What if there was a way to significantly increase the value of your website?
As we head into the new year, we’re really excited with what we’re seeing in the website buying and selling marketplace.
When we started online 12 years ago, good quality websites were selling for 10 times their monthly profits.
We’re now seeing these same types of sites selling for 20-30 times their monthly profits. This is a great sign of growth and value that people are placing into these digital assets.
As exciting as this is, recently we’ve also noticed a really simple way to sell these same good quality websites for even higher multiples, even if they are small websites.
So today, we wanted to share a simple tip with you, that you can use to get a higher valuation on your website when you come to sell that’s working great right now. We’ve personally used this to generate an awesome multiple for one of our recent website sales.
CLICK ON THE VIDEO BELOW to hear from Matt & Liz Raad on how to boost the value of your website
A Simple Technique To Test Increasing Your Websites Valuation
Liz Raad: Hi, it’s Liz and Matt, and Happy New Year! Today we wanted to kick off the year with a great tip for you. Something that we’ve just done with one of the websites that we recently sold.
Matt Raad: We’re seeing it happen with smaller websites, and also hearing about it’s effectiveness through speaking to a number of website brokers out there.
Liz: How do we get these high website sale price multiples?
Building up your website as a valuable asset
So obviously, when you build or buy your websites, the goal is to create a really valuable digital asset.
You want high cash flow from the website, which helps pay it off as quickly as possible.
But you also want to create a valuable online asset, so if you do need a big hit of cash at some point, you can do that very quickly by selling. And ideally, sell at the highest multiple.
How website valuations work and why its important…
So, you’ve got your monthly profit that you’re making from the website. When you go to sell, you want to sell the website for as high a price as possible, as high as possible multiple of the monthly profit.
If you’re making $1000 a month, you could possibly sell it for a 20 times multiple of the monthly profit, which is about average now in the website sales marketplace.
Matt: Yes, around 20 to 30 times monthly profit for a good website.
Liz: So, at a 20 times multiple, that website is potentially worth $20,000, which can be a nice payday for a small website.
So what if you could sell your website for a higher multiple?
We want to share with you a simple tip that we have always done, but seems to be working particularly well in the current website sales marketplace.
This website renovation technique (besides being very simple) can very quickly increase the sales multiples that you can sell a website for.
Diversify the income streams off the website to quickly increase your website’s value
Matt: Because this is really exciting. What we’re finding is some of our students are doing this very successfully. They are fixing up these small, little sites that they’ve had for say a couple of years, (websites they’ve been learning on). And we are seeing it work really well on relatively small websites making around the $1000 a month.
Multiple Monetization methods can = higher website sale price
Liz: So if you’ve got a website that is only making money from AdSense (from advertising), just go to that website and think, “Is there some products that we could put on that website and get an Amazon affiliate account and have links to actual products, as well?”
Or is there some other affiliate program we could try adding to the site?
And vice-versa. If you have a website that’s only making its money from Amazon reviews, add on some Google AdSense (if there is lots of traffic) or some other direct web advertising.
Direct advertising on your website is a hidden gem
Matt: Our favourite, and I really want to reiterate this, and you would’ve heard me talk about this last year at our annual Digital Marketing Conference, is direct advertising.
That’s exactly what we did on our website that we’ve just sold for a great multiple.
Direct advertising on websites is a great way to monetize websites
This is because there’s a lot more corporates and businesses (big and small), coming into the website marketplace and willing to pay good money on niche websites to get their message in front of their niche or exact users.
So if you have a good even small little website in a niche where there are businesses who would love to get direct access to advertise directly to your websites audience, these days its an easy sale to get them to advertise on your website directly.
So possibly, you haven’t thought of adding that kind of monetization method to your website.
And you can keep it really simple. For example, it could just be a simple little banner ad that you “rent out” to them in the right-hand column, in addition to how you normally monetize it.
And you might get a really nice surprise when you come to sell the website. Because website buyers are looking at your website, going, “Cool, there’s a couple of different ways that we can make money out of this website.”
Liz: And it’s also adding security for the buyer and for you.
Because the more diversified your websites revenue is, the more secure your income.
So that’s our simple website renovation tip. Get out there and see if there’s other things that you can add in terms of monetization for your websites.
You’re going to get more cash flow out of your website, and you’re going to make them worth more in the long term when you go to sell up.
I hope you enjoyed these quick tips on increasing the value of your websites.
If you’d like to read more about increasing the value of your website click here.
Now I’d like to hear from you.
What was your key learning from this?
Or maybe you have a question about something you read here.
Either way, go ahead and leave a comment below right now.