There are many means to estimate the value of your own website. From calculating the value of each unique visitor to your website to discovering a sales-earnings multiple to be used to generate a fair asking price based on profit, there are a myriad number of options for estimating your website’s value. These methods, however, oftentimes require individual effort and labor that might simply be unavailable. After all, running a successful website or online business can be very time-consuming, and time is money. Luckily, there are 4 tools you can use to simplify this process.
Unsolicited Bids as a Minimum for Estimation
One of the most fundamental economic laws is the law of supply and demand. Whenever there is a limited supply of commodity and a high demand, the seller can raise the price, as buyers will be willing to pay more. You might think that your website is unique because you put hours of blood, sweat and tears into building it from the ground. Unfortunately, there are millions if not billions of websites out there and many of them are offering the same services, goods or information as you. If you’ve been able to separate yourself from the herd, however, and create a highly trafficked, recognizable and profitable website, then you might have created a demand for your website.
If enough demand exists, you will likely have received an unsolicited offer for your website or domain. These firms may ask for financial data, proprietary information or other information. Don’t give it to them. Much of what they ask could be used by not-so-trustworthy competitors to harm your business. Further keeping this information private and “teasing” the bidders can help increase demand.
Your best option, however, is if you received a single offer to use it as a minimum value of your website. Better yet, if you have received multiple offers, you can generate a number of important statistics, including a fair range of values, an average of those values and other such things as they prove pertinent to your individual needs.
Analyzing the Value of Other Websites
Luckily, if you haven’t received any unsolicited offers, you can still value your website quite easily and with little effort. For example, use free lists from sites such as Flippa to examine what websites in your niche are currently selling for. If you have any unsolicited offers, you can also compare these rates to what is fair given current market conditions. If your website is being undervalued or overvalued in the market, you can attempt to find out why and either change business operations and marketing strategies to increase value or continue current profit-incurring policies and campaigns.
Now the market can only tell you so much, especially if you don’t have any unsolicited offers from potential investors. Understanding what people are willing to pay not just for another website in a given niche market but your website in particular is important. Ultimately, if you treat your website like just another commodity, then it will sell like one. But if you treat it as a prized piece of merchandise, then you have a much better chance of upselling during final negotiations. Having at your disposal a list of offers, whether unsolicited or solicited, is a means of showing to a potential investor that there is interest into your website and that it is not just another commodity. You can even go so far as to explain why these other investors are undervaluing the business and why you should receive more than what they’ve offered.
Flippa offers a classifieds list that you can use for free to help begin soliciting offers for established sites, starter sites, domains and apps.
There are many sources that will value your website for you. Digital Exits is one the leading website brokers on the market today and will value your website for free. They only make money if you decide to use them to help you sell your business. And even if you don’t, you still have a professional value placed upon your business that can be used if you wish to sell your website privately. Stay away from automated calculators; they will not produce a true value for your business. Stick with the professionals not the arbitrary number-generating machines when estimating a value for your website.
This is a list of basic tools to estimate the value of your website that will help you save time and effort that you might not have. There are, of course, other methods for estimating a value for your business that are more time-consuming but worthwhile.