Is there a standard formula for determining how much to pay for a website?
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I am interested in buying websites.
However, from my search, there are so many sites for sale out there with a lot of sellers asking way too much for their sites. Some of these sites do not even have any history of revenues. The sellers are so enamoured with their sites that they have this magic number they want for it. Any good business transaction only results in a fair price that works for the buyer and seller. It's not a one way street!
I am only looking at buying established websites with a history of reveneues.
My question is: Is there a standardized formula in deteremining a fair price to pay for a website that has some history of revenues?
Some people say, to project 1 year of gross revenues, others say 2 or even 3??? Most sites for sale now only have a few months of established revenues. My business experience would tell me that that based on only a few months of revenues, a fair price would only be 1 year's projected earnings.
Re: Is there a standard formula for determining how much to pay for a website?
This is one of the age old questions. Where to start. I would start with what do they do and is it going to be profitable for you. How complicated is the site? ie. shopping cart, php, html, database and such. I guess as a business owner we use our site as a test project for new recruits but if we sold our site we would sell based on many different factors such as patent rights. We cant patent the .com but the name hopeful pc is patented so then the value would go up because your buying a business not a site. I would if I were buying take the time of activity and do it in 6 month chunks, ie. 6months = 1 year.
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