If a site makes $X dollars a month. At what price $Y should one determine the sale price to be set at if one were to want to sell it?
Should Y be what site would make in one year (in which case it would be Y = 12 * X)?
Or maybe higher? Should Y = 30 * X?
Or maybe lower? Should Y = 4 * X?
Opinions? Anyone? Who has flipped sites?
That depends on a lot of things… among them:
- The business model / type of income
- How far back you can show that income to have been historically stable or growing
- The stability of the business / expected issues with customer attrition after a sale
- The amount of work required to maintain that income level after a sale
- The skill of the work required to maintain that income (does the buyer need to hire additional employees/contractors to operate the site?)
- The synergies between the site and the existing business of the buyer
- The other assets involved in the sale that may be worth more than just its current income level
Of all the sites I’ve sold, I usually earn between 10 to 15 times my monthly revenue.
Yeah 10x is ideal to sell for, that what I usually do.
I would have thought 12x is better, making 10x less than ideal.
People will pay what they think your website is worth based on what they expect to get out of it. That could be way more than 10x. And it could be less. Why you chose the number 10, I have no idea.
I agree with Dan. There are a lot of factors at play here.
If, however, I had to pinpoint the range that most of my sites have sold for, it would probably be somewhere in the Y = 15 * X to Y = 24 * X range.