Irvine businesses know that their companies are only going to go as far as their websites take them. In other words, if your site seems unprofessional and pieced together, with broken links, poor copy, and frustrating UX, then you’re hardly likely to get the page views and conversions that you crave. On the other hand, a well-designed and easily navigated site is like a successful advertisement for your business all by itself.
But how much is your business worth? It’s an intimidating question to ask. The reason you might want to ask it is that many entrepreneurs envision a scenario where they might exit the company someday. That might be your end goal, or it might not, but it can never hurt to have a fair valuation of your company, Irvine. So, how might you go about doing that?
Figuring Out The Worth Of Your Website and Business
When assessments of your website are made to try and determine an objective valuation, a formula such as this one will likely be applied. You will take your average 12 months of net profit and times it by a multiple.
The first part of this formula is easy to figure out. You or your SEO company can use an analytics tool to determine your average net profit. The more difficult part is figuring out the multiplier. If your business is profitable and healthy, then it might be anywhere between 20 and 50. Keep in mind that this is a monthly multiplier, not an annual one.
It’s also possible that you might be considering selling your business, but during a down period. When it’s not boom times for your company, cutting your losses and starting over from scratch can be tempting. But if you do so, then you’re going to be looking at a multiple of less than 20x. If you’re thinking about doing this and going through a broker, then they’ll probably tell you that some companies or individuals might consider buying even if your business is not doing well at the moment. It is the same as people who buy distressed properties. They see a way of revitalizing that property or company. But it might be painful for you to think of selling your business at any time, and especially if you know you won’t get much for it.
If this is something that you are considering at all, Irvine, then you should have a frank discussion with your SEO company. They will understand that if you do end up selling, it could mean the end of their business relationship with you. However, this is ultimately your decision, and they are only along for the ride. Their last order of business for you might be to help with that valuation to be positive that no one takes advantage of you when you sell. Alternatively, they might propose a new advertising and sales strategy as a way to save your company if it is floundering.
Whatever you decide, it is never a bad idea to have an idea of what your company and website are worth, whether you are on the verge of giving up on it entirely or whether you are making money hand over fist. Your SEO company can help you to do that, and you can have a conversation with them if it seems like a good idea, Irvine.