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Because websites are considered "cyber
assets" and not a true, real, in front of your face "asset"
they are never priced like your traditional store front mom and pop
business. The unspoken or unwritten rule of law..in terms of valuing
online businesses can be summed up within these 4 areas....
1- Years Online
If a business has been online generating income for over a year this
is good..any less is a bad investment given the ever changing mood of
the search engines.
2- Monthly NET income
..not gross, but NET. In addition..how many months has it been earning
this NET income...1 month..its not worth 20% NET. over 10 mths...now
we can can start talking about taking that net and multiplying it by
x amount of months..
3- Competition
Its great to be making 4000/mth net from a credit card site, but the
competition is fierce..very fierce, and given the moods of a search
engine..with tons of competition you are never guaranteed your position
or income. Its a slippery slope when your industry is highly competitive.
4- Organic Traffic vs Paid Traffic
Consistent organic traffic for more than a year = more money for your
site..this is the most important factor when pricing a site. Is it established
in the search engines..does it have trust rank...if the site has been
receiving organic traffic that’s consistent for over 18 mths..this
is very valuable..for every year of consistency...up the price. If 80%
or 100% of your traffic is paid traffic, this lowers your sites worth..simply
because someone else can come and take away a % of your market share
within 1 hr of designing a website related to yours.
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