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What would you pay for Online Business that can net $20K+ per month?

by sdentrepreneur
11 replies
I spent 18 years in the auto repair and gas station industry. If the gas station business made $100K per month, we would multiply that by 3 and sell/buy that business for $300K. These were not turn key businesses either, you would have to market them and had lots of competition.
Now that I have been in Internet Marketing for over two years, I see a completely different business model. What would you pay for a Internet Business that would net $240K per year?
#$20k #business #internet marketing #month #net #online #online business #pay
  • Profile picture of the author Simon Royal
    For me it would depend on what the business model was and the longevity of the products or services offered, how much room for growth there is and how long it has been established.

    Probably 6-10 months of earnings.

    If I had that much money, or an existing business making me that much I would probably not sell it.

    Just my thoughts.

    Torrance
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  • Profile picture of the author rapidscc
    Last year, I read that for membership sites you'll multiply monthly earnings X 36 months.
    I forgot where 12 and 24 months apply..

    However, that figure should have changed by now..so why don't you check out the other sites similar to the one you're about to purchase and ask them how much they would sell. Ask several to get an idea of the going rate.

    I assume the seller already has a price set but most probably it's bloated..

    All the best,

    Omar
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  • Profile picture of the author Quentin
    The keyword in your statement is "can net".

    But it would very much depend on the history and products they were selling.

    Lots of membership sites have a history of very poor retention so I think what Omar said would be very rare that anyone would get those sort of prices. Not saying they don't but just it would be very rare.

    Just remember most IM businesses are based on goodwill so that drives the prices down a lot. The big money is paid because of the size and integrity of the data base associated with that business.

    Quentin
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  • Profile picture of the author Troy_Phillips
    I have a new membership site that could rake in $25,000 a month.

    This would depend on the amount of time and money you want to spend on the site .

    Will sell for $23 OBO

    Existing records would have to be truly transparent and go back for a while before I would consider offering over 10% . You can tell if the supposed stats are anywhere near correct by the response you get in return.

    I would expect no response and build my offer from there .
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  • Profile picture of the author sdentrepreneur
    Originally Posted by Mr. Goof Off View Post

    The grass always seems greener don't it?

    I am actually interested more in your methodology/business model of buying and selling businesses. In any case, I am sure there are several ways to net $240,000 a year. The membership route requires you to either have very hot content or preferably an actual physical product to ship out. Wait, on second thought, if you had a directory for businesses buyers in a specific niche, that would net you $240,000. However, you would need to do some direct mail and perhaps some PPC to attract buyers and sellers. Another, route is buying and selling websites on a large scale. I see your already doing something online, so, I am sure you can investigate how to go about making it work for you.

    Either one of them is probably a good bet
    I have an online business model right now that is earning that kind of income but it is very difficult getting people to understand the value. It's a work in progress.

    PM me for details if interested.
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  • Profile picture of the author DogScout
    Car dealerships used to go for 3 years of the net in sky!
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  • Profile picture of the author S3Ware
    Often in the offline business world, a business will be valued at a multiple of earnings before interest, taxes, depreciation and amortization (EBITDA). Sometimes a business with recurring revenue (subscribers, contract-based accounts, etc.) will be valued based on a multiple of recurring monthly revenue (RMR). It's difficult to apply the same metrics to the Internet because, as others have suggested, things can change very quickly. If the monthly revenue is based on subscribers or continuity programs, there is a predictable revenue base, and therefore it's easier to place a value on the business. Otherwise, it becomes difficult to valuate because of the unpredictability of Internet-based businesses. All that being said, I would agree that somewhere in the range of 3-5 times monthly profit would be a reasonable expectation for the hypothetical you present.
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  • Profile picture of the author WD Mino
    Interesting way to market James. I know what this is about even if others don't

    -WD
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  • Profile picture of the author gautam42
    Congrats James way to go.....What is this you are marketing.......can you not talk to the market exchanges & put it up for sale & invite offers........
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