Comments on: I Will Buy Your Online Business

By: WhyDoWork

WhyDoWork — Thu, 10 Jan 2008 01:14:39 +0000

Sounds like there’s some folks out there that want the long version of this post

@ Valuation Myths:

using the revenue multiple is a quick first pass. If I we’re listening to a group presenting that was looking for funding, thats just the first thing that comes to mind for me. In actuality, it could end up bearing 0% weight in any kind of final decision.

I’ll do my best to cram some more complex valuation principles in my next post on the topic!

By: Valuation Myths

Valuation Myths — Wed, 09 Jan 2008 21:38:53 +0000

I thought using the revenue multiple was a worn out myth when trying to determine the value of a potential business purchase. What your business is worth today depends on three factors: 1) how much cash it generates today; 2) expected growth in cash in the foreseeable future; and 3) the return buyers require on their investment in your business.

A better method would be using discounted cash flow analysis and a combination of other methods instead of calculating the revenue multiple by itself. It sounds kind of limiting for the seller, and completely unfair for the buyer if you rely on the revenue multiple for business valuation.

WhyDoWork, your faithful readers would love to see newer detailed posts that discuss more useful methods for valuation. We’re trying to make a living out here! Thanks.

By: WhyDoWork

WhyDoWork — Wed, 12 Dec 2007 06:44:58 +0000

Hey Alicia,

Thanks for the feedback. I’ll be sure to post a continuation of this discussion

By: Alicia

Alicia — Mon, 10 Dec 2007 15:30:23 +0000

Just two weeks ago I had to make a buy or make decision.
I bought a website and the amortisation is going to be between 13-18 months, without pushing anything.

So in my opionion the hard part ist to evaluate, how much better can the revenues get with how much work effort…

Please post more on this topic

By: bloggernoob

bloggernoob — Sat, 08 Dec 2007 01:14:40 +0000

great piece on the valuation of sites. i think with the recent selling out of blogs like bloggingfingers and cashquests, people are looking at an exit strategy. there isn’t an industry standard formed yet with website appraisal. that technorati api price is a joke.

By: WhyDoWork

WhyDoWork — Fri, 07 Dec 2007 19:03:17 +0000

@ Adrian:

Thanks for the comments. I think I’ll do some more posts in the future on this topic because partnerships and acquisitions don’t need to be a scary thing.

One good post I came across on this topic was at the Rookie Blogger covering the botched takeover of the blog CashQuests.com.

Looks like there are a lot of people out there who could benefit from some advice in this area!

By: Adrian Keys

Adrian Keys — Fri, 07 Dec 2007 18:47:25 +0000

It’s an interesting topic to explore. I suspect most people are afraid of falling prey to the hype machine or conflicts that may arise out of partnerships. In the final analysis though I think many of us could much better in strategic partnerships…