Today I am going to talk about the single biggest problem with the website buying and selling industry: The difference between buying a job and buying a business.
Let’s get straight to the point, if your website requires the new owner to work on it on a regular basis, then you are selling a JOB not a business.
For it to be classed as a business, it needs to be self-sufficient, it needs to be able to run without the regular input of the owner, and it needs to make a PROFIT without your input.
In other words, could you go to the beach for 6 months, return, and have a nice chunk of profit in your bank account? If not, then you are buying a job.
So what difference does this make to the value of a website?
Well, if you are buying a job, then you should deduct your time from the value of the site. e.g if your time is normally worth $20,000 per year (fulltime), and this JOB requires you to work 4 hours per day (part-time), then you should deduct $10,000 from the value of the site.
In the real business world, it is possible to get valuations of x5 years, but if you are offering a job, then don’t expect to get more than x12 months.
Remember, next time you are buying or selling a website, ask yourself, is it a job or a business?