A website valuation is an estimate of a website’s worth at a specific point in time. The goal of such valuation is to determine whether a website’s asking price is reasonable or not.
There are numerous reasons why you might want to know how much your website is worth, and it can be difficult to know where to start putting a price on it.
And, of course, while the real worth of a website is what someone is willing to pay for it, you can surely get a sense of how much you should really be able to make if you sold your site.
Factors Affecting your Website’s Worth?
There is always a gap between what you believe the business is worth and what the market is willing to pay. Several factors are considered when evaluating a website for sale:
- Profits for the year
- Trends in business expansion
- How do you get new customers?
- The business’s scalability
- Analyze your customer acquisition streams
- How the company is perceived in the market
- The amount of time you devote to running the business
Investors will consider these factors when deciding whether to purchase the business and how much they will pay for it. They’ll also look at what comparable businesses have sold for in the past.
The two most important factors are your annual net earnings and whether your company is growing. The earnings multiple is used by most investors to determine how much a company is worth.
Understand the Basics Of Website Valuation
There are numerous website valuation methods (Discounted Cas Flow Analysis, Multiple of Revenue, Asset Value, etc.), the most widely recognized method with website acquisition domain has long been a multiple of earnings valuation method.
As a rough estimate, the value of a website is commonly thought to be between 24 and 36 times your monthly revenue, also known as an earnings multiplier.
This means that even if your website generates $10,000 per month, you can expect to sell it for between $240,000 and $360,000.
The more history you can demonstrate, the more appealing your business will be, as long as this is profitable and on an upward trend. The higher your multiple, the more your brand is trending upward.
While you can’t do much to extend the company’s history, you can prepare for the eventual sale by continuing to invest in necessary items early in the process.
For instance, if you understand your website needs a major overhaul and you’re 24 months away from selling, it’s better to do it now rather than during the twelve-month average your business will be valued on.
Best Website Valuation Calculator
There are numerous online platforms for buying and selling websites but flippa is the market leader for the last 5 to 10 years. Their AI base website value calculator tool is one of the best in the market.
Flippa has the most historical sales data as compared to other online platforms and is the world’s biggest marketplace for buying and selling websites, apps, stores, and online businesses. If you provide accurate information, your Flippa valuation would be a reliable indicator of price.
Flippa compares data from your inputs to other similar 1000s of websites that already have sold on Flippa. They consider the business model, category, domain age, and a variety of other factors.
Flippa began with 22 various machine learning models and chose five of the best to form the perfect blended model that is now used to provide users with an accurate online business valuation.
These high-performing models provide business sellers and buyers with the required valuation to either sell their business or purchase a new asset.
Since its inception, Flippa users have sold over 38,000 websites. Flippa is similar to eBay’s open auction platform. Anybody can see and make an offer on your website by default.
You can also choose to make your listing private prevent inspiring competitors and revealing your niche. Flippa charges $49 for listing and 10% of successful sales of up to $50,000. (15 percent if you elect to use a broker).
Flippa is the only website with a searchable catalog of recently sold properties. You can look at these for ideas and then compare the final sale price to your bids.
How to Improve the Value of Your Website
The million-dollar question you’re constantly wondering is how you can boost the value of your website prior to actually selling it. We’ve included some helpful hints below.
1. Expand Traffic Sources
Diversifying your traffic sources should be a priority as you build your website’s presence. Once you indicate that a significant portion of new users is coming from organic rather than paid sources, you can demand a higher sale price, owing to a reduced reliance on paid traffic.
However, organic traffic is not resistant to algorithm upgrades so it’s important to always focus on a variety of traffic sources rather than a single one.
2. Build A Brand
When you can create a brand and a good reputation, you will be able to charge a premium price for your online platform. , as owners have invested time and effort in developing a brand. It’s not just another affiliate website that you’ll forget about as soon as you see it.
They have integrated quality content with wonderful UI/UX to provide real value to users, which many companies go bankrupt to do. You will be in a much higher position to raise the sale price if you can illustrate that you will have built a brand, not only a business
3. Use a Brandable Domain
A (.com) will always likely receive a higher sale price than a .net, .co, or any other generic TLD. Your domain should be brandable, but it should not be a long-tail exact match K.W
4. Diversify Monetization Methods
When you have various monetization channels connected to your website, you are lowering the buyer’s risk, and lower risk sometimes allows you to raise the asking price.
Whether it’s affiliate revenue, eCommerce sales, Adsense, or other ways to monetize a site, you must diversify whenever possible. This is also less risky for you as you grow the website’s revenue.