Value Of A Business With Website

looking for ballpark numbers

[LostOne]

Hi folks. I saw some lengthy discussion in the adsense forum on this but it only pertained to adsense sites. We have a physical presence with a brick and mortar retail storefront but 95% of our business comes from the internet. We don't advertise locally, so as you can imagine the possibilities to grow are large.

The property is rented but everything in the store is paid for with an insured value of $30,000. No debt. Our first year of business that ended July 31 we did $ 1,200,000 plus or minus in sales. Net profit is near $110,000. Any ideas how to value this? Ballpark guesstimates.

[TheGuyAboveYou]

Can range from 2-5 years net profits + the value of anything else the business owns. Depends on the potential the buyer sees in it. You could also get an appraisal done if you search around online. This usually requires opening up all your books. You will have to do that anyway, most likely, if you end up selling it.

[wingslevel]

2.5 x net for an all cash deal.

3-4 x if you finance....

[LostOne]

Thanks guys.

"Depends on the potential the buyer sees in it"

That's really the key. Somebody unfamiliar with our business wouldn't understand it but an online competitior could see it as great value. Who knows what would happen if we used adwords aggressively. We stopped using them two months ago and sales actually increased. Naturally we do have very good SERP positions.

[basecan]

Another big factor is how labor intensive your business is?

[LostOne]

It's all drop ship for the internet. Only two people in the business.