I can't decide if I should sell or not. Offered 8x earnings

I run a website with over 15 million pageviews a month. It’s been making me good money for over 6 years now and I had no intentions to sell but I’ve recently had a serious offer of purchase that is 8x what I made last year.

It’s a very tempting offer but taking it would essentially leave me without a job as my other projects make no significant money and I don’t see that easily changing.

There are no signs that my sites growth will slow down in the near future but I can’t predict what will happen a couple years from now… for all I know, it could start a major downturn and I’ll no longer be able to make a living off it. That’s why the temptation to sell is high because it would basically ensure my financial stability for the next 8 years.

On the other hand, the site could continue to thrive year after year and continually earn more and more money for the next decade and beyond. I just don’t know what the future would hold.

But I also have no real idea what my site is actually worth right now. If I do sell, I want to know that I’m getting a fair price.

Is there a company you can hire to look over your sites history, traffic stats, earnings, evaluate your market, etc. and give you an estimation of your sites worth?

You could try http://ebizvaluations.com. That’s the best tool I’ve seen, but even that will only give you a finger in the air estimate. After all, there is no “definitive value” for a site. You might value it at $50,000 but somebody might actually pay $60,000. What value does the site have then? It’s all subjective.

Is selling your current site and starting/buying a new site an option?

Thanks. That sites at least a little better than most of the ones where you plug in just your website name and it spits back a figure based on that alone. It still gives a low figure though (over 5 times less than what I was offered).

If there are companies that specialize in evaluating your websites worth, I would be willing to pay at this point. I don’t want to sell and later somehow find out that the site may have actually been worth 2 or 3 times as much.

Is selling your current site and starting/buying a new site an option?
There is a non-compete in the contract and most everything else is outside my expertise.

I don’t know of any. The problem with valuations is they’re all subjective. The only valuation that matters is the one belonging to the person who buys the site.

What many people do is put their site up for auction with a ridiculously high reserve to see what people are willing to pay. The only problem with that is getting the right audience and revealing details about your business you’d rather keep under your hat.

While you are still trying to come to some final decision could you not start up another similar site,you have all the vital information on how to promote the site and earn revenue from it.Unless when the deal is closed you have to sign a disclosure that you wont start another competing site.

Its a tough one to call for sure but if the revenue has continued to grow and the potential buyer is willing to pay a premium they must see a massive potential in it on going,if this is the case it may well be worth holding onto.

Regarding the valuation of sites,you have 2 options these so called sites that give a valuation has to be seen as more of a bit of fun and nothing else and then you have the quality payed valuation which will go into great depth of all the sites details and then at the end give a good indication of it true value.Which site you could use for this i am not sure but others may help guide you with a website name.

I agree with hooperman. Don’t waste your money paying someone to value your site for you!

Value of a site, unlike the price of a public company’s stock, is not a fixed number. Every potential buyer out there, given all the relevant details, could put a completely different price to the site.

Do yourself a favour and rather than trying to arrive at a specific dollar figure, work on identifying whether you can get another buyer at a higher price.

If you can’t then the 96x (monthly) is your best offer and you have to decide simply whether that figure overrides your natural desire to retain and continue running your business.

I spend a lot of time monitoring the multiples businesses sell for and 96x is a very high multiple by most standards. Buyers wouldn’t normally pay that kind of multiiple for a website unless they were confident they could generate a lot more from it now than you are.

Clinton

8x time the sum you made in a year for an internet site?
It is more then fair. Usually it’s only 1 year a head profit. You made 4k in a year the site worth is 4k.
I would take the money. From the I could start new project.
Not to mention that, if you don’t sign, you can clone the site you just sold.

If you said correctly that seller is willing to pay 8x of what site made last year. And assuming that “what site made last year” meant “net” (and not “gross”). Meaning that seller was willing to pay 8x “earnings” or 8x “profit” (not 8x “revenue”). Because “earnings = revenue - cost”

So assuming that all that was true, then that means your “sales price as a multiple of monthly earnings” is 96.

Sitepoint article shows charts here that in 2008, content sites typically sold for 24 times multiple of monthly earnings.

For blogs, it is about 18 times.

Sales prices at 12x monthly earnings are very common too.

So if your seller is willing to pay 96 times. That is considered a “more than fair” price.

But if you had not taken into account “cost” as in hosting cost, staff, etc. Then subtract that from the revenue and re-do the above calculations.

Of course, money should not be your only consideration. So the decision should really be up to you.

Ask them for 16 times worth. At least make it worthwhile. If you sell, great. If you dont, you havent lost anything.

If theyre keen, theyll pay it.

8x annual earnings for a website is almost unheard of… even 3x is high.

There may be something wrong with your earnings…

Important Questions:

  1. Are your pageviews calculated with Google Analytics or Awstats / Webalizer / other local solution? The latter solutions tend to produce incorrect results as they calculate spiders and other bots in with pageviews, and also may count every asset load as a page view.

  2. Assuming your “actual” pageviews (per Google Analytics) are at 15 million/month, and a good target market (not a BS userbase of bots and spammers) you should have an eCPM of $2+, so potential earnings of $30k+ per month. If your earnings are NOT ANYWHERE NEAR 30k/month, you’re not getting the price you deserve for your site, and you shouldn’t be calculating value based on actual earnings, but potential earnings.

  3. If you’re earnings are 30k/month, this means your actual site value is $400-800k, and the offered value should be around $2.9 million (8x annual earnings). If this is the case, your take-home will be around 1.7 mil after taxes. Invested in 5% tax-free municipal bonds will net you $85k annually - not bad (more than 1/2 your current after-tax earnings)! You could even get more aggressive and invest in high-return stocks like NLY (yielding 15% annual dividends). Who needs a job???

If your earnings are not right, you should either 1) correct that by switching your ad network so you’re getting income and offers in the proper range, or 2) negotiate based on traffic instead of revenue.

If you are being offered 8 x annual net, then please hit the bid(sell it!!) and but another site/sites for 1-2 x annual net and you will be way ahead of the game.

I think you should not sell your valuable site. Its will increase more than you expect now.

Harry

I think this question has been answered now. Thanks all.

Thread closed.