What is my business worth?

mejohn · 10-13-2009, 10:35 AM

I have never sold an online business before. My business is an environmentally friendly Niche. It has top Google rankings for almost all the keywords & tailing keywords. Sales average a little over $4,000 per month with no advertising, except for a few blog giveaways.

What is my business worth?

mejohn · 10-13-2009, 02:26 PM

Depending on the offers, I would be interested in selling it. It has 16 pages of content and averages more than 150 visitors per day. It is a growing market with great exposure in Europe, and just beginning in North America.

nicholl08 · 10-13-2009, 02:28 PM

Hey mejohn,

It depends on many more factors than you've presented here.

An online business should be worth a minimum of 12x monthly multiples - some websites are many years multiple.

Two things that will greatly effect the price is 1. how much work is required for this website - margins on product, customer service, etc. and 2. how much room for improvement there is.

Addressing point 2, many people see an SEO optimized website as a benefit because it (can be) steady traffic. However, others consider it to be a disadvantage, because they would rather find a website that is not currently receiving the full benefits of SEO, and bettering it.

WORD.

mejohn · 10-13-2009, 02:41 PM

Quote:

Originally Posted by nicholl08

Hey mejohn,

It depends on many more factors than you've presented here.

An online business should be worth a minimum of 12x monthly multiples - some websites are many years multiple.

Two things that will greatly effect the price is 1. how much work is required for this website - margins on product, customer service, etc. and 2. how much room for improvement there is.

Addressing point 2, many people see an SEO optimized website as a benefit because it (can be) steady traffic. However, others consider it to be a disadvantage, because they would rather find a website that is not currently receiving the full benefits of SEO, and bettering it.

WORD.

Thanks Nicholl08,

The work is minimal right now. Maybe 1 hour per day maximum to package and ship products and talk with customers. Margins currently range from 125% to 150% on wholesale orders and 500% to 600% on retail orders. If a person were to run this business out of a sea port city, the costs would be cut by at least 25% due to shipping costs, brokerage fees, etc. We run the business out of Melfort Saskatchewan, Canada, which is as far inland as you get.

mejohn · 10-13-2009, 03:12 PM

The website will be 2 years old in Januaryish. My wife & I built it from scratch.

spazz896 · 10-13-2009, 06:53 PM

PM with more Details

mejohn · 10-13-2009, 07:40 PM

The PM with details are sent.

OMI · 10-13-2009, 09:05 PM

It looks like you are selling a physical product or products, which probably involves purchasing, packaging, shipping, etc.

Do you have any competitors? Do you sell from any type of physical location (tradeshows, swapmeets, etc.)? What about ebay? Do you sell from your own domain name?

What is the cost of the product you are reselling? How much is shipping?

Your sales maybe over $4000 per month, but what costs eat into that amount after purchasing, packaging, and shipping? Are their any other costs (insurance, etc.)? What, if any, is the return rate and the process that is used to return the product and ship them another?

Questions like these should all be considered before selling, because buyers will certainly ask before investing in something that's fairly vague.

Congrats on your success and I hope you find a buyer and a good price.

mejohn · 10-13-2009, 10:59 PM

If you are interested in purchasing the business, I will PM you the details. I just don't want all the detail to be on the web for the whole world to see.

Becker · 10-14-2009, 12:02 AM

As the others have mentioned, there are a lot of factors to consider. I'd recommend caution in just using "rule of thumb" methods to determine value... it's not that these rules are without purpose, but they can wildly over- or under-value your business if you don't make the right adjustments and try use them as your only metric. There are also some online calculators that can help get you very, very rough estimates.

If you are really serious about knowing how and what your business is worth in possible preparation for a sale, you might consider getting a professional business valuation. There are firms that just do professional business valuations, but they are probably going to charge you a lot more than makes sense given some of the figures you have provided.

While it's not something I typically do on a stand-alone basis, I do perform business valuations as part of an overall process to help people sell their business "for sale by owner at Fixed Price Business Brokers. I'd be happy to give a fellow Warrior a substantial discount in exchange for a reference, just PM for details.

timosai · 10-14-2009, 12:14 AM

i thought valuations were 10x minimum not 12x???

Ming12 · 10-14-2009, 01:53 AM

wow, details is in need.

mejohn · 10-14-2009, 11:21 AM

Another thing about the business is that it ranks well for the wholesale and bulk niches of the market worldwide on Google. I have not yet explored these venues, but it could very easily be worked into an international business.

fabcsaby · 10-14-2009, 04:17 PM

Hey,
Are you planning to sell it? If now you make $4k/mo, without advertising, you can make much more money if advertise your website, adding more content and creating more backlinks.

mejohn · 10-14-2009, 04:24 PM

Quote:

Originally Posted by fabcsaby

Hey,
Are you planning to sell it? If now you make $4k/mo, without advertising, you can make much more money if advertise your website, adding more content and creating more backlinks.

I'm seriously looking at selling it. Whoever would purchase it would have great potential for growth.

alliance · 10-14-2009, 05:03 PM

Please send summary of your business sale offering.

Thanks

Wealthyclark · 10-14-2009, 09:00 PM

Quote:

Originally Posted by mejohn

If you are interested in purchasing the business, I will PM you the details. I just don't want all the detail to be on the web for the whole world to see.

If your looking to sell the business why are you afraid of having the details public for the world to see. Many of the largest businesses in the world have their financial details public.

I'm not trying to bash you but this makes it seem that you don't want professionals to expose you to less professional buyers.

Just make it all public, you'll get a better response rate and maybe even someone willing to pay your target price or more

mejohn · 10-14-2009, 09:11 PM

I guess my main concern is that none of my competition have their financials exposed. I do not know what they pay for their products, and I don't want them to be able to find out what I pay for mine. I am willing to give every detail to buyers who are seriously interested.

Wealthyclark · 10-14-2009, 10:02 PM

Quote:

Originally Posted by mejohn

I guess my main concern is that none of my competition have their financials exposed. I do not know what they pay for their products, and I don't want them to be able to find out what I pay for mine. I am willing to give every detail to buyers who are seriously interested.

My advice would be to only hold back those details, it doesn't matter if the comp. knows what you pay the thing is to hide where you get your products.

BestNoMoneySystem · 10-14-2009, 11:37 PM

My question would be is are the sales $4K/month or is profit 4K/month?

Quote:

Originally Posted by fabcsaby

Hey,
Are you planning to sell it? If now you make $4k/mo, without advertising, you can make much more money if advertise your website, adding more content and creating more backlinks.

mejohn · 10-14-2009, 11:48 PM

The profit is roughly $3k per month, but varies depending on levels of wholesale and retail sales. Retail sales are higher in the winter months and wholesale sales are higher in the spring/summer months,

mark z · 10-14-2009, 11:55 PM

Quote:

Originally Posted by Wealthyclark

If your looking to sell the business why are you afraid of having the details public for the world to see. Many of the largest businesses in the world have their financial details public.

I'm not trying to bash you but this makes it seem that you don't want professionals to expose you to less professional buyers.

Just make it all public, you'll get a better response rate and maybe even someone willing to pay your target price or more

Sounds like reasonable request.

Quote:

Originally Posted by mejohn

I guess my main concern is that none of my competition have their financials exposed. I do not know what they pay for their products, and I don't want them to be able to find out what I pay for mine. I am willing to give every detail to buyers who are seriously interested.

Sounds like reasonable answer. lol
Fair enough.

Seriously, I think I understand mejohn as everyone of us behave protective to something that we build from scratch, right?

Cash37 · 10-15-2009, 05:44 AM

Roughly 10x revenue

Vijay M · 10-15-2009, 07:40 PM

Could you please PM the niche,the organic traffic and your present method of traffic generation.

Also, can the product be dropshipped or should an inventory be carried at all times?

Thank You.

MissDarling · 10-15-2009, 08:18 PM

Here is my question:
I duplicate a local site that pulls in $400 monthly in the local market. Do I sell it for 12 x $400? That seems like a lot of money. I ask because I know that I often under-price my services.

Should I also just buy the domain name for the area I want to target and include that in the package?

With this sort of offer, should a basic hosting plan also be included?

websitebroker · 11-17-2009, 12:00 PM

I am new to the forum but an online veteran and an internet business broker specialist. The value of your business is going to come down to your net cash flow in combination with your online fundamentals such as traffic, SEO, domain name, business model, margins, barriers to entry, age of site, traffic, revenue and profit trends - year over year and month over month. Average quality sites with some age - at least 2-3 years sell for 2- 2.5 times net trailing 12 months profit. Higher quality older sites with strong fundamentals, growth etc will sell for 2.5 - 4 times net trailing 12 months cash flow on average.
For a free appraisal and an opportunity to sell to a high quality marketplace with sophisticated buyers, visit websiteproperties.com

10-13-2009, 10:35 AM	#1
mejohn HyperActive Warrior Join Date: Sep 2009 Location: Melfort, Saskatchewan Posts: 334 Thanks: 7 Thanked 25 Times in 23 Posts Social Networking	What is my business worth? I have never sold an online business before. My business is an environmentally friendly Niche. It has top Google rankings for almost all the keywords & tailing keywords. Sales average a little over $4,000 per month with no advertising, except for a few blog giveaways. What is my business worth?
	Soap Nuts Laundry Detergent Tea Tree Oil Google Rankings as a Chess Game Soap Nuts & Other Products

10-13-2009, 02:26 PM	#2
mejohn HyperActive Warrior Join Date: Sep 2009 Location: Melfort, Saskatchewan Posts: 334 Thanks: 7 Thanked 25 Times in 23 Posts Social Networking	Re: What is my business worth? Depending on the offers, I would be interested in selling it. It has 16 pages of content and averages more than 150 visitors per day. It is a growing market with great exposure in Europe, and just beginning in North America.
	Soap Nuts Laundry Detergent Tea Tree Oil Google Rankings as a Chess Game Soap Nuts & Other Products

10-13-2009, 02:28 PM	#3
nicholl08 Active Warrior Join Date: Feb 2009 Posts: 42 Thanks: 1 Thanked 13 Times in 7 Posts	Re: What is my business worth? Hey mejohn, It depends on many more factors than you've presented here. An online business should be worth a minimum of 12x monthly multiples - some websites are many years multiple. Two things that will greatly effect the price is 1. how much work is required for this website - margins on product, customer service, etc. and 2. how much room for improvement there is. Addressing point 2, many people see an SEO optimized website as a benefit because it (can be) steady traffic. However, others consider it to be a disadvantage, because they would rather find a website that is not currently receiving the full benefits of SEO, and bettering it. WORD.

10-13-2009, 03:12 PM	#5
mejohn HyperActive Warrior Join Date: Sep 2009 Location: Melfort, Saskatchewan Posts: 334 Thanks: 7 Thanked 25 Times in 23 Posts Social Networking	Re: What is my business worth? The website will be 2 years old in Januaryish. My wife & I built it from scratch.
	Soap Nuts Laundry Detergent Tea Tree Oil Google Rankings as a Chess Game Soap Nuts & Other Products

10-13-2009, 06:53 PM	#6
spazz896 HyperActive Warrior War Room Member Join Date: Apr 2003 Location: Mississauga, Canada. Posts: 152 Thanks: 0 Thanked 3 Times in 3 Posts Social Networking	Re: What is my business worth? PM with more Details
	Extreme List Building *** $1800 Profit? My Bloggin Help --------> BradBurnie.com

10-13-2009, 07:40 PM	#7
mejohn HyperActive Warrior Join Date: Sep 2009 Location: Melfort, Saskatchewan Posts: 334 Thanks: 7 Thanked 25 Times in 23 Posts Social Networking	Re: What is my business worth? The PM with details are sent.
	Soap Nuts Laundry Detergent Tea Tree Oil Google Rankings as a Chess Game Soap Nuts & Other Products

10-13-2009, 09:05 PM	#8
OMI HyperActive Warrior War Room Member Join Date: Aug 2008 Location: Orange County, Ca Posts: 243 Thanks: 46 Thanked 17 Times in 17 Posts Social Networking	Re: What is my business worth? It looks like you are selling a physical product or products, which probably involves purchasing, packaging, shipping, etc. Do you have any competitors? Do you sell from any type of physical location (tradeshows, swapmeets, etc.)? What about ebay? Do you sell from your own domain name? What is the cost of the product you are reselling? How much is shipping? Your sales maybe over $4000 per month, but what costs eat into that amount after purchasing, packaging, and shipping? Are their any other costs (insurance, etc.)? What, if any, is the return rate and the process that is used to return the product and ship them another? Questions like these should all be considered before selling, because buyers will certainly ask before investing in something that's fairly vague. Congrats on your success and I hope you find a buyer and a good price.
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10-13-2009, 10:59 PM	#9
mejohn HyperActive Warrior Join Date: Sep 2009 Location: Melfort, Saskatchewan Posts: 334 Thanks: 7 Thanked 25 Times in 23 Posts Social Networking	Re: What is my business worth? If you are interested in purchasing the business, I will PM you the details. I just don't want all the detail to be on the web for the whole world to see.
	Soap Nuts Laundry Detergent Tea Tree Oil Google Rankings as a Chess Game Soap Nuts & Other Products

10-14-2009, 12:02 AM	#10
Becker Warrior Member Join Date: Aug 2009 Posts: 2 Thanks: 0 Thanked 0 Times in 0 Posts	Re: What is my business worth? As the others have mentioned, there are a lot of factors to consider. I'd recommend caution in just using "rule of thumb" methods to determine value... it's not that these rules are without purpose, but they can wildly over- or under-value your business if you don't make the right adjustments and try use them as your only metric. There are also some online calculators that can help get you very, very rough estimates. If you are really serious about knowing how and what your business is worth in possible preparation for a sale, you might consider getting a professional business valuation. There are firms that just do professional business valuations, but they are probably going to charge you a lot more than makes sense given some of the figures you have provided. While it's not something I typically do on a stand-alone basis, I do perform business valuations as part of an overall process to help people sell their business "for sale by owner at Fixed Price Business Brokers. I'd be happy to give a fellow Warrior a substantial discount in exchange for a reference, just PM for details.

10-14-2009, 12:14 AM	#11
timosai Warrior Member Join Date: Oct 2009 Posts: 8 Thanks: 0 Thanked 0 Times in 0 Posts	Re: What is my business worth? i thought valuations were 10x minimum not 12x???

10-14-2009, 01:53 AM	#12
Ming12 Warrior Member Join Date: Oct 2009 Posts: 3 Thanks: 0 Thanked 0 Times in 0 Posts	Re: What is my business worth? wow, details is in need.
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10-14-2009, 11:21 AM	#13
mejohn HyperActive Warrior Join Date: Sep 2009 Location: Melfort, Saskatchewan Posts: 334 Thanks: 7 Thanked 25 Times in 23 Posts Social Networking	Re: What is my business worth? Another thing about the business is that it ranks well for the wholesale and bulk niches of the market worldwide on Google. I have not yet explored these venues, but it could very easily be worked into an international business.
	Soap Nuts Laundry Detergent Tea Tree Oil Google Rankings as a Chess Game Soap Nuts & Other Products

10-14-2009, 04:17 PM	#14
fabcsaby Joomla Expert Join Date: Mar 2009 Posts: 54 Thanks: 2 Thanked 1 Time in 1 Post Social Networking	Re: What is my business worth? Hey, Are you planning to sell it? If now you make $4k/mo, without advertising, you can make much more money if advertise your website, adding more content and creating more backlinks.
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10-14-2009, 05:03 PM	#16
alliance HyperActive Warrior War Room Member Join Date: Sep 2008 Posts: 175 Blog Entries: 30 Thanks: 31 Thanked 16 Times in 16 Posts	Re: What is my business worth? Please send summary of your business sale offering. Thanks

10-14-2009, 09:11 PM	#18
mejohn HyperActive Warrior Join Date: Sep 2009 Location: Melfort, Saskatchewan Posts: 334 Thanks: 7 Thanked 25 Times in 23 Posts Social Networking	Re: What is my business worth? I guess my main concern is that none of my competition have their financials exposed. I do not know what they pay for their products, and I don't want them to be able to find out what I pay for mine. I am willing to give every detail to buyers who are seriously interested.
	Soap Nuts Laundry Detergent Tea Tree Oil Google Rankings as a Chess Game Soap Nuts & Other Products

10-14-2009, 11:48 PM	#21
mejohn HyperActive Warrior Join Date: Sep 2009 Location: Melfort, Saskatchewan Posts: 334 Thanks: 7 Thanked 25 Times in 23 Posts Social Networking	Re: What is my business worth? The profit is roughly $3k per month, but varies depending on levels of wholesale and retail sales. Retail sales are higher in the winter months and wholesale sales are higher in the spring/summer months,
	Soap Nuts Laundry Detergent Tea Tree Oil Google Rankings as a Chess Game Soap Nuts & Other Products

10-15-2009, 05:44 AM	#23
Cash37 Senior Warrior Member War Room Member Join Date: Jul 2006 Location: North Carolina, USA. Posts: 2,099 Thanks: 148 Thanked 179 Times in 104 Posts Social Networking	Re: What is my business worth? Roughly 10x revenue
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10-15-2009, 07:40 PM	#24
Vijay M Advanced Warrior War Room Member Join Date: Aug 2007 Location: Washington DC Posts: 706 Thanks: 63 Thanked 37 Times in 32 Posts	Re: What is my business worth? Could you please PM the niche,the organic traffic and your present method of traffic generation. Also, can the product be dropshipped or should an inventory be carried at all times? Thank You.
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10-15-2009, 08:18 PM	#25
MissDarling Warrior Member War Room Member Join Date: Oct 2009 Location: East Coast, USA Posts: 20 Thanks: 0 Thanked 2 Times in 2 Posts Social Networking Contact Info	Re: What is my business worth? Here is my question: I duplicate a local site that pulls in $400 monthly in the local market. Do I sell it for 12 x $400? That seems like a lot of money. I ask because I know that I often under-price my services. Should I also just buy the domain name for the area I want to target and include that in the package? With this sort of offer, should a basic hosting plan also be included?

11-17-2009, 12:00 PM	#26
websitebroker Warrior Member Join Date: Aug 2008 Posts: 18 Thanks: 0 Thanked 1 Time in 1 Post	Re: What is my business worth? I am new to the forum but an online veteran and an internet business broker specialist. The value of your business is going to come down to your net cash flow in combination with your online fundamentals such as traffic, SEO, domain name, business model, margins, barriers to entry, age of site, traffic, revenue and profit trends - year over year and month over month. Average quality sites with some age - at least 2-3 years sell for 2- 2.5 times net trailing 12 months profit. Higher quality older sites with strong fundamentals, growth etc will sell for 2.5 - 4 times net trailing 12 months cash flow on average. For a free appraisal and an opportunity to sell to a high quality marketplace with sophisticated buyers, visit websiteproperties.com
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