pricing a domain / website
I have the chance of obtaining a website that I have had my eye on. Trouble is owner says "make me an offer" which I HATE as I never know where to start!!
Site is now down but he says it's backed up. I would totally redesign and upgrade it anyway, but I have asked him if he still has the membership list and how many members, plus if he earnt money from it. He says it had about 1000 visitors a month.
So, how do I guage a ball-park figure to offer? Or is that question a bit like how long is a piece of string?
Jill
Smp Business Hosting posted this at 06:12 — 4th October 2007.
They have: 60 posts
Joined: Aug 2007
Hi Jill,
Yes it is a little like asking how long is a piece of string.
The biggest factors when pricing a site or business is a) turnover and profit b) quality of users/ customers c) how long it has been established d) monthly visitors & unique visitors e) reason for sale and the list goes on. But really it's only worth what a buyer is willing to pay after looking at the factors.
I have a rule of thumb that I won't buy a business for more than 1 years turn over if it is in very good standing and no more than 1 years profit if it will require renovation to make it work or stable. Turnover is vanity profit is sanity! I want to make my money back as soon as I physically can so the cheaper the better, but if I go too cheap I could loose the sale.
Without knowing an awful lot about it, it would be hard to put a price tag on it.
My best advise is find out as much about it as possible and try to get as much proof as you can to back up his claims e.g. webstats ect. Then make a modest offer that you are willing to pay. You're making an investment in it, how long do you want to wait until you get your return and how long will it take you to get it?
babrees posted this at 06:48 — 4th October 2007.
They have: 7 posts
Joined: Sep 2007
Thank you - that is perfect! I am just waiting for him to come back with figures of earnings and membership and confirm visitors - that's all I'm interested in as I will be totally redoing the site.
Cheers!
Jill
Smp Business Hosting posted this at 07:33 — 4th October 2007.
They have: 60 posts
Joined: Aug 2007
You are more than welcome.
Just make sure that you find out both his turnover and profit, the turnover is trivial without knowing the height of expenses. Some companies have a turnover in the millions but make little profit hence the saying "turnover is vanity profit is sanity".
Also I forgot to mention in my last post that the value of assets play a big part in the equation this includes the domain, script and anything else that comes with the deal.
If you have any further questions feel free to fire away or PM me.
Regards, Steve
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