If you plan to buy or sell an online business, you will be glad to know that the market for privately owned Web based companies is alive and well.
In addition to many individual business buyers, Internet businesses often attract larger players – corporate buyers and private equity investors. Such business buyers can pay a premium for a growing Internet business in order to realize certain synergies with their business investment portfolio.
In this active market, it is important to measure the value of an Internet business you have created or plan to buy. So what is your business worth?
Internet business market value – directly from the market place
The answer is simple: with all the market bustle, there is plenty of recent data on Internet business sales. You can use these business sale comparables to come up with a quick yet defensible estimate of what your Web based business is worth.
The latest release of ValuAdder business valuation software, V3.5.10, makes this task a breeze. You can calculate the market value range, average and median business values using the valuation formula multiples for a number of Internet business types.
Some Internet business valuation multiples:
- Online publishers
- Business and consumer e-tail
- Search engine marketing agencies, Pay-per-Click and SEO
- Directory, information and subscription service sites
- Online auctions
- Advertising sites
- Internet entertainment sites
- Website design firms
- Hosting providers and IT services
- Software and technology development firms
- Internet telephony, VoIP
- And many more!
Business valuation for a click-and-mortar operation
If you run an off-line business as well as a website, you can use the ValuAdder Market Comps Tool to determine the value of a business across 425 industries – including service firms, restaurants, auto repair shops, retail, manufacturing, building contractors, and professional practices, to name a few.
Internet business valuation – 3 ways
Of course, no Internet business valuation is complete without income and asset-based valuation calculations. With ValuAdder, you can cross-check your business market value results using the well-known Discounted Cash Flow, Multiple of Discretionary Earnings and Capitalized Excess Earnings methods to calculate the value of business goodwill and total business value.
Putting together your business sale or purchase
Need to structure the terms of a business sale or purchase? You will find the Deal Check calculation very handy.
If you are an Internet business buyer, ensuring that the terms of your offer make financial sense is key to avoid costly mistakes.
If you are a Web based business owner, structuring effective terms for the business sale keeps you from leaving money on the table.