value of a site, based on current profits?

[disgust]

my site's making 3-4 grand a month (from advertising) and requires virtually zero upkeep.

if I was going to sell it, how much would something like that go for?

[Hawkgirl]

A very quick but not very good way of estimating a business's sale value is to triple the annual revenue. If your site makes $30,000 per year, for example, then with this rule it could be valued at $90,000.

Unfortunately there's more that goes into pricing a business than just revenue, so this rule is very vague. And no matter how you value it, in the end you'll need to convince a buyer it's worth the price.

[digitalv]

All depends on the business and the buyer. Some businesses will sell for 6 months worth of the gross, others will sell for 3 - 5 years. The best thing to do would be to have your business appraised - your profit is actually SECONDARY to the gross income, because the "costs" will vary from owner to owner. For example you might have to pay a certain amount of money for an office, web server, etc. while if an existing company absorbed your operation they wouldn't have those costs anymore - thats why gross income counts the most.

How much your business is worth will also vary from buyer to buyer. Some buyers, such as a competitor, could care less about your income if the fact that you EXIST is cutting into their own sales. They'll buy you out just to shut you down.

Anyway, have your company appraised. Often times the brokers/appraisers can help you find a buyer.

[Compworld]

A typical analysis would be 5 to 10 times gross earnings. Obviously, it also depends what you are bringing to the table and what industry you are in. If your in a highly competitive industry and you are not doing so well, then you'll be lucky to pull in 3 times earnings. Most though are around 5 to 10 (I.E. you gross 36,000 per year, you could possibly sell it any from 180,000 to 360,000) times earnings. Again, there are other factors that are added to this equation. If you have nothing unique to bring to the table, it might not be worth that much. Your best bet is to go to a company that represents acquisition targets. If they will accept you as a client, then you would have a better chance of getting top dollar for your business. If not, it may be a tough sell.

CompWorld

[percentages]

The old rule of thumb for bricks and mortar businesses is 10 times profit or 3 times sales plus assets.

This is hard to apply to online businesses.

For my online businesses I will sell for 3 times annual net profit.

Online trading is volatile, and in its infancy. You could argue that 50 times profit is justified based upon future growth. You could also argue that 3 times profit isn't warranted based upon predictability.

I'll sell for 3 times annual net profit and smile. That may turn out to be undervalued or overvalued........but it is a number that makes me happy :)