Have you ever wondered what your website is worth? Have you ever thought about the changes you can make to your website to increase its value? If you own a website, chances are you have thought about selling your website or you are interested learning how much your website is worth.
Website owners put countless hours into developing a website, creating quality SEO,
increasing products and growing sales. However, when it comes time to sell the website, as the saying goes, “if you build it, they will come,” right? Wrong! Website owners may have a difficult time selling their website if it is not running as efficiently as it could be.
Like many brick and mortar businesses, increasing traffic to your store or website can be challenging. For a website, having good SEO and an effective pay per click (PPC) strategy can increase traffic rather quickly. As traffic increases, so should sales and profits. Generally, many website owners respond to increasing sales and profits by adding more structure and staff rather than automating the system.
Websites, like many other businesses, are sold on a multiple of Sellers Discretionary Earnings (SDE) or Cash Flow. Typically, these multiples range from 2x – 4x earnings or cash flow. A website owner can increase their multiplier by:
- Having a clean automated system that operates on a small staff.
- Locate vendors that are willing to drop ship product for you, thereby limiting or eliminating inventory.
- Focus on automating the website so it can be run from a laptop computer and cell phone anywhere in the world.
- Having a clean set of financials that can be verified by a buyer.
The first 3 key items add up to 1 main selling feature – being relocatable. Having a website that can be easily relocated will increase the number of potential buyers who can purchase your website. More buyers mean selling the internet business faster and for a higher amount.
The last item directly relates to being financeable. Selling a website is unlike selling a brick and mortar business. There are very few tangible assets that will provide collateral for a bank loan. To find bank financing, a buyer will need to look for a lender that evaluates loans based on cash flow rather than collateral. With little to no collateral, a bank will be looking for squeaky clean financials in order to finance the deal.
To learn more about selling your website or for a free website valuation, contact me, Gino DiGiallonardo, at gino@mabusinessbrokers.com or 508-922-7036.
