Would You Sell Your Site For 5x Its Yearly Profit?

That is the question we had to ask ourselves today. You see one of the great things about getting websites that are completely automated and have big upside is that they become high demand websites.

Typical website value can be anywhere from 10 months monthly profit to 3 years profit. Most of the stuff we see (and every website we buy) falls into the lower end of the site value spectrum.

So we were surprised to see an offer come in for one of our sites that was 5 years worth of profit. The company wanting to buy our siteĀ  has spoken to us before but we have always told them that we know the upside of the site and we weren’t ready to sell yet.

We asked them to make us an offer that we couldn’t refuse and that is what they came back with. Seeing that someone else valued a website we run so highly gave us the confidence that what we were doing was on the right track.

You may be surprised to know that even though it was a lot of money we turned the offer down. We are still thinking big picture here and know that we haven’t reached the full potential of the site. We have a game plan and we want to see it through then hopefully we can sell the site for 3 times the offer we got today.

Adam White is a 20+ year entrepreneur having built and sold 18 internet businesses. He currently runs JustReachOut and SquidVision, a new type of landing page optimization software for SaaS companies, and does SaaS and SEO consulting at Prosperly.com. He lives in Tennessee with his wife and kids and in between SaaS businesses he writes and directs feature films.

4 comments On Would You Sell Your Site For 5x Its Yearly Profit?

  • Its hard to put a price on all sites, most retail sites will go for 10 months to severals years profit like you said, but then theres those sites that have content ect which is harder to put a price on.

    How do you put a price on a successful content site?

  • That’s true. It depends on many other factors. With retail for instance, there would be relationships with suppliers, buyers, vendors, etc.

    In this case, it’s purely a lead-gen site, so frankly we were pretty surprised to see it so high.

  • Forgot to mention your question. It’s very tough to put a price on content sites because they do seem much more subject to the whims of competition, algorithms, etc.

    Honestly, we try and go for rock bottom valuation when we purchase by finding sites to buy that aren’t yet for sale.

    The key is to evaluate the niche’s potential, how you’ll monetize the content, and what your best/worst-case upside is. If it’s still looking attractive, then you probably have a good valuation.

    One other thing to consider in valuation is obviously the payback period. We go for <3 months, which means we really have to find deals, and usually turn them around quickly as well with the improvements we have in mind.

  • Cheers Jesse thanks for the reponse

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