Welcome to WebmasterWorld Guest from 188.8.131.52
In your case, I think you are going to have to work at convincing someone that the site COULD make a lot more money (you know, the typical e-commerce stock sale ;)). A $1,000 income stream just is not likely to atract many takers. If I value my time at $100 per hour and the site takes 2 hours a week to manage, I'm spending $10,000 of time for $1,000 in income. I think you need to show some upside!
Since you put it in terms of ROI (works for me), would most interested parties be looking for a 3-5 year ROI??
I remember reading up about e-comm's not really making money in the first couple of years, so perhaps it is reasonable to sell a site at a price where you would get a return after 3-5 years...
would most interested parties be looking for a 3-5 year ROI??
With any kind of active investment (which I suspect this site is)I think you are on the money with a 3-5 year payback.
I always believe in selling the sizzle and not the steak. With an income stream of less than $100 per month, there is not much sizzle here! That's why I think this needs to be sold on the basis of what it COULD generate. Even at that, it will be a tough sell.
The big question in valuing a business like this is what its growth potential is. The bigger the potential, the more it is worth. Of course, you have to convince a buyer that the potential is real and that with the right steps it can be achieved.
Conventionally, a valuation of ten times annual earnings is a starting point ($10K in this case), although during the dot-com boom you could probably add a few zeros onto that number. If the earnings forecast looks shaky, then it could be lower, of course. One problem is that such a small business kind of falls into the "not worth the effort" category unless the growth prospects are strong. An investor could put his $10K into bonds or equities and get an annual return close to your $1K, and not have to do anything.
IMO, your ability to sell this at all depends on your ability to convince someone there's a pot of gold in the future. Good luck!
vitaplease brought up your best alternative and that is to look for others in your industry who may be interested in the domain, the PR and any other useable information from the site.
You may also be able to set up some type of referral program. Keep the site, but send buyers to someone that you've worked out a commission deal with. Ask them if they want to maintain it.