Site evaluation needed urgently !

[Kefalo]

Hi everybody,

I am in pursuit of answers about selling a website and a fair asking rice since I have been approached by a guy who seems to be very serious.

Here is the basic information:

*domain: sarcoidosis-remission dot com
*the website has been running for 8 months now and it made me around $15.000 in net profits, however since Google raised the CPC too high I have abandoned Adwords and in the past few months I have been concentrating on new projects and did almost no advertising and business development and I am seeing a level of profits at $1,200-1,500 (approximately 15-20,000 per anum in net profits)
*120-150 visits with about a hundred absolutely unique (25-35 from PPC the rest from search engines and 20 articles I wrote back when I launched)
*hours per month for maintenance 2-3
*only basic skill level needed

I was thinking about 40,000 as the asking price.

What do you think?

[benitez17]

My quick answer is that 8 months of revenue isn't anywhere near enough history for me to pay over 2 years of profit for a site. My general rule of thumb is that I won't pay a multiple that is more than the age of the site.

Also, I have a few more questions:

1. Are you the sole owner of the ebook, or are there other people who have the right to sell it?
2. How is the affiliate program doing?
3. Does the ebook ever need updates, and who is the author (what is your relationship to them, what is their background, and are they available to make changes)?
4. How long has the site been running without Adwords traffic? You mention that you abandoned Adwords, but then state that there are 25 - 35 visitors per day from PPC, which is a little confusing.

By the way, there are a couple typos on the page that jumped out at me (supper should be super on the Bonus #1 and Bonus #2 buttons).

[Kefalo]

Hi,

thanks for the fast reply and for bringing my attention to the typos...

if the interested party goes by your rule of thumb I just won't sell.

1) I am the sole owner and author of the ebook and the website and would be available in any changes emerge in the field.
2) At the moment the ebook has a gravity on Clickbank's marketplace of around 10 which is pretty good having in mind that 90 % of websites have a gravity <1 and also having in mind that I made zero efforts on pursuing affiliates and business development.
3) the 25-30 PPCs are from Yahoo and Microsoft, have been running without Adwords for about 3 months.

Cheers

[benitez17]

No problem, and good luck with the sale.

Regarding the affiliate program, what percentage of your sales come from affiliates?
Are you willing to make some amount of changes for free, are you going to charge for them, or do you believe that the content will not need to be updated?

Just out of curiosity, how did you come up with your asking price, and what is the minimum price that you would accept? It seems like you aren't really interested in selling unless the buyer makes you an above average offer (there's nothing wrong with that).

[Kefalo]

thanks for the kind words, benitez

the asking price was a result of a bit of my own research (reading this http://experienced-people.net/forums...x.php/t-4.html among other things on this websites where it is stated that "Value is measured as a multiple of monthly earnings. A site valued at 24x is worth 24 times its monthly earnings.")

I am well aware that the asking price is a bit steep and what you said about me being willing to sell only if I got an above the average offer pretty much sums it up.

Also, I made some plans and estimates for the site before getting the offer and my estimates based on keyword competition and the advertising I did so far is that with investing a couple of hours every day the net profits could be increased by 50-70% within one year. Also, the risk is low, since pain and illness are universal problems and never go out of style.

I might not be entirely objective, but that's just my take...

Cheers

<added>
and yes, I am ready to work on this for however long it takes with the new owner and invest my time as well with any changes and implementing the strategies that I already have prepared and never got around to implement...if your question is if all that is true then why I am selling it lies in the fact that I am starting a more serious project and need the money to be able to pay for the extensive programming needed...

also, the asking price is just that, and I will be flexible in negotiation...any advice on other data I need to prepare for the meeting with the buyer???

[Clinton]

what you said about me being willing to sell only if I got an above the average offer pretty much sums it up.

I am starting a more serious project and need the money...

Kefalo, sellers fall into two camps - those that need to sell so have to accept market price and those that don't have to sell who can hold out for an unusually high price. Which camp are you in?

The fact that the Adwords model is not working any more makes redundant your previous earning history as that route to advertising and profiting is not available to the new owner. He's going to have to base his decision on a three month history of $1200-$1,500 a month. He'll work on the lower figure. He'll then deduct the cost of time involved in managing the business. You may spend x hours a month, he may estimate the time required as 2x or 10x per month. He'll deduct the cost of that time because it is a consideration even if he doesn't pay himself a salary. He may arrive at a re-constructed net profit figure of $600 a month.

What you seem to be offering then comes across as a business making $600pm for which you want $40,000. That would work out to over 65x for a three month old business. My guess is that the average buyer would be scared away. Be prepared for him to say thanks a lot, leave it with me.

[Kefalo]

hi clinton,

when I said 1200-1500 I tried to include as many things I could think of in the expenses (including the time spent on site maintenance, which is basically responding to a few emails every day with template emails I have prepared).

Anyway, what do you think my asking price should be in order not to scare the buyer away.

I am not in either groups, I don't need it desperately, but I would like to sell to be able to spend the money on my new project.

any guidelines are much appreciated, in your text I quoted above, you say that the price should be 24x monthly profits ...

also, the news is that the buyer is mentioning 8-12 times monthly profits...

[Clinton]

I believe you may have misunderstood what I was saying in that quote. There is no fixed multiple that sites sell for and it's not my claim that all sites should sell for 24x. Some sell for only 2x and I've known sites to sell for 60x and more.

In your case, I think his 12x is extremely reasonable and more than what you'd get if you went to auction. I would jump at that kind of multiple for this site. If you do want to bargain keep it close to his 12x to avoid losing the buyer altogether.

[Kefalo]

some very valuable information right there, thanks

one more thing, what happens when I sell a website with the legal stuff?

if for example, someone makes a legal claim about the website in say 5 years, am I completely of hook?

does my connection to the website finish with the sell?