Quote:
Originally Posted by CHMOD
One of my customers wants to sell their website. It was an 100% amateur self produced website operated by a young couple. Now they are separated. The site has been running on cruise control for almost 2 years now. It has been abandoned.
In 2012, they earned: $52 494.10
2013: $34 500.51
This year so far: $17 424.99
They asked me how much they could sell their website. What do you think? Is the site sellable and on what should they base a sale price?
I am not sure if I am allowed to post their URL yet. I will have to ask them.
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Assets, equity, and cash flow.
35% decrease in revenue in 2013
50% decrease in revenue over 2013 with 29 days left in this year.
Giving the benefit of the doubt that 20k will be made in 2014 EOY, you've dropped revenue nearly 68% in total in just 2 calendar years.
The valuation is about cash flow, since any assets (mostly content), is already more than likely 2 years old and aging in the best case scenario.
It doesn't appear that the traffic is enough, or of the quality to keep the revenue stream steady, or the content is not compelling, unique, and has interest to make sales.
It's all about cash flow. People don't buy potential, they buy assets, cash flow, and equity. If the trend that has happened so far in the last two years continues, this business makes less than 5000 dollars next year, and 2K the year beyond in 2016.
This is a fire sale.
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