When it comes to selling your business, a standard valuation will consider elements such as your product/service financials (profit), sales funnel, overheads, brand value and assets.
One commonly overlooked asset, however, is your website (and it often holds huge value).
Any domains that your business holds are certainly worth analysing. Aged websites that receive regular traffic and maintain good SEO are more valuable than you might think.
This article will provide an overview of how a website can build up value over time and outline how to value your website using multiple methods.
Why Your Website Is An Overlooked Business Asset
If you’re not an SEO or a digital marketing professional, it’s all too easy to overlook the value a website may have. So many businesses are sold as a complete package with the website thrown in as added value, the owner often never realises how lucrative their website could have been if it was correctly valued and advertised separately.
It takes a lot of time, effort and investment to launch a brand new website that generates strong levels of organic traffic. This is because it takes a while for search engines like Google to trust a new website. You need really strong content and built-up authority to achieve page one rankings for most search terms.
Links to your website are also an important factor in achieving organic traffic. Links are seen as a vote of confidence from one site to another and the more high-quality links you have, the more power (and value) your website holds. Again, it takes a lot of time and money to build links which is why they’re so valuable.
It’s often much easier to simply purchase an existing website that already has authority, traffic and links rather than start from scratch. This is why website purchasing and ‘flipping’ has become so popular.
Combine an authoritative website that hosts great content and receives lots of backlinks with strong social media profiles and solid conversion rate metrics and you’ll be left with an incredibly valuable business asset that will sell for thousands of dollars via website sales platforms.
How To Value Your Website
There are many ways to value a website and there’s no industry standard (as such). If you ask a group of experts to value your site, it’s unlikely you’ll hear the same answer twice.
Related: How to Value a Business in General
This is because there are so many factors to weigh up and so many elements that can marginally improve or reduce its value.
Below we’ll cover some of the different ways to value your site and elements that are often overlooked. While we will discuss the standard revenue and profit margin valuation methods, we will focus more on the lesser known value hidden in your website that will net you some extra cash when it comes to selling.
Review Published Content
High-quality website content is almost an artform. It needs to provide engaging copy to users, achieve strong organic rankings, convey your brand message and all while attempting to maintain a strong conversion rate.
This means content writers are in high demand and hiring a specialist to write for a website isn’t cheap. Already published content is a goldmine for prospective buyers as it reduces the workload they’ll be taking on when managing the website.
Review how many articles have been published across your blog, how many product/service landing pages you have and identify any creative or interactive on-site assets. Most marketing agencies will charge $100-$150 per hour for high-level content production so that’s some instant value you have to offer.
Value Your Site’s Backlink Profile
One of the biggest challenges in marketing and SEO today is securing high-quality links at scale. They are absolutely essential for achieving organic rankings due to how competitive search engines have become.
Link building demands lots of time with many businesses opting to hire a dedicated SEO professional to manage this work themselves. Some new businesses will purchase online advertisements to build their backlink profile from the ground up. An already established backlink profile would be a serious timesaver for a buyer and it allows for faster traffic generation.
Overall, links are an important business asset and they are a strong determining factor on the final sales price. You can review the number of links your website has via a tool like Ahrefs although you may want to hire a professional SEO to value your backlinks.
Review Your Keyword Portfolio
Page one keyword rankings are far from easy to achieve. If your site is ranking for lucrative and/or competitive search terms this will highlight significant value. Remember, your website receives traffic from these keywords every month, without the need for a monthly ad spend like you would see with Google Ads.
This means that as soon as your website is transferred to the new owner, they can take full advantage of any existing rankings. The value here goes beyond traffic too, a new owner could redirect or link your website to their own, pre-existing site that is trying to compete for the keywords you already rank for.
This is why it can sometimes be worth reaching out to local and niche competitors when it comes to selling your website, as often these competitors will pay extra to ensure they receive the full benefit of your domain and no new competitors enter the market.
Review Monthly Traffic And Channels
Every potential buyer is going to want to see your total monthly traffic metrics (sessions and users) and this can be easily obtained in Google Analytics. It’s also useful to break down this traffic data using the ‘channels’ report in GA which shows the sources of your website traffic, whether it be social media, paid media, direct, referral etc.
If you can show storing traffic from a variety of sources, this is another value add. This means your site is not completely reliant on a single traffic source and if one traffic source runs into problems, the site will remain a valuable asset. This makes the purchase a lot safer for the buyer.
Understand Onsite Engagement Metrics
If you want to take your traffic data one step further you can analyse engagement metrics such as bounce rate, average time on page and conversion rate.
There are often industry standards for each of these metrics and if your site can rise above them, it’s yet another way to add value for the buyer. Not only are you bringing in traffic but that traffic is remaining on-site for considerable lengths of time, engaging with content and converting. This proves the value and quality of your on-site content.
Identify Similar Sites That Have Been Sold Online
This is often the best way to gain an overall idea of your website’s value. You can head over to a website sales platform like Flippa and search for similar websites in your industry that have recently sold.
You can then compare the metrics of these sites with your own. Are there any sites with similar traffic and revenue data? Review final selling prices where you can to gain an understanding of the ballpark figure you should be aiming for.
Use Standard Profit Multipliers
The most common valuation method is to simply take a website’s average monthly profit and multiply this by between 24 to 36 (two to three years). This gives an indication of the site’s value if it was to remain untouched for the next few years.
This isn’t an exact science either. For starters, this method doesn’t consider a site’s age. If a site has shown longevity via stable profit figures over 5+ years, this is going to be a much safer purchase compared to a site that’s 6 months old and will therefore command a higher sales price.
It also doesn’t consider the monetisation method of the site or how strong the competition is within the chosen industry. Profit multipliers are a useful way to gain an overview of a site’s worth but use the previous methods listed above to develop a deeper insight and a more accurate figure.
Stuart Cooke is the Marketing Manager at Evalian. They're specialists in data protection and cybersecurity consultancy and training for businesses of all sizes.