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  1. #1
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    Can anyone help?

    I have been approached by a company that want to buy out my entire website, I have been trying to look for the best information that would help me to put a price tag on my website, to check how viable their offer is, however I can't find anything on-line which would indicate the best way to put a price tag on my website in the current market environment.

    I would be grateful if someone could offer some advice?

  2. #2
    SitePoint Zealot pjman's Avatar
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    Base it on the following...

    I read a couple of articles a couple of years ago that made great points on the sale of a website back when a web site actually had value. Just to outline the thoughts of the author:

    In the following in your price:

    1) All of the overhead from day of the site.

    2) $35 per hour per man hour put into the site. Regardless if you paid for it or did it yourself.

    3) Track your unique users, take the average monthly number of the last three months and times that number by $25 per user.

    4) If you have a catch Domain get it appraised and add 25% to it.


    That's at least what the author said. I remember the numbers because the name of the article was, "The #25 Rule!"

    Hope this helps!

  3. #3
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    pjman,

    Thanks for this advice! my only fear is how the market has degraded in the past few months, although they are extremely keen to buy me out completely, I just don't want to be ripped off!

    The site has got to big for me to handle, so its either take a couple of employees on or sell it on, I'm not sure if these prices would apply today? If anyone knows the answer to that one, I would appreciate this very much!

  4. #4
    ********* Addict jaiem's Avatar
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    If you're site sells a product be sure to include some measure of the value of sales. If you've been in business for a couple of years odds are you have a good reputation ("good will") and even when the site is taken over by someone else your reputation will remain. That's worth something too.
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  5. #5
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    Just my $.02....

    I don't know if you should consider every hour you've put into the site - particularly at $35/hr. I don't know anyone who hasn't put hundreds of hours into their site. For most sites you're just not going to get $35,000 for a site that was labor and time intensive to put up.

    I agree that a better valuation would be a reflection of the site's current earning's, the number of registered members/users, traffic and tracking stats, the "connectedness" of the site or url to the offering company, and the value of the url (i.e. sex.com's worth more than thisisthehottestsitewhereyoucangetfunstuff.com).

    If this is a substantial and serious offer it may be worth it to get an outside evaluation by a legitimate apprasial company, an accountant and an attorney.

    The fact that they've made a tangible offer certainly means something.

    btw, congrats on the offer! It's always nice to have you work validated.
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  6. #6
    One website at a time mmj's Avatar
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    In my own opinion, you should take into account not only how much work has been put into your website but the future earning potentional of the website.

    It would be hard to put a dollar value on this, as for most sites it would be extremely high. A site that has a few hundred hours of work in it, and is earning a ressonable amount of money per year, could be sold for $100,000 or something... These figures are only totally made up, for an example only.

    And if you think that is too much, then consider how much Yahoo is worth. Billions of dollars. That's ten thousand times as much as your little $100,000 site in the example above.

    Don't get worried that your reserve price is too high.

    If what they offer is less than your reserve price, then ask for more money.

    If what they offer is above your reserve price, then ask for a further 25% just to get as much money out of them as possible.

    Let's say that you think your site is worth $100,000 and you get an offer for $60,000. You tell them that you are not willing to sell for that much, and you don't tell them your reserve price.

    Let's say they offer you $180,000. Tell them you are interested, but would like $225,000. Then negotiate on a price that is between their offer and the $225,000.

    You might get $190,000. Okay cool. Now you've got $90,000 more than you think your site is worth, and the buyer never know what your reserve price was.


    These figures are examples only. Your site could be worth five thousand dollars or five hundred thousand dollars, but you get the idea.
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  7. #7
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    mfarmerhi/mmj

    Thanks for both your postings, this is sound advice! I don't want to divulge too much information at this tender stage, I hope you understand?

    I am still waiting on an official offer, this may be through today? The organisation that want to buy me out, want to incorporate my customers/content into their website and I discovered last night that I have more traffic than thy received on a daily/monthly basis! "not bad for a small guy ;-)"

    With the advice I've received on the thread, this puts a more positive outlook on my decision making, when I receive an offer! Thanks for All the replies and I will let you know what happens as soon as I can.......

    I have also considered partially selling the website and keeping a controlling interest, would this be advisable?

  8. #8
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    Oops, I forgot to ask this question, sorry guys!

    What would be a reasonable estimate per registered user, for example y members x z dollars = ? what would be a rough figure for z member(s)

    Thanks

  9. #9
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    Originally posted by billbo12
    What would be a reasonable estimate per registered user, for example y members x z dollars = ?
    I'm sorry, I don't think it'll be that straight forward. If you have 100k of users but nobody buys anything, nor clicks through you only get advertising prices for that 100k (i.e. $1-$50 cpm) if that.

    That's why part of the computation has to figure in site profitability. An upscale site with only 100 registered users (ru) but an average sale of $200/per user (gross=$20,000.00) is worth more than 100k ru @ average of $.01/per (gross=$10,000.00).

    Again, just my opinion - but insist that they make an offer first. A serious firm will begin with an offer - they will not dilly-dally around asking you for "what you'd be willing to take." An unwillingness to make an initial offer (to me) indicates that they are not serious.

    If you ask for more than they offer be prepared to justify it by releasing information about your site. Don't waste your time doing this until an offer has been made, but then, if asking for more draw up a report detailing your stats, registered users, uniques, returns, number of pages served, number of pages w/in your site, articles, etc.

    Also use the pieces of your site to your advantage. i.e. the "site" can go for $500, but if you want the current user list that would be an additional $1000. Original content currently served on the site may be included for an additional $500.... etc. (insert your own figures here.)

    Originally posted by billbo12
    The organisation that want to buy me out, want to incorporate my customers/content into their website
    You don't have your site listed on your profile. Question: do you have a posted privacy policy on your site? If you do and it promises that you "won't release registered user info to any third party, anyone else, other, etc." you might have a problem (moral and legal) here. Such a policy would mean (in addition to the moral/company image problem) that you may have a contractual agreement with each user NOT to give their name to anyone - even a new site purchaser.... Think about it.

    In today's atmosphere of dot-com failures sites are simply not worth as much as they used to be. Further - in my experience - site originators/designers often value their site far monetarily than would a potential purchaser. This is because they've invested so much time in thinking up, designing and making the site successful - uniqueness is always harder than copying.

    A potential buyer simply sees something that can be copied.

    Value, in today's economy, must be based upon profitability - current or future.

    ps It's always nice to have a low figure in mind that would be the absolute bottom figure you'd be satisfied in selling the site. If their figure doesn't ever get past that figure be confident in turning them down.
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  10. #10
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    mfarmerhi:

    This is good sound advice! Thanks very much for this information, I am now considering alternatives to selling, although the offer hasn't came through as yet........ I think it may be advisable to build on today's success for the future and wait until market confidence has grown more than what it is at the moment ;-)

    Thanks....


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