How to Plan, Build and Increase the Value of a Website so it Sells Well

Building a Website You Can Sell in 2013
Todd  Malicoat - 8 Jan 2013

This is a summary and brief review of a relatively recent (Jan. 2013) blog post about considerations that a web developer and a business owner should have in mind when building a new website. When planning a website these factors, if heeded, may make a significant difference to the sale price achieved at some future date. Value Websites recommends that if this summary whets your appetite for more, you read Malicoat's full article. The headings below are Malicoat's.

General thoughts on website appraisal
Malicoat begins with Rule #1 – "You can’t sell potential."  Take the word out of your vocabulary, he asserts.  Cringe when you hear it from others. Most sites currently sell for between 12-36 months of revenue, or a 1-3x annual revenue multiple - you’ll be lucky to get a 3x multiple!

He offers a helpful Primer on valuation principles: 10 Rules for Valuation by Tim Berry
 
Online Business and Revenue Models
A list to consider.

• No current model – Informational or resource site.
• Subscription.
• Advertising.
• Service.
• Lead generation.
• Product (eCommerce).
• Donation.

Questions for Appraising a Website – The Buyer’s Perspective
A series of questions to ask of a website which are helpful when appraising a website's real value.....

Website Appraisal Tools
9 are identified and explained, including Alexa, Google Analytics and Google Adwords' Tool ....

(Potential) Website Valuation Equations
A few ways of putting a price tag on a website:

• Content site (no current revenue model)
• Content site (advertising revenue model)
• Subscription site
• Service site
• Lead generation site
• Product site

Major Variables to consider when Buying or Selling a Website

• Revenue
• Profits
• Earnings per click
• Costs per click
• Site overhead
• Search rankings
• Stability of search rankings
• Defensibility of search rankings
• Size of the site.
• Unique Content
• Content
• Assets
• Current and future revenue potential
• Loyalty of user base and brand loyalty
• Lifetime value of visitors
• Affiliate relationships
• Content creation relationships
• Links pointing to the domain
• Unique domains linking in
• .edu and .gov links
  These links are  valuable in  the Google algorithm and have additional authority value to consider.

 “Resource Value” 
Expense considerations for any website purchase: 

• Advertising expenses
• Hosting
• Merchant Fees
• Licenses
• Book keeping
• Inventory
• Supplies
• Bank Fees
• Content creation costs
• Contractors
• Payroll
• Other expenses

11 Ways to Create a Site you can Sell 

1. Build an optimized website with a state-of-the art CMS
2. Develop a team of content writers and build “legacy” content
3. Begin building an email list and building the brand
4. Build traffic and links, wash, rinse and repeat.
5. Explore and develop the site’s business model(s)
6. Create and maintain cashflow
7. Keep good financial statements
8. Create defensible traffic
9. Make the site transitional to a new owner
10. Stay Focused
11. Have strong documentation

Top Website Brokers & Brokerage Services & Website Valuation Resources
A series of potentially helpful links but a number are broken or dated.

Value Websites' Concluding Comments:

1. As above, we recommend that you view the full article for more detailed information.
2. Malicoat offers several links to info resources that enhance the comments he makes about building a saleable website.
3. A primary value of this article is that it is recent - much of the info available online is quite dated.

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