Who would I seek to find out the value of a small online business?
Ok, so I have a customer inquiring about purchasing my business. I have no idea what my business would be worth, how do I find that out?
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There’s no one rule, especially in small online businesses with few physical assets. The short answer is it’s worth whatever it’s worth to you and you should ask for a price that would make you happy you sold it.
If you have a desirable domain name, there are different tools that calculate an approximate value based on a number of factors, so that could be one piece. (search “domain value”)
If you have custom software (including a web site or web app) you can figure how long it would take to construct something similar and figure that in to the value at an hourly rate.
If you have inventory or other physical assets (servers, packing supplies, existing contracts, etc) you’ll want to figure those in to your price as well.
Also figure something for your time to transfer everything over to the new owner, make it very clear what they’re getting.
Customer information can be worth quite a bit, but you want to be especially careful in how you transfer that and make clear about how they can use the information once it’s transferred. If you have a terms of service, make sure you follow that (and they will as well) before passing anything over. Usually it’s nice to alert people that you’re selling the company and how their information would be used by the new owners. Give them a chance to opt out and you’ll go a long way to alleviating any possible problems.
But that’s getting further from the question. I would come up with a number that would make me happy to walk away from the business and possibly consider what you would do next with those funds and free time. Then add a bit to that because they’ll probably try to negotiate and your final price will be lower.
Congrats on building something someone sees value in. I hope it goes well.
I think you’re also supposed to factor in the profitability into the mix. If you have a company that generates $100,000/year I believe you’re supposed to build in at least a couple years worth of projected profit into the sale price. Ultimately, @funkdaddy is spot on though, that it comes down to what you’re willing to accept to part with it.
Get some estimates from business real estate agents.
Thanks @funkdaddy you are right on with customer data. Often time for certain companies the data and qualified traffic the site already gets can be worth more then the website its self.
You can use a software to valuate your business prior to speaking with anyone. Check out this list of software for more info.
Also, you can ask other people you know that have sold a website similar to your own, what valuation multiple they used to calculate the value of their business.
I have never sold a web based business before, but I would suggest searching online:
Best Internet business brokers – List of website business brokers. Call them up and pay for a single consultation.
Seriously, congrats with having something of value. And good luck.
Peace.
Thanks for the info guys/girls , after reviewing it I’m not selling
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