This question comes up quite a bit, but when you are talking about individuals businesses or blogs, not a corporation, the simple answer is, probably not as much as you think. Certainly not as much as you have put into it.
One of my favorite things to watch is Buy it Now prices on eBay and personal items people put up for sale, like their car or motorcycle. I have this GREAT thing, I paid $5,000 for it, used it for 5 years, it is in perfect, brand new condition and here it is for sale for $5,500, great deal. What we deem as precious and important to us, really only has a value of what someone else is willing to pay, and in my experience, it is not as much as we would want it to be.
There are “collectibles” and things like that of course, but I find those don’t even hold up to current prices unless it is really the hottest of hot in the latest trend or gimmick. We even had a genuine Rolex watch, with an appraisal that had a replacement value of $7,500 and it looks like its current ebay selling price is around $1,200. It comes down to this. Do you actually want to sell the item or business in question, or do you want to sell it for what you want to sell it for?
I am going to examine this question in a series of posts since it can be quite a long subject. In this post I will look at a few variables in determining value to your business, asset, blog, online property, or other digital assets and what it might be worth if you want to sell it. Should you look at selling on Sitepoint as opposed to eBay or Amazon and what other alternatives are there for you to sell your Internet assets. Other points that might come up as future topics are pricing domain names and their value (you can also see Register a Domain Name for eBay Affiliate Traffic, 10 Ways to Set Goals for Your Online Business, or GoDaddy Cash Parking Makes Little Money for some of my other related topics on this subject.
Value is Determined by Someone Else
As I mentioned above, the value of something is not really determined by you at all. How much something is worth depends on how much someone else is willing to pay for it. If you think something is worth $5,000 and someone else is willing to pay $10,000, then it is worth $10k, and of course the opposite is also true.
A good example of this is the current fire sale of blogs. At first, the money making seo blogs were said to be worth bundles. Then as a few were sold off, the value of each was shown, to be what someone else was willing to pay for it. There were, and are, several metrics that bloggers decided each blog was worth and gave it value, but most went by a price per subscriber of about $15.
All of this came to mind when I read, A Difficult Decision – BloggingExperiment.com For Sale, a nice blog which I have read for some time. All of sudden the for sale sign went out. It was up for auction, but has since been sold for an undisclosed amount, but the seller / owner (Ben) was looking for “5 figures”, which is about in line with the price per subscriber listed above. That would make the sale about $13,500 (that is according to the calculation above, I have no knowledge of what it actually sold for).
If we just stay with the guesstimate above as an example, Ben was doing a year long experiment, which he was 265 days into, when he decided to sell his blog. Since he sold it, I would assume he got a price he was willing to accept. If it was my guess above, that comes to about $51/day, or about $6/hour if you go on an 8 hour day, or approximately $18,000/year. But, it is only worth what someone else is willing to pay for it, and sometimes that is better than what we know it is worth.
Don’t self impose an over valuation of your asset. If you do, whatever you are trying to sell will sit there for a long time, perhaps months or years before you find a buyer you will agree with. If you decide you want to sell it, sell it, for what someone else is willing to buy it for, in a reasonable period of time. Ben obviously made the decision to sell his blog, and did so, in about 5 days.
Value Depends on What You Put Into It
As with most things in life, you get what you put into it. One thing that I think is a misnomer among others looking at Internet entrepreneurs is how much work is involved. Sticking with the blog theme from Blogging Experiment, I know it is a hands on, daily grind, meticulous operation to keep that blog at its current traffic level and subscriber list. If he just let it go for a week, or a month, and let it run itself, it would run right into the ground from its prime.
Blog in particular are not self sustaining businesses that you can setup and let run. They take a lot of time and effort, effort that most are not willing to put into a blog, which is what makes sites like Pro Blogger so good, they put a ton of hours into the site each day. Not all of us have the staff and resources to do what they do, but it certainly adds value to their site. What a quick tip to add value to your blog or website. Add content. Not scrapped content or stuff just pulled in from other sites, but real, well written, new, fresh content. That will add readers, advertisers, and value to your site.
Value Depends on How You Present It
One final way to put value into your online asset, presentation. You may have the worlds best thing, but if it looks bad, smells bad, and isn’t generally presented well, it won’t have the value you think it should, or probably does. This may be a clean design or new look, but most likely you have already have this in place.
I can relate this to an eBay listing (or ad if you prefer). You can have the exact same product as someone else on eBay, sell it for the same price, same shipping, and delivery time, but yours will not sell if the presentation it not better than the competition. This may just be nicely worded descriptions of what you are trying to sell or site metrics, visitors, stats, all the things people really want to know about the item for sale.
Give a lot of information. I think people generally read about 10% of what is presented to them, so make the important points stand out. Highlight your strengths, but don’t hide your weaknesses, and give a lot of information about the item for sale. The more questions you get about the item for sale, the worse you did in explaining the sale to potential buyers, especially if you get 10 people asking the same exact question.
What are your best tips to showing the value of an item?