Quote: (05-12-2017 11:48 PM)stefpdt Wrote:
Clean websites with sustainable cash flow are usually valued at 25x. So yes, a website doing $2k per month can definitely sell for $50k.
But, I think most buyers want to see at least 12 months of earnings if not more.
Is that really the case 25x, personally I would be hesitant to buy many types of online only businesses for even 5x valuation. With online businesses there's no real estate, oftentimes little to no inventory, and traffic which we all depend on is finicky and subject to Google changes.
At 25x that's quite a while before you recoup your money and a lot can happen within a short amount of time online.
One of my businesses is in a "high risk" industry think vape, weed, paraphanalia, etc. We do about 3 Million a year in sales, last offer I had to buy was 250K and I actually really considered taking it. I'm glad I didn't as fast forward 3 years later were still in business but at the time I had lost Paypal, lost credit card processing which it took me about another 3-4 months to find, got kicked off eBay and AMazon, etc. Eventually I managed to get processing all be it paying 8%.
Granted my business is unique but 25 times multiple seems insane to me.