How to value a website business?

[telabadmanwot]

How do you value a website that is only good for a years use?

My sons site made £1170 of profit in January, it has an android app and around 2000 social media followers. it is a travel site with affiliated sales(???) He wants to sell it.

[sorry I posted this question in the ecommerce forum by accident]

 

[Alan]

good for a years use

What does this mean? Does it mean that in 1 year the website is dead?

 

[telabadmanwot]

The site is http://2015holidays.com
I bought him the site for £4,000 and he has been working on it since 2013.

 

[Breaking Good]

If it's only good for 2015, I'm not sure who would buy it? If your son is making over £1k a month, he might be better off keeping it and continuing making money from it.

Unless you can try to sell it to someone who owns 2015holidays.co.uk or .eu etc

 

[StevePoster]

How do you value a website that is only good for a years use?

Do you mean is how much is the website? If yes, you can use siteprice.org to evaluate your site (price) as well as the website info, site visibility, social media visibility, etc.

 

[fisicx]

As it's only good for 10 months it's value is less than the money you paid for the domain name. The followers and apps are worth nothing.

 

[Alan]

So the peak time for booking Holidays is January and it earned £1170. There probably are 2 to 4 more months of active holiday booking left in the year. Lets say that the projected earning are £500 / month for 4 months.

So £2,000 of earning potential in 2015.

So maybe some one will pay £1,000.

Try flippa.com

 

[Kay]

I'm curious about the use of the word "profit" in the OP. Does it mean that sales have been £1170 more than costs for this month? And what about all the other months? If the figure is earnings rather than profit, how much did it cost to make those sales? It's also a very short time frame to try to get returns from this investment now. As someone said earlier, the domain will have outlived its purpose by the end of this year. If it really is a successful business, you could try moving it to another domain.

Does the site have any assets of any value? Presumably it had something to make you part with £4000 cash to buy it. Mostly websites (at the lower end) are valued according to how much money they can make. What was special about this one in 2013 to make it worth that much? Anything more than "potential"?

Flippa was recommended earlier - that's a good idea. There are always plenty of new people on there ready and waiting to snap up anything with "potential", even when they have no understanding of a site's real value.

 

[Alan]

My fault I used the term earnings. The OP said profit (which is income minus costs one would assume including an allowance for the operators time)

 

[telabadmanwot]

Yes the profit was 1170 in January. Not the revenue. And it would look like February's revenue will be almost double January's according to my son. He may be persuaded to keep it. But I would prefer it if he concentrated on his studies.

The site is being used for last minute deals, so the 1170 generated in January were for Holidays taking place in Feb or March. The new owner could continue to do the same or I guess use the site for something else if they see more money in it. Im still not convinced he knew what he was doing with it.

 

[fisicx]

Still not going to change the fact that it's not a long term prospect and therefore won't sell for a huge amount. If the site looks after itself then why not just let it run until December and then go get 2016holidays.co.uk

 

[Breaking Good]

2016holidays.com is on sale for £2.6k and I'm sure you could get it for much cheaper with some negotiation.

If you're making 2k profit in Feb, I'd just buy the 2016 site and replicate what's been done.

As it's an affiliate site, how much work is he actually doing on the site? I'm sure he should be able to work it around his studies

 

[Kay]

If the site is making a profit, that's great. But why buy into and perpetuate this annual obsolescence? I'd not buy 2016anydarnedholidays.co.uk, I'd buy mylovelysuperholidays.co.uk and then not have this fiasco of obsolescence every year if the site is worth keeping.

 

[Breaking Good]

If the site is making a profit, that's great. But why buy into and perpetuate this annual obsolescence? I'd not buy 2016anydarnedholidays.co.uk, I'd buy mylovelysuperholidays.co.uk and then not have this fiasco of obsolescence every year if the site is worth keeping.

I'm assuming the 2015 holidays website makes money because of SEO. Whether it was calculated, worked on or just pure luck, I'm assuming they're getting traffic from "2015 holidays" related searches.

Because of this, another generic website name probably wouldn't yield the same results. If he makes £2k until say September. That is a profit of 1 month x £1k and 8 months x £2k. Total of £17k +. Therefore a £2k investment in the 2016 site is probably a decent bet to make. The website owner is a student so it wouldn't be a bad "part time" job. Definitely beats some of the part time jobs I've had!

 

[Kay]

Why are you assuming that the success of the site is because of SEO? Is there any evidence of that?

Do we know where the traffic has come from or how it was acquired?

Why are you making these assumptions when we know very little about the site, where it gets its traffic, or how it makes its money?

As someone who joined UKBF this month (as a freebie member with a fancy promo sig), do you have an agenda to persuade people that you know how to value websites and have some experience in the buy/sell industry? I'd love to hear it.

 

[Breaking Good]

Why are you assuming that the success of the site is because of SEO? Is there any evidence of that?

Do we know where the traffic has come from or how it was acquired?

Why are you making these assumptions when we know very little about the site, where it gets its traffic, or how it makes its money?

As someone who joined UKBF this month (as a freebie member with a fancy promo sig), do you have an agenda to persuade people that you know how to value websites and have some experience in the buy/sell industry? I'd love to hear it.

...don't really understand the hostility here.

No, I don't know where the traffic has come from but this is a forum, not the High Court. I said I "assumed" indicating it is my assumption, I am not stating facts.

Secondly - is it a requirement to be a paid member to post on this forum? What has my signature got to do with anything? If you read my post - at no stage did I try to "value" the website.

So unless the thread is about promotional merchandise, I should avoid posting?

 

[Kay]

I'm not hostile. LOL. Just wondering why you make these assumptions without any evidence or reasons why you make them.

It's good that you acknowledge that you're not stating facts, otherwise some people might believe your assumptions and take them as facts. And act on them!

Sigs? Yes, that's a bone of contention that's been going on for a while. Not your problem and not mine. But some would suggest that a sig inviting others to PM is a business advert which hasn't been paid for.

 

[Breaking Good]

I'm not hostile. LOL. Just wondering why you make these assumptions without any evidence or reasons why you make them.

It's good that you acknowledge that you're not stating facts, otherwise some people might believe your assumptions and take them as facts. And act on them!

Sigs? Yes, that's a bone of contention that's been going on for a while. Not your problem and not mine. But some would suggest that a sig inviting others to PM is a business advert which hasn't been paid for.

By that logic, you would have to go around questioning everyone who posts anything on forums. My logic was based on a quick search on a couple of tools which shows the website doesn't use Adwords and ranked alright for some decent organic keywords. In any case - worry not - I'll put a disclaimer in capital letters on my post above.

I don't think anything I've said is too dissimilar to other posts on this thread.

Signature - yes it could be viewed as a business advert. However - notice I don't have my website on my sig nor my profile. Why? Because I like the freedom of knowing I can ask questions and seek advice about my business without these becoming public knowledge via a Google search. This freedom, to me outweighs the potential benefits of increased custom by displaying my details. I'm not relying on this forum to win customers and if I was politely asked to remove the sig, I would happily do so. If an admin wants to do that, then it's not a problem. I'd rather spend my time concentrating on my business than worrying about other people's signatures.

 

[telabadmanwot]

Could I please say every bodies posts are welcome on my thread. Lets not argue.

 

[Dan Izzard]

Hello all. I don't believe there to be any malice in what has been said or anything that warrants an edit so I thought I'd just add a note instead to keep things on topic. You can put what you like in your signature (an invite to a PM is fine), the bonus from full membership is a direct link(s) to a page on your site and additional characters and formatting available. Of course it would be great if you could support the forum by being a full member but that is of course your choice and interaction on threads is always number one.

Back to business

 

[PuneetJvw]

The website worth is what a person is willing to pay for it. For me it is 0; for someone else it could be 10000.

Generally I would say the value of a website is 8x to 12x (x being the monthly profit), but since your site is dead after a year, you cannot calculate the value using that method. Also there are many other factors involved in valuing a website.

Why dont you list it on flippa, other website marketplace sites and see what you can get.

Cheers!

 

[Tom @ Click Miners]

The website worth is what a person is willing to pay for it.

This.

However even with 2015 in domain name website can be modified and be used with success past 2015. You can redirect it to new, more generic domain name, or simply keep it updated with new offers.

 

[alexdigital]

Put it on Flippa with as much info as you can get. With that kind of revenue i'm sure it will sell well. The domain does have an effect for sure, but there will still be lots of value there for someone.

-Alex

 

[AmarDigital]

Congrats to your son for getting something going, sounds like he’s done a good job. In terms of a sale, not much value there. Based on my experience it would be best to keep the site – he’ll extract more value that way as it’s coming up to a busy part of the year.

 

[Jeff Nev]

I would carry on managing the website this year, you will generate a higher income.

 

[garyk]

Generally I would say the value of a website is 8x to 12x (x being the monthly profit), but since your site is dead after a year, you cannot calculate the value using that method.

Agreed, although if something is up for sale its probable that the earnings are on the slide as the current owner has lost interest so I would aim for 8-10x.

 

[Andrew Beardlsey]

Best thing to do is set up a non-date specific new site and do exactly what he did to the 2015 site.
It does not look complex so shoud be relatively easy to reproduce or get a coder to do it.
Its the niche and the model that are good

 

[JamesBarnsley]

"He may be persuaded to keep it. But I would prefer it if he concentrated on his studies." If it made him over £1000 profit in Jan and more in Feb. It may be definitely worth hanging onto, it is very difficult to make any money from websites at all let alone £1000 in a month.

Why not just buy a more generic domain name without the year in it and then keep the 2015Holidays and funnel the traffic to the new domain name?

 

[Cromulent]

Why not just buy a more generic domain name without the year in it and then keep the 2015Holidays and funnel the traffic to the new domain name?

This is probably the best idea. Keep the original site and start funnelling traffic to the new one. You could do it on a percentage basis so you could do A/B testing to make sure the new site converts well. So perhaps move 25% of visitors to the old site to the new one and keep the other 75% on the old site until you are sure the new site is converting properly.