Comments on: What’s The Value Of Your Web Business?

By: Naomi

Naomi — Thu, 30 Sep 2010 11:38:53 +0000

I am setting up a website business with a business partner and we are trying to finalise our Partnership Agreement. This agreement has to state how we would calculate out the value of the company if one of us dies or retires, so that the other way can buy out the other’s share and continue the business.
This is very different from selling a business where you get what the market would pay. If something happens to me, I would want my partner’s share to be affordable so that she can continue the business.
Any ideas of what provision could be put in a Partnership Agreement? Should it be put in the hands of a prof valuer in such a situation? If so, who does this?

By: The Weekend Reader: Sunday Late Edition

The Weekend Reader: Sunday Late Edition — Fri, 27 Aug 2010 13:40:54 +0000

[...] What’s The Value Of Your Web Business?: "Traditionally, the net worth of a brick and mortar business is the value of the assets owned minus the value of the liabilities owed. For a traditional business — which is likely to own equipment, inventory, and possibly even a building — the standard methods of valuation make a lot of sense. For a web business, however, those methods of valuation may make little, or no sense." [...]

By: Kesha Coggins

Kesha Coggins — Tue, 19 May 2009 07:14:17 +0000

Thank for your expertise and invaluable advice. I have gained a lot from your methods. I had no idea that I was so off the mark when it comes to understanding the value of a domain for starters. I am much wiser for the knowledge.

By: Paul Leach

Paul Leach — Tue, 19 May 2009 01:18:50 +0000

Hi Laura,

I am currently trying to value a web business that I have owned for about three years. Having sold several bricks and mortar businesses in the past I just wanted to echo your view that web business valuation is a very different.
I think that the boom in internet use has driven web business valuation much higher than traditional businesses. I intend to test the market with a figure based on a multipler of income, as with most sales the market will let you know if the price is too high!

By: EasyProfitPack

EasyProfitPack — Tue, 04 Nov 2008 09:00:51 +0000

This was an interesting approach, I have been trying to determine the value of my site and it has not been easy. As you said, it is all intangible.

Well I think in the end, there are ways like you mentioned, and it is important to seek as much help as possible to get an estimate.

By: Laura Spencer

Laura Spencer — Mon, 03 Nov 2008 20:27:49 +0000

Hi Beau!

Great example! I’m sure that the problem applies to most freelance business – but blogs are an obvious case.

By: Beu

Beu — Mon, 03 Nov 2008 19:28:54 +0000

Another issue to think about when selling a web based business is how much of the business depends on you, the owner. You will likely sell your business for less if it is highly dependent on you.

Using blogs as an example
Two blogs have the same traffic and ad revenue, but one has ten writers and the other has one writer who owns the site. It will be easier to sell the site with ten writers because it isn’t dependent on one person. I would be worried about buying a blog with one writer/owner because the business is completely dependent on that person. His customers might not like the change in ownership, the new person’s writing style, ect…

By: Laura Spencer

Laura Spencer — Sat, 01 Nov 2008 22:26:49 +0000

Thanks Brandon. I hope that your sale went well.

As of now, as far as I know, there’s really no standard for selling a domain other than what the market will bear.

By: Brandon Cox

Brandon Cox — Sat, 01 Nov 2008 18:51:24 +0000

I just recently sold a site and had to think about this for a long time. How much could I potentially earn over the next year or so? What is the domain worth? What is the design worth in terms of the time I’ve spent on it? It’s a complicated issue. Thanks for addressing it and offering more food for thought.