Establishing a value for your online business is the first step in selling it. As you would expect, the valuation of your company is directly associated with its earning potential.
The earning potential is usually stated as a measure of the company's yearly profitability. Many valuations use a common calculation for establishing appraisals, a financial metric call Earnings Before, Iinterest, Taxes, Depreciation and Amortization or EBITDA for short.
Your business's appraisal value or selling price is often calculated as a multiple of your EBITDA or net operating cash-flow. The multiple used varies for each business and can range from 2 to 5 times EBITDA depending on many factors.
- Are revenues and profit growing year over year, flat or falling?
- How many years in business - history of website business
- Domain name - generic dotcom or memorable/branded name
- Search Engine positioning for keywords
- Unique visitor traffic - natural and paid
- Any proprietary technology and products?
- Number of customers
- Size of email/subscriber database
- Size of industry - is it a growth industry?
- What other assets and technologies will be sold with the business?
- And many more variables...
Your Website Properties' Broker will work with you to appraise and establish a marketable asking price based on the unique attributes of your business. Our main focus is to assist you in obtaining the most value out of the sale of your internet business.
For more information on the entire sales process please see our Selling Your Online Business page.