finally, the time has come to sell it and you only get one chance to do it. Once the deal is done, that’s it, there’s no going back. Therefore, determining the true value of your website is of the utmost importance because no one wants to make the mistake of selling something that they value too low.
Therefore, it is important to carefully consider how much your business website will sell for. There is no hard and fast rule for determining the value of your website. In fact, in most cases the value of a website is subjective. This means that it is usually based on one’s personal judgment. However, there are a couple of formulas that website marketers use to help them estimate how much the sale of their website is worth.
You can base the value of your website on the multiple of the revenue it generates. For example, many website marketers use a straightforward formula. This means that to calculate the selling price of your website, you need to multiply the net profit of the site by 10. The reason behind this calculation is that the lower basis of the lower level of ROI is ten times. For example, if your website makes around a hundred thousand dollars a year, then you can sell your business website for a million dollars.
Another method of valuing a website is to use its inventory and assets as the basis for the calculation. So what are the inventory and assets of a business website? They are the contents, graphics, images, videos, applications and scripts necessary for the existence or business of the website.
When valuing a website, you should also consider the size of your customer list, subscribers, and database. If your website is popularly branded, that can also increase the value of your site. In general, a well established website that has been around for quite some time would be extremely well priced.
One of the secrets of how to earn money from home is not to put all your eggs in one basket. This is the golden rule of diversification. The more diversified your market is, the higher you can command a price for your site. This is because a website that has a wide audience and appeal will be more stable than one whose strength is one-way and with no other support to turn to in case something bad happens along the way.
All of these things, including traffic diversification, help increase the value of a website. But then again, for the most part, judging the business value of a website is really a personal matter. The bottom line is that if you are not going to be satisfied with what the buyer is offering you, don’t sell your website. Conversely, if you’re happy with the offer, go ahead and sell your business website.