Chapter 11
What Should I Charge For My Site? This is a fun question. There is no real answer! I'll try to give you some guidelines and hints. Only you can determine how much your site is worth. It can be determined in many ways. One way is by calculating how much money it makes a year. If you pull in $36,000 dollars per year with your site, you wouldn't sell it for less than that. Another way is by calculating the potential money it could make. This is a harder sell. But if you can convince the company that wants to buy your site that it can pull in $200,000 bucks a year, then sell it for that amount or more. Does your site have many registered members? Assign a value to each member! If you have 10,000 registered members, you might argue that they are worth $10 bucks a piece or $100,000 total. If you can realistically convince the person of that figure then do so. Whatever figure you come up with, you will have to justify that number to the company that wants to buy it. Here are some guidelines. When companies make large purchases, up to $10,000 dollars is a relatively simple process. When they have to shuck out more than $10,000 dollars, they are required to fill out more paperwork with the IRS or SEC etc. It becomes more of a hassle for them. So if your site is not worth much, don't ask for $11,000 ask for $10,000. If your site is worth $3,000 in your opinion, I would still ask the limit of $10,000. They will always counter offer lower. Cash or Stock? Many public companies (companies who's shares trade on the stock exchanges) may offer you shares of stock in their company, or a combination of cash AND stock. I generally take stock when it is offered but I always ask for more stock than they are offering. Do some research on the company, if you feel their stock is solid then go for it. I rarely go for straight stock deals (I prefer cash and stock) and I'll tell you why. When a company buys your site with their stock, it's treated like a merger or acquisition. In that case, you become an insider of that company (you know, like insider trader). Insiders are governed by certain laws and rules set forth by the Securities and Exchange Commission (SEC). Namely Rules 144 & 145 of the Securities Act of 1933 which states basically, that shares of stock acquired through a merger or acquisition must be held for 2 years before they are sold. So if you get stock as part of the deal, you have to hold on to it for a certain time before you can sell it. That's fine if the company is solid, but in 2 years or even 1 year that stock might not be worth near as much as it is at the time of the sale. So you take your chances. Frankly, even with those rules I still like getting stock. I've been able to get large large chucks of stock (10,000 shares or more) this way that I could never have afforded otherwise. I like to ask for $10,000 cash (the limit before they have to bother with extra paper work) plus chunks of stock (say 10,000 shares) the amount of stock you ask for will be determined by what each share is currently worth. The bottom line is, if you can realistically show how the company that buys the site will earn back their money, then no price is too high. And the company will always try to negotiate you down, no matter what price you ask. On a different note, there are many domain name/web site appraisers on the Internet these days. Many offer, for a fee, to check out your web site and appraise it to see what price you should sell it for. They have some archaic standards that they go by when determining what your site is worth. Frankly, these appraisals (In my opinion) are just short of worthless. There are no industry standards that these people go bye, they use their own standards when determining the value of a site. Those standards they use may be decent, but unless they are recognized as an authority in web site appraisals, the figure they come up with is useless. And there simply aren't any recognized authorities in web site appraisals. So I would not pay someone, anyone, for this service. I have never had one of my sites appraised.
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