“The data will show an increase in the multiple paid for sub $200k valued sites”
Miami, FL (PRWEB) February 04, 2014
The new report “What is Your Online Business Worth” surveys data from two years of online business sales to pinpoint how digital businesses are being valued, what can be done to increase their value, and lays out forecasts for the year ahead.
Understanding what an online business is worth is challenging due to the many variables in the process. The newly released report along with existing free valuation service aims to make the process simpler.
Digital Exit’s study of 250 online business sales from 2010 to 2013 details valuation methods used for listing a web based business for sale, which websites are worth the most, and unveils critical economic trends.
According to the data the average digital business sales price during this period was $514,725. The average final sales price was 90% of asking price. The average multiple was 2.43%, but which types of online businesses sold for the highest and lowest multiples may be a surprise to many website operators.
Businesses selling in the $2M to $5M may have boasted the largest multiples in recent years, but Digital Exits founder Jock Purtle sees small websites becoming more valuable saying “simple economics states that if there is more demand for smaller businesses the price is going to be larger”, and predicts the data will show “an increase in the multiple paid for sub $200k valued sites”.
Besides applying comparable sales and using multiples to value online business the data and gaps in it show other factors being looked at buy investors and buyers of digital companies. One of the most notable is clearly operations. For many being able to purchase a turnkey cash flowing existing business certainly trumps attempting a startup or buying what could end up being a job. For this reason online businesses sold for higher multiples of earnings than their offline counterparts for the 24 months to 2013.
As for the future, Jock Purtle, who got started in the valuation business at 9 years old, and began buying and selling websites at 20 makes several disruptive predictions for the road ahead believes the future for online business is strong.
Discover the full report, complete metrics. accompanying infographics, and obtain a free website valuation online at http://www.digitalexits.com/whats-your-online-business-worth and find out where Jock sees the best deals for buying websites in 2014.