Craft the best listing description for selling your website

Craft the best listing description for selling your website

Writing the perfect website listing description may seem daunting for new sellers. This blog post will provide new sellers tips on how to best structure your listing description for an online business, and the do’s and don’ts associated with selling your business on Flippa.

Structure

When you write the listing description when selling your website, the structure of your listing is one of the most crucial parts of setting up your listing for success. Since establishing the website marketplace, our account management team has refined a listing structure which is easy to follow, and reduces the amount of questions buyers ask sellers during the auction process.

The following has been identified as the best structure for a website’s listing description:

  • About the Seller – Briefly describe yourself and your role in the website. Indicate whether you are the original owner of the business.
  • Business Model – Describe what the website does.
  • Reason for Sale – Briefly describe why you are selling the business.
  • Development – Briefly describe how the website was developed. This should include the programming language and any frameworks/platforms used.
  • Operation – Briefly describe what is required to keep the website operational. This should include an average time spent per week. Additionally you should indicate where the website is hosted.
  • Traffic – Briefly describe what country most of the traffic originates from, and the sources that generate the most traffic for the website.
  • Monetisation – Briefly describe how you generate revenue through the online business. Any peaks or troughs in revenue should be explained.
  • Expenses – Briefly describe the expenses required to operate the online business.
  • Reliability – Briefly describe how you are willing to prove your financials? Will you post a video walkthrough of backend earning reports? Will you provide live screen-sharing sessions to prospective buyers?
  • Marketing – Briefly describe what marketing initiatives you have used to establish the website.
  • Included in Sale – List the items included in the sale. Include any domains or social media accounts included in the sale.
  • Future Opportunities – Briefly describe what a buyer could potentially do to improve or grow the website.
  • Keep the lines of communication open – Let buyers know they can reach you in public comments or via private message if they have any follow-up questions.

Here are a few examples of websites that have sold with detailed listing descriptions:

Do’s and Don’ts

Don’t lie

When selling your website, lying or omitting items will almost always hurt you, as it is sure to come out in the due diligence process. It is crucial that all information you provide in the listing is accurate for the online business you are selling. All claims should be able to be verified by potential buyers on request.

Attach proof

Any revenue claims need to be supported by proof. This proof can be in video or image format. We also suggest providing proof of traffic and other claims you make on the listing.

Provide as much information as possible

Buyers want to have access to as much information as possible about the online business before they place a bid on it. Providing as much information as possible will allow buyers to have access to this, and reduce the amount of questions you will be asked throughout the auction process.

Don’t be rude

Be professional! Respecting potential buyers and the questions they submit is important to ensure buyers want to work with you. To ensure the auction process is smooth, ensure that you assist and support buyers during the auction period when they are deciding if the online business is right for them.

Be clear

Potential buyers of your website don’t want to be searching through your description for specific information about your online business. By using the structure provided above, and correct grammar will improve the quality of your listing.

Craft the best listing description for selling your mobile app

Craft the best listing description for selling your mobile app

Writing the perfect mobile app listing description may seem daunting for new sellers. This blog post will provide new sellers tips on how to best structure your listing description for a mobile app, as well as the do’s and don’ts associated with selling your app on Flippa.

Structure

The structure of your listing is one of the most crucial parts of setting up your listing for success.

Since establishing the Apps marketplace, our account management team has refined a listing structure which is easy to follow, and reduces the amount of questions buyers ask sellers during the auction process.

The following has been identified as the best structure for an app listing description:

  • About the Seller – Briefly describe yourself and your role in the app.
  • App Description – Describe what the application does. This should be similar to the app’s description on the App Store or Google Play Store.
  • Reason for Sale – Briefly describe why you are selling the app. 
  • Development – Briefly describe how the application was developed. This should include the programming language and any frameworks used.
  • Operation – Briefly describe what is required to keep the app operational. This should include an average time spent per week.
  • Monetization – Briefly describe how you generate revenue through the app. Any peaks or troughs in revenue should be explained.
  • Marketing – Briefly describe what marketing initiatives you have used to establish the app.
  • Included in Sale – List the items included in the sale. This would include any associated website or social media fan page. It is also customary, but not required, that sellers provide post-auction support to the new buyer if they were to have any questions.
  • Future Opportunities – Briefly describe what a buyer could potentially do to improve the app.

 

A few good examples of app listing descriptions can be found here:

Do’s and Don’ts

Don’t lie

When selling your mobile app, lying or omitting items will almost always hurt you, as it is sure to come out in the due diligence process. It is crucial that all information you provide in the listing is accurate for the app you are selling. All claims should be able to be verified by potential buyers on request.

Attach proof

Any revenue claims need to be supported by proof. This proof can be in video or image format. We also suggest providing proof of downloads and other claims you make on the listing.

Provide as much information as possible

Buyers want to have access to as much information as possible about the app before they place a bid on it. Providing as much information as possible will allow buyers to have access to this, and also reduce the amount of questions you will be asked throughout the auction process.

Don’t be rude

Respecting potential buyers and the questions they submit is important to ensure buyers want to work with you. To ensure the auction process is smooth, ensure that you assist and support buyers during the auction period when they are deciding if the app is right for them.

Be clear

Potential buyers don’t want to be searching through your description for specific information about your app. Using the structure provided above (with correct grammar) will dramatically improve the quality of your listing.

By following this structure, not only will it help establish trust between you and other buyers, but it will also help reduce the amount of questions you receive.

 

To get started selling your mobile app here: https://flippa.com/sell

Important Update to Payout Methods

As part of improving the safety of transactions and reducing the transfer fees associated with Escrow on Flippa, we have decided to remove Escrow.com as an available payout method. Flippa Escrow is the safest and quickest way to transact on Flippa. Flippa Escrow is a fully licensed escrow service.

What does this mean for new listings?

New listings will no longer have the option to select Escrow.com as a payout method. However, you could use the other two options (Flippa Escrow and PayPal).

What does this mean for your draft listings?

You will need to update the available payout methods for your draft listing to Flippa Escrow and/or PayPal.

Does it impact any of your live listings?

No, if your listing is live and if you have opted in for escrow.com, you can continue with your transaction.

What pay out methods are available?

  • Flippa Escrow (Recommended) – Flippa Escrow is an accredited Escrow provider powered by Assembly Payments. Payments can be done via credit card* or wire transfer.
  • PayPal (Max. transaction of $10,000) – PayPal does not accept any payments over $10,000. We recommend that you increase the safety of your transaction by using Flippa Escrow.

 

* Flippa Escrow does not accept credit cards from Pakistan, India and Indonesia. However, you can continue to use Flippa Escrow using international wire transfer.

Case Study: Super Seller Interview

Case Study: Super Seller Interview

I’m joined here by Richard Jordan, a web entrepreneur and Flippa Super Seller with $133,867 over 26 transactions and a 100% positive rating. Richard and I discuss his success of buying and selling websites on Flippa, and drops a few hints on how others can successfully do the same.

Tell us about your background as web entrepreneur.

I received a degree in Computer Science in 2009. Rather than working for a company like Google, I stumbled into making money with websites and instantly became fascinated with operating web businesses. I started doing freelance webmaster work, but I quickly grew tired of working for other people who had no idea how to properly operate their online business. That’s when I started investigating owning my own websites portfolio to become my own boss. I figured that if I owned websites I could make the same amount of money and not have to work for other people. Ever since then, I’ve been maintaining my own websites portfolio and haven’t looked back!

What originally brought you to Flippa, and why do you continue to use it?

One of my clients wanted to sell his site and asked me to list it on Flippa back in 2011. This opportunity opened my eyes to the world of buying and selling websites and I immediately became hooked. Since I was still building my portfolio, I was mostly buying websites, whereas now I am mostly selling websites on Flippa. At one point, I owned and operated on a portfolio of about 50 different websites. I sell on Flippa because nowhere comes close to having as many buyers as Flippa does.

A lot of your recent auctions have had no reserve. Are you simply motivated to sell or is there a strategy there for you?

I have full confidence that the Flippa market is mature enough that nothing will sell for anything I would be too unhappy with. Plus I am pretty attached to my websites and have a tough time negotiating a price privately. The auction format takes away my seller’s remorse issues. Whatever happens, happens, and typically it works out better than I could have ever hoped.

Would you recommend a no reserve to other sellers? If so, why?

It isn’t for everyone, but if you’re motivated to sell, I would highly recommend it. In general, websites are hard to price. I can tell you when a website is undervalued, but I have limited ability to predict what it is worth to someone who is a specialist in that niche. Some niches I might know and be able to set that price as well. That said, there are a lot of much more talented people than me out there at growing sites, and there are a lot of niches, each with its own unique factors.

How did you get to owning such a large websites portfolio? Were most of these bought, or did you build them yourself?

Personally, I am not that great at building or growing websites. I have a system for buying though that has worked well for me, and I think could work well for others.

You have just listed TheTolkienForum.com, PoemOfQuotes.com, and FeldGrau.com/net. Can you tell us about these listings?

They are sites I have purchased over the last 5 years. They were all old and neglected when I purchased them. In the case of TheTolkienForum.com I made a software change to grow the community. PoemOfQuotes.com is a great site that I have owned since 2013 that makes on average $400 / month via AdSense without any maintenance. It is a hard one for me to sell at no reserve, but I know it will work out and find a smart owner. FeldGrau.net / FeldGrau.com are the type of cool, old sites I love with timeless topics. Feldgrau centers on German Armed Forces in World War II, and Feldgrau is the nickname for the color of their uniforms. Feldgrau.com is an information site, and Feldgrau.net is a community site. Both are being sold together as a package deal.

If these sites sound interesting to you, check out their auctions here: TheTolkienForum.com // PoemOfQuotes.com // FeldGrau.com.

You mentioned to me you were writing a book. What is the book about and when will it be finished?

The book is about what I have done for the last 5 years. The website world has allowed me to find freedom, love, and hopefully some children soon. I doubt I will make much from the book, but I want to give back. My teachers were sellers on Flippa, and I want the cycle to continue as I transition in my life. I want to inspire someone to take what I have done and exceed it. If one person looks back and feels as thankful as I do then I will be happy with my choice.

I will be giving away everything I know in the book, so it may end up being a bad move if I lose too much money in the stock market and have to come back to buying and selling websites. I have a website book.rdan.co where people can sign up for the book. You can also submit requests for general topics for me to cover and specific questions to answer in the book. The book should come out next month, February 2017. If people find the book helpful, then I might offer services to help people buy websites.

Any advice for other entrepreneurs looking to sell their websites?

I would advise people to stop being promotional when they advertise their websites. It is a turnoff. Let the facts speak for themselves. People see right through you, and then you just come off as a bad person. Have empathy for your buyers. Both a buyer and seller should benefit from a transaction.

Would you like to add any closing statements?

I’d like to leave with a short excerpt from my book, The Trust Fund: Autobiography of a Website Flipper.

Because of my Flippa auctions, I have received questions about how I acquired so many aged, AdSense autopilot websites. As I am ending my journey in this market, I wanted to share my intellectual capital so that future vagabonds down this life path may surpass me and reach similar liberating life circumstances as myself.

My fiancé openly questions me about whether I have a trust fund. I have no job or schedule while she, like many (maybe even you dear reader), spends long hours toiling in the salt mines of corporate America. I am blessed by finding an alternative path in life. I have created my own trust fund with passive income generating websites. But for those who read my story, you may find that it is not an easy path. I hope my story may also help some to turn back before tackling what may be a painful, unfulfilling journey.


Richard Jordan has been buying and selling websites for over 6 years now and still buys and sells websites to this day. Want to be notified if he creates any new listings? Check out his profile and click on ‘watch seller.’

Case Study: iOS App Portfolio Sells for $10,000 at Auction

Case Study: iOS App Portfolio Sells for $10,000 at Auction

Today we sit down with app entrepreneur Michael Patzer, who has completed 9 successful Flippa sales with a 100% positive feedback rating. In this interview Michael gives us the inside scoop on his latest sale, a $10,000 app portfolio, while also sharing insightful tips and strategies others can use to achieve success selling apps on Flippa.

What lead you to become an iOS App Developer?

I studied Finance at the University of Southern Indiana and graduated in 2009. In 2010, I started learning how to develop iOS apps. It didn’t take long before I was hooked, and I decided to make a career out of it. Since then, I have built and sold more than a dozen apps, and I’m currently employed full-time as an iOS Engineer at an e-mail marketing company.

What are some of the apps you’ve sold on Flippa?

I have always enjoyed building both useful and fun apps, and the apps I sell typically follow this trend. For example, I built and sold County Finder, a location app which allows users to quickly and easily look up counties via search or maps. I have also built and sold game apps, such as Word Frenzy, a fun word building game. In addition to games, I also enjoy building functional utility apps such as a text language translator app that I sold for $800, as well as an audio recording and playback app that I sold for $600.

Tell us about your recent $10,000 app portfolio sale

The portfolio was composed of 4 adventure and lifestyle apps: Alti, Ella, Zen Habits, and Life Hacks. Alti is an altimeter and compass, while Ella tracks elevation changes over time (e.g. for hiking & road trips). Zen Habits displays up to date content from the famous Zen Habits blog in a minimalist style, and Life Hacks gives users a feed of thousands of different life tips and tricks for different categories. During the auction the portfolio received more than 60 bids on top of nearly 100 watchers, and it was ultimately closed out via Buy It Now (BIN) for $10,000.

What prompted you to sell your app portfolio?

I developed the apps in the portfolio with a business partner of mine who is a mobile app designer. These apps reflect our shared interests and hobbies, and we built them for other likeminded people to enjoy. For us, it wasn’t so much about the money as it was about providing a good user experience. As our real-world careers took off, however, it became more and more difficult to find time for the apps. Rather than earning passive income while they became less relevant, we felt it would be best to find a buyer who would keep the apps updated and continue to improve them.

Why do you use Flippa to sell your apps?

Flippa makes it really easy to create a listing and get instant exposure. There are a ton of people buying apps on the platform (a lot of the website & domain buying audience seem to be interested in apps now too), and Flippa has the lowest commission in the industry by far. All in all, I’ve used Flippa for 9 transactions totaling over $14,000 in sales. As a result, I’ve gained a solid understanding of app valuations and the types of apps buyers are interested in acquiring.

Any advice for other entrepreneurs looking to sell their apps?

One piece of advice would be around iCloud. The main challenge in selling the portfolio was that all apps in it had previously used iCloud, and Apple would not allow them to be transferred. Even removing iCloud didn’t solve the issue. In this case, you will have to sell the entire app developer account along with the apps, and you need to explain this in the listing description. Another piece of advice is to be realistic about app valuations. It’s easy to overvalue something you’ve built, but buyers want an asset that can give them a return on their investment (usually in 1-2 years).

Enjoy reading Michael’s story? Continue reading more Flippa case studies now.

How Much Is My Website Worth? Website Valuations Guide

How Much Is My Website Worth? Website Valuations Guide

Before you sell your website or web business, you should always perform a website valuation to determine how much your website is worth (get a free Flippa website valuation using our valuation tool). Having a strong website valuation going into a sale is important because it will provide a reliable guidepost and clear expectations. By reading this step by step guide you will gain access to professional website valuation methods so that you can perform your own valuation and be prepared to answer the critical question “how much is my website worth?”

Why should you read this guide?

 

  • Improve your exit planning strategy
  • Learn professional website valuation methods
  • Find out how much your website is worth and what it could sell for
  • Discover how to effectively convey the value of your website to potential buyers

 

Table of Contents

 

  • Website Valuation as a Multiple of Earnings
  • What determines the Website Valuation Multiple
  • Evaluating the Risk of a Website Investment
  • Finding Comparable Website Sales
  • Getting a Second Opinion
  • The Truth About Automated Website Valuations
  • Exit Planning

 

Website Valuation as a Multiple of Earnings

Though there are certainly a wide range of website valuation methods (Discounted Cash Flow Analysis, Asset Value, Multiple of Revenue, etc.) the most widely accepted method in the website acquisition space has long been a valuation method based on a multiple of earnings.

How do you define earnings?

Most website valuations are based on an expression of profitability known as Seller’s Discretionary Earnings (SDE). SDE is effectively the net profit of the business (i.e. the difference between Revenue and Expenses) over a specified period of time, typically the trailing twelve months (TTM), and excluding income taxes, one-time expenses, and owner’s compensation. These aforementioned extraneous expenditures are typically itemized and added back to the net income of the business in the profit and loss statement.

Step 1 Calculate Net Profit: To start building your website valuation, calculate the net profit of your business on an SDE basis by filling out this profit and loss template. Have an eCommerce business? Try this eCommerce profit and loss template.

If you need help filling out your profit and loss statement, check out this article.

How to calculate website value?

Once you have the Net Profit (or Cash Flow) of your business, you can start to formulate a website valuation, which is expressed as a multiple of your annual net profit.

Annual Net Profit (Cash Flow) x Multiple (Years) = Website Value
The multiple signifies the number of years of net profit that the business is worth. You may have heard a website investor say something like, “that website is worth three years.” What they are really saying is, “that website is worth three times the annual net profit.” Website buyers often view the multiple as the amount of time they can expect to pass after acquiring the business (and assuming income remains constant), before they recoup their initial investment. In other words, the buyer asks “how many years of annual cash flow would I pay for this business?” A 2x multiple would mean the buyer expects that it will take two years to recoup the initial investment, a 3x multiple means they expect it will take three years, and so on.

What determines the website valuation multiple?

Graph: Net Income vs Risk vs Multiple vs BEP
The single biggest driver of multiple is risk. Generally speaking, risk and multiple are inverse. That is, the less risky the investment, the higher the multiple. The more risky the investment, the lower the multiple. Risk is perceived differently by every person, and because of this, you will always end up with mild variations in web valuation from one professional website appraiser to another.

Size does matter

An additional conclusion we can draw from the above graph is that as Net Profit increases, so too does the website valuation multiple. To illustrate this point, consider the 2015 net income of four publicly traded companies as compared to FightState.com, an AdSense based content website that sold for $300,000 (3.9x) on Flippa in October 2015.

To analyze the value of a publicly traded company, we can look at the P/E Ratio, a valuation metric that measures the current price of a share of a company’s stock divided by its current earnings per share (EPS) on a trailing twelve month (TTM) basis. Since the P/E Ratio measures the price as the multiple of earnings on a TTM basis, it is similar enough to compare to the multiple of net income methodology we have been discussing.

Company P/E Ratio (TTM) Net Income (2015) Multiple of Earnings Valuation
Facebook (FB) 87 $592,000,000 $51.5 billion
TripAdvisor (TRIP) 45 $198,000,000 $8.9 billion
Criteo (CRTO) 42 $62,276,000 $2.6 billion
Tucows (TCX) 22 $11,374,000 $250.2 million
FightState* (Privately Owned) 3.9 $77,000 $300,000

*Sold on Flippa

When we compare the respective P/E Ratios and net incomes of each business, we can see that as the size of the company increases in terms of net income, so too does the multiple. There are other variables involved, but all else being equal, bigger businesses are typically perceived to be stronger investments (i.e. less risk), and that’s why investors are usually willing to pay more for them.

How do growth opportunities come into play?

Because they can influence the rate of return, growth opportunities are a crucial consideration when performing website valuations. For instance, consider a business that earns $100,000 net income in its first year of operations and promptly sells at a 2x multiple before doubling its net income the following year. The result is that the buyer breaks even during the first year of ownership, despite paying a “2x multiple.” You could almost say the buyer paid a 1x multiple for the business, as they recovered 100% of the entire $200,000 investment during the first year of ownership, during which, the website also doubled in value.

How do Growth Opportunities influence website valuations?

Clearly, in order to avoid undervaluing a website, it is important that growth opportunities be considered. Of course, just because a business is growing now or has ample growth opportunities on the horizon, does not mean it is guaranteed to grow. Because of this uncertainty, growth opportunities need to be valued on a scale. The greater the opportunities for growth and the greater the likelihood the opportunities will actually be realized, the more the scale should be tipped towards a higher website valuation multiple, and vice versa. Lastly, it’s worth mentioning that investors in this industry value results, “potential” is rarely enough on its own to warrant a sizable valuation.

Does business model influence website valuation?

In its 2015 Website Buyers Report, due diligence firm Centurica researched and analyzed public website sales data to determine the average multiple paid for websites by business model from 2014 to 2015. Although this data may be slightly skewed (as it was based on Asking Price & not necessarily Selling Price), the average website valuation multiple was 2.9x for Content, 2.8x for SaaS, 2.72x for Transactional, 2.7x for eCommerce, and 2.2x for Services.

Average Multiple by Business Model
(Source: 2015 Centurica Website Buyers Report)
Average Multiple by Site Type

The above results seem to line up with the industry standards for website valuations, which typically fall between 1x and 3x annual net profit. Within that range, business model certainly seems to have a significant impact. For example, Service based businesses typically have the lowest multiple of any business model. Why is this? They often have low barriers to entry and are heavily dependent upon human capital which greatly increases investment risk. On the flip side, business models with a high-degree of automation and high barriers to entry, such as Content and SaaS, tend to be valued higher on average. Based on these results, a better question than “how much is my website worth?” might be “how much is my business model worth?”

How to Evaluate the Risk of a Website Investment

We know that size influences risk, we know that growth opportunities influence risk, and we know that business model influences risk, but what other factors influence risk? And, how do we know how much risk warrants a 1.5x multiple website valuation vs a 3x multiple website valuation? The truth is, there are an almost infinite number of variables that influence risk. Luckily, it’s not necessary to evaluate every single factor to arrive at a logical valuation. Instead, all that is required is a structured diagnostic appraisal of the business, its environment, and its growth opportunities.

This can be accomplished through a combination of both qualitative and quantitative analysis and reasoning. We can break down this analysis into five key areas of website valuation: Business Overview, Financials, Traffic & Users, Operations, and Vertical.

Within each category we want to evaluate growth opportunities, sustainability, and strength.

Business Overview

  • How old is the website?
  • What is the primary business model?
  • What was the site’s total revenue over the trailing twelve months?
  • What was the site’s total net profit over the trailing twelve months?
  • How many total users did the site have over the trailing twelve months?
  • Any notable assets attached to the sale (i.e. social media accounts, IP, etc.)?

Financials

  • Is revenue diversified?
  • What is the YoY or MoM net profit growth rate?
  • Has the rate increased, decreased, or flattened since the previous period?
  • How is revenue trending over the previous 3/mo to 1/yr?
  • How is net profit trending over the previous 3/mo to 1/yr?
  • How are expenses trending over the previous 3/mo to 1/yr?
  • Are sales expected to grow, decline, or flatten over the next 3/mo to 1/yr?

Traffic & Users

  • Is traffic diversified?
  • How stable is traffic overall?
  • What are the main traffic sources?
  • Is there a subscriber/customer list?
  • If so, what is the current growth rate?
  • What is the current customer churn rate?
  • What is the lifetime value of a customer/subscriber?
  • How have users trended over the previous 3/mo to 1/yr?
  • How have pageviews trended over the previous 3/mo to 1/yr?
  • How would you classify user engagement (low, moderate, or high)?
  • How difficult will it be to transfer each traffic source to a new owner?
  • Is traffic expected to grow, decline, or flatten over the next 3/mo to 1/yr?

Operations

  • Categorize the transferability of operations (easy, normal, difficult)?
  • Are there any employees or freelancers, and what are their responsibilities?
  • Categorize the strength of the current supplier relationship (weak, medium, strong)?
  • Is it necessary to keep inventory in a particular location to retain current profitability?
  • How many hours a week are required for the owner to operate the business currently?

Vertical

  • Has this vertical been historically volatile?
  • How would you characterize the barriers to entry (nonexistent, moderate, heavy)?
  • How saturated is this vertical (Unsaturated, Moderately Saturated, Very Saturated)?
  • How is the business performing relative to competition over 3 months, 6 months, a year?

This list is by no means exhaustive, and the process is admittedly subjective and up to a fair bit of interpretation. You may discover another format that does a better job expressing the website value of your particular business, which is perfectly fine. Simply use this as a foundation, and expand your valuation prompts from there.

Step 2 Determine Multiple: Use the following website valuation sheet to analyze your business and arrive at a multiple. Hint: If you get stuck, try moving to the next step and working backwards by valuing comparable websites that have already sold, and then compare these businesses to your own.

Where can I find comparable website sales data?

Historical sales data can often be a great source of insight when trying to value a website, as this data can help establish realistic price expectations and benchmarks. Flippa has the largest active database of website sales records. Some of this data is available to the public via the Just Sold page.

To get started, visit the Just Sold page and set the business model equal to the business model of the website you are evaluating. After you have done that, enter a range for the Website Age, Monthly Users, and Monthly Profit similar to the following:

  • Your Website Age +/- 1 year
  • Your Monthly Users +/- 1,000
  • Your Monthly Profit +/- $100

If you had a 4-year-old eCommerce site with $1,000/mo profit on top of 10,000 users/mo, you could try the following search:

  • Business Model: eCommerce
  • Website Age: Between 3 & 5 y/o
  • Monthly Profit: Between $900 & $1,100 Monthly Profit
  • Monthly Users: Between 9,000 & 11,000 Monthly Users

Depending on the results you may need to either expand or shrink respective ranges in order to find a suitable match. The overall objective is to hone in on 1-3 similar website sales that you can use as a guidepost for determining the value of your website.

Step 3 Assess Historical Website Sales: Find 1-3 historically similar website sales.

Key Challenge: Lack of publicly available website sales data

One major challenge to assessing historical sales is simply a lack of available industry data. Even on Flippa, which is unquestionably the largest platform for buying and selling websites, many users choose privatize website sales data. Further challenges arise when we consider website brokerage sales, which currently make up the broad majority of upper-five, six, seven, and eight figure deals, but for which publicly available data is extremely limited. This is yet another reason it is highly recommended that you consult with a broker prior to a sale, as legitimate brokerages such as Deal Flow will have access to extensive private sales data.

Getting a Second Opinion

If your site is making more than $1,000/mo profit consulting with a qualified website broker to get a no strings attached professional website valuation is almost always a good idea. Website Brokers specialize in analyzing and evaluating web properties and often have many years of professional experience. Additionally, business owners sometimes let passion cloud their value judgement, and because of that, if you are valuing your own site, it is usually recommended that you get a second (and sometimes even a third & fourth) opinion to ensure your value analysis is in the same realm as industry experts.

Top benefits of Professional Valuations:

  • Always free
  • Performed by experienced professionals
  • Use comprehensive website valuation methodology
  • Have access to thousands of private high-end sales records
  • Can give insight into sale options and offer help with exit planning

Website Brokers are generally regarded as the professionals best qualified to provide website valuations. Led by Director of Brokerage, Jamie Toyne, Flippa’s high-end website brokerage Deal Flow is a leader in providing professional valuations. The high-end brokerage valuation methodology is more complex than the fundamental techniques being mentioned in this article. For example, our Deal Flow Website Brokers analyze over 200 variables and use advanced business modeling techniques while performing website valuations.

Step 4 Apply for a Free Valuation: Get a free professional website valuation from an experienced Website Broker here.

Be aware of inflated website broker valuations

While legitimate website brokers have the necessary knowledge and experience to provide professional website valuation services, it is important to remember that they have an incentive to provide inflated valuations. Brokers provide free website appraisals as a form of lead generation. Oftentimes dodgy brokers will offer up unrealistic valuations, whether or not it is realistic to sell, in order to lock sellers into unnecessarily long representation agreements.

The truth about automated website valuations

Numerous sites provide automated website valuations. In addition to missing the human element that lends credibility to professional website valuations, most automated tools neglect critical data including financials, traffic, etc. in their valuations. The bottom line is that these sites are terribly flawed and inaccurate. To highlight this point, consider the chart below which compares four automated website valuations produced by popular automated valuation provider SitePrice.org, with the actual Flippa sales price below.

Table: Automated Website Valuations Vs. Actual Selling Price

SitePrice.org valuations proved very innacurate, with each accounting for just 4% – 7% of the actual selling price.

Exit Planning

Now that you have a professional website valuation, you may want to start planning an exit. Rather than a rushed sale of your business and its assets, exit planning is based on the idea that an exit should be meticulously planned and executed at the optimal time, so as to encourage the highest possible sales price.

Exit Planning & Pulling it all Together

The graphs above assume that both businesses were put up for sale in March 2016. Despite the business on the left having a Cash Flow of $67,000+ (TTM), the owner’s decision to shut the business down in October will likely result in a selling price of less than 0.5x, meaning this missed opportunity could end up costing the owner over $100,000 via a lower sales price. Conversely, the business on the right is well-positioned for sale, with strong, consistent, and stable financial performance over the trailing twelve months.

To plan for a successful exit, ask yourself three questions:

1. How much is my website worth?
2. What is my target selling price?
3. How can I achieve my target price?

Because internet businesses can change so rapidly, buyers typically place a particularly strong emphasis on recent performance. If your revenue is on the decline or your business is seasonal and sales have been flat, now is probably not the optimal time to sell. Patience is crucial. Determine what you need to do to increase your website value and achieve your target selling price, and then put things into action to ensure you can actually achieve that target.

Of course, some people simply find themselves in a position where they have no choice at all but to sell without a well thought out exit plan, and the consequences can be serious. As such, if you are fortunate enough to have the opportunity to plan an exit in advance, then it is highly recommended you consult with a qualified website broker and always keep an up to date exit plan in your back pocket.

Step 5 Develop an Exit Plan: If you have a website earning more than $1,000/mo profit and you would like to set up a free exit planning consultation, please get in touch.

Closing

If you have finished this guide and completed all of the steps above, you should be well prepared to exit your business with clear price expectations and a strategy to ensure you get the maximum sale value possible. Don’t be discouraged if you’re still feeling a bit unsure, just get started. The more practice you have evaluating different websites the more effectively you’ll be able to perform website valuations.

I hope this guide has succeeded in empowering you to uncover your website’s value and achieve a satisfactory target selling price. Let me know your thoughts in the comments below!