Forum Moderators: phranque
zeus
And start a new one, a change is as good as a rest :)
Sell :)
Depends on what you can make of the site, and what the offer is.
A lot of sites provide money for old rope, one of those I'd never sell. Unless the figure was retirement style money.
TJ
The site I am working on now has no competition and a topic that will look REALLY nice on a gradutate school application, also it is a topic that I am interested in.
If I had a site about herbal viagra, i'd sell it in an instant.
damn I dont know, Ill wait to see what happens.
zeus
Everyone has a price.
Not EVERYONE.
Zeus:
What it really comes down to is if you truly enjoy working on the site or not. If you put your heart and soul into it, you might want to consider keeping it because seeing someone alter and/or butcher your work that you put time and effort into is just agonizing.
If you don't enjoy working on it, sell it! Kill two birds with one stone by getting rid of a page you hate working on and get money at the same time :)
-p
Since you claim that your site is "pure HTML" does this mean that the pages are static...? If so then perhaps this company spot's an opportunity to drop these into a dynamic app they are running to beef up its authority on a certain subject matter...
A static 1600 page site even with killer content doesn't have great valuation...but a dynamic database site that can do things like deliver contextual content to it's audience based on their actions...that could really have some value...
If the site can be converted directly for immediate sales for the Company wanting to purchase your site then you need to determine the value of their products or services per unit and then calculate what the volume of traffic that you currently generate could mean to them at say a 2% Daily Sales conversion rate...then annualize this and this would be one way to value the site for a sales price...
So, for example, if the Company has a product that sells for say $100 dollars and your site can generate for them 3000 uniques per day and will sell for them immediately upon them buying the site and the conversion rate is say 1% per day then that's 30 sales x $100 equals $3000 per day revenue...now annualize this and if you can factor in what their profit may be say...they clear after expenses...$50 dollars per sale...now you want to multiply 365 days a year (based on the fact that if the site is performing well and has broad and targeted distribution across search engine and directories and performs well daily) by $1500 (that's 50% of $3000 daily) and you then come up with the following figure..
$547,500 .... not a bad selling price...
Remember...the Company offering to buy the site is looking for it for their own reasons and they will place whatever value they think it is worth...they may not be interested what you think it is worth or how much you are attached to it...You job in the transaction in order to attain the best ROI against your labor and time is to convince them of how the site will perform for them financially...
Personally, I can easily pump out a 1600 page site that will generate great traffic and interest ... but I would always think about how can I capitalize on my efforts and then take these funds and leverage them towards another successful project...
Hope my ramblings help in some small way...and good luck with your process..
The arguments are the same...
I worked hard on this. It's my soul. It's worth more than any thing. They will mangle my masterpiece.
My answer was always the same. Why did you create it in the first place? Would selling it allow you to move on to bigger and better things? (I mean a screenplay minimum sells for 30K. At the time that was more than one year pay for me and most writers I knew. I could have made a really great book/screenplay if I had nothing but time for a year.) Could/Will you do another again?
I'm not saying sell it for nothing, but NEVER, NEVER let emotions play a part in business dealings. What was made can be remade, and if your house gets paid off by selling the original, go for it.
What was made can be remade
While that's true, it doesn't mean you'll be motivated to make it all over again. And besides, if you decide to remake it, you'll essentially be trying to compete with yourself by trying to best your own work. Competing with yourself just isn't healthy.
I've had cars that I didn't want to sell. But I knew selling them meant I would have more money and space for a nicer car.
It might be 10 billion dollars, or perhaps not monetary at all, but I have never ran into a human that didn’t want for something. It’s called dreams or aspiration.
I'd figure out my minimum price...
Key Q: How much PROFIT does the site make? (Rhetorical question.)
If it were, say, $50,000/year, and you could sell it for $250,000 or 5X annual profits that would be pretty good (below what good ongoing concerns get, but on the Web things are fluid; it might be worth 0 in two years).
At 5X annual profits, would that be worth it to you?
(At 10X sell not matter what anyone says. )
(At 2X, probably not, unless you could recreate it for 1X inside of 6-12 months.)
I think I will wait, everything is going ok right now.
Thanks everyone I think its good to get a little text about selling a site, because the internet will get huge again.
zeus
If you have an offer of annual income for a project you are "finished" with, i.e. you would no longer have any responsibilities for its maintenance, wow - that's like *free money*.
Set a good price that will guarantee you a minimum of comfort and quality of living. And For The Love Of Regis, get a lawyer involved in the contracts, with provisions in case the buyer goes into bankruptcy, or if they pull the plug on the site 10 years from now.
I agree with hannamyluv who compared it to a book/play/screenplay. It's hard to let go. But presumably you're intelligent enough to work on something new, and young enough to live for a while longer...
Did you know the family of the late Burl Ives are still living off the royalties from a few popular Xmas specials. They never have to work again, as long as they keep rerunning that Rudolph cartoon every year.
Sell.
I would also make sure that they did not have a no-compete clause anywhere in the sale. I design my sites because I like the subject. I would never sell to someone that wanted to lock me out of something I enjoyed.
Besides, if they took my hard work and did a crappy job, I would want the opportunity to squash them with another site. ;)
I have bought and sold several companies and when it was a company that I was paying good money for, I always have insisted on a no compete for at least two years. If it's a well run business then the price you will have to pay has to have the no-compete figured in. If a seller refuse a no compete, then it either tells me that I'm paying too much or that there is some other major problem with the business that I haven't identified yet, because the seller is planning on the purchase being my demise.
On the other hand if your buying a company that is being run into the ground because all it needs is some good management or something else you readily can provide it with that the seller can't or isn't, and your buying it for cents on the dollar, who cares about a no compete, I'm more worried about the seller loosing my check on the way to his bank. :P
I have never sold a business without the sale including a no compete, but then again, I always made sure the buyer understood that the no compete was going to cost extra.
The going rate to sell any business is normally 2 1/2 to 3 times valuation.
Example: If a website earns 100k in sales a year the asking price is between 250k to 300k.
Also depending on the up or down swing can change the asking price just a bit.
Usually any serious savy buyer would know exactly what a website is worth.
If you want a lot more than what your site is worth at the moment many publicly trading companies will offer you 6x valuation but will pay you in stock instead of cash over a 2 year period.
If the stock is good there is a ton of money to be made. If not then you may get taken.
My opinion now a days cash is always better.
If a website earns 100k in sales a year the asking price is between 250k to 300k.
SO whats the difference in value if profit is 10k or 90k?
You asked:
"So whats the difference in value if profit is 10k or 90k?"
That's a good question!
What I gave you was simply a rule of thumb that most buyers go by when looking for a thriving business to purchase.
Based on 100k in sales buyer looks for average of minimum 30% profit margin for asking price in range 250k to 300k, which is 2 1/2 to 3 times sales.
If your profit is only 10% or 10k then this is where the flux comes in on lower or just below asking price. Any knowledgeable buyer would ask the right questions and quickly rule out a business with only 10% profit margin.
And if you are at 90% profit or 90k then why on earth would you sell?
Anyways, to answer this question the demand would be much greater than the 2 1/2 to 3X sales but rather stock options 10x to 20x going asking price.
Most of todays buyers are more interested in cash flow. The better the cash flow, the more flexibility and demand is your business.
5 X EBIDTA
Earnings Before Interest Depreciation Taxes and Amortization
Can you direct me to any documentation on online businesses worth 5X EBIDTA?
Very curious to where you got this info from.
Thanks!
Think about it. If you are making X amount a year why would you sell it for that. To make it worth your while you should be looking at 4-5 times...
One note: If you are thinking of selling to another company please get a qualified acquisition consultant.
There are many great articles on the web to look into. Selling your company is like war! Be careful.
And if you are at 90% profit or 90k then why on earth would you sell?
I have profit margins over 90%, about $4700 profit out of $5000 a month income.. Just wondering what my site is worth, considering i only started it a few months ago and its fully automated i'm doing pretty good...
If I were you I would hold on to it for a min of 12 months. Most buyers would like to see a sales history for at least the last couple of years.
Reason being it could be just a fad business where there is a rash of sales for a few months and then things die off.
However if you continue on the path you are on and show those kind of numbers on a consistant basis, then it can be worth your while to sell later on!
zeus
