Tip - Revenue Multiple and Comparable Sales determines the value

Revenue Multiple – You have most probably heard the statistic that most businesses sell for 2-3 times earnings. Basically a buyer will take the current net profit of the website for the past twelve months and then multiply it with an earnings multiplier to get a final valuation figure.

2. Comparable Sales – Buyers will use this method if there is sales data available for similar websites. They will then adopt a similar valuation and make an offer based off that.

3. Asset Value – sometimes buyers will ignore the revenue of a website and instead look at the assets of the site (the customer list, or email database) and make a calculation on that instead.

By Jock Purtle