Tag: Evaluate

Website Value Appraisal: How to Evaluate Your Website’s Value

Although there are many tools for calculating a website’s worth online, they may not always be accurate. It is for this reason that you ought to understand how to evaluate the value of your website. For example, some of these websites use only income gained from Google AdSense. This is wrong because numerous websites have many other income streams other than Google AdSense. Secondly, income from Google AdSense cannot be considered the standard of measuring ad income since it’s actually very low.

Another factor that has been wrongly used to measure the value of a website is Alexa ranking. Although this is a widely used measure, it is mainly based on the amount of traffic to a given website. To be considered, users must have an Alexa toolbar installed. This eliminates the count of many other visitors to a given site. Secondly, a high number of visitors to any given site does not necessarily equate to a high income. Income is mainly based on the business model that any site employs.

Accurate Methods of Determining a Website’s Value

Although these methods may appear tedious, they are the best approach in determining how much a website is worth. Another factor to bear in mind is that only a website’s owner can accurately calculate its worth. This is because only he or she has custody of the website’s data.

1. Amount of Revenue Generated

There are numerous ways to monetize a website. The most common include:

  • Offering ad space – examples include AdSense, Infolinks, and affiliates.
  • Product sales – examples include eBooks, brand caps, and T-shirts.
  • Subscription based payments – examples include online courses and membership based resources.

A website that has these, or any other way of generating income can be valued based on the amount of money it generates daily, monthly, or yearly.

2. The Age of a Website

This offers additional value to a website because search engines, especially Google place more value on it. This is based on a number of parameters including:

  • Brand recognition – the older a site is, the higher the possibility that it has grown into a known brand.
  • Number of backlinks – older websites have more backlinks that newer ones meaning higher traffic.
  • Trust – People will definitely place more trust in an older website than one that has just been created.

Although there may not be a definite monetary value, age places an older website at a higher value.

3. Domain Name

The factor you should consider here is the market potential of the domain name. A domain name can determine a brand’s competitiveness, marketability, and SEO. An easily recognizable domain name is easy to find and remember. This automatically translates to higher traffic and therefore higher potential income.

4. SEO Analysis

Websites vary greatly in terms of the way SEO has been applied. A site that has high quality SEO is definitely more visible than one that doesn’t. As such, it will be of higher value.

5. Web Content

There are websites that automatically attract numerous visitors, including unique pageviews due to the quality and the value of their content. One such example is a news site that is well written and has new content every day. Others are educational sites. Such sites will bear higher values owing to the value of their content. This is also an indicator of the amount of work that has been put into building the site.

6. A Website’s Assets

These are all the additional features that a website has in addition to the basic structure. These can include:

  • An advanced theme
  • An email list
  • Professional type plugins
  • A premium domain name

7. Traffic

A website that attracts a high amount of traffic has a higher potential of business than one that doesn’t. The higher the traffic, the higher the market value.

Top 5 Free Website Worth Calculators

The tools listed below are some of the best free tools for checking a website’s worth, based on the parameters they use.

1. Website Value

Website Value is free website value calculator that helps rank and estimate the value of your website using Alexa and Google rankings. Plus, it is able to estimate how much daily ad revenue your website brings in.

2. Website Outlook

This site evaluates the worth of a website based on Alexa Ranking, Dmoz listing, revenue from ads, daily page views, and so on. It is popular because it also offers suggestions on how to further improve the value of your site.

3. Your Website Value

The Your Website Value team brings 18 years of experience to help you appraise the worth of your website. It shows your web traffic graphically and also gives you a score based on how fast your page loads so you can troubleshoot potential drops in user traffic based on speed performance.

4. Website Value Calculator

Values not only scores your website but also gives you the name and value of the top websites online so you’d have an idea of how your site compares to more famous names like Google or Twitter.

5. Site Price

This is a free tool that uses an assortment of factors to calculate the worth of a given website. Its key pricing parameters include:

  • Number of daily visitors
  • Backlinks available
  • Visibility within search engines

The Complete List of Things to Evaluate Before You Open or Invest in a New Venture

Do you have an innovative idea you wish to market? Are you planning on opening a new business? Are you investing on somebody else’s idea?

If you said “yes” to any of these questions, don’t do it just yet!

Starting or investing on a new venture can be an emotional process full of anticipation and excitement. You need to keep a cool head and treat the process with the utmost objectivity.

To help with that, I’ve put together a complete list of questions you NEED to answer before you even think about putting a business plan together. This will help you make sure that no overlooked variable makes you incorrectly go forward or not. Make sure you don’t skip any part of the process and end the exercise with a very honest yes or no decision based on the answers.

You will find it difficult if not impossible to answer some of the questions. It is very important to understand the sureness of each response and the risk that each unanswered question implies. Handle this risk by analyzing scenarios with the different possible answers.

Write down a simple comment to each question, doing this formalizes your analysis. You can also think about each question in a SWOT analysis context identifying each one as a Strength, Weakness, Opportunity or Threat.

The Dos and Don’ts to keep in mind:

Do this all the time

  • Be methodic, analyze completely. Understand the need, competition and constrains, then tailor and differentiate.
  • Be on the lookout all the time for the fatal flaw that will make this fail.
  • Lots of questions can’t be answered or are too vague, check the risk of not knowing them.

Don’t Do This

  • Don´t follow the classic idea method: “I have an idea, let me think how to shove it to the channel or customer”.
  • Don’t focus on the features of the product, focus on the need you are trying to fulfill.
  • Don’t get tempted to skip a full analysis.
  • The most frequent mistake is to think everybody in the market is like you. If you like the product, everybody else will.
  • It is common to confuse a good idea with a good business opportunity, they are not the same.
  • Thinking “We have no competition” is only for naive entrepreneurs.
  • Don´t obsess with first mover´s advantage, most of the time funds prefer second movers because the idea is already validated.

The questions you need to answer:

Product or Service

  • Can you describe the business idea in 25 words or less?
  • Is the idea scalable? Is it limited to your time or something else?
  • Can your offering later change / adapt?
  • Risk of not being able to develop / manufacture the product?

Market or Customer

  • Can you do formal market analysis or only informal? (Interviews, observations, focus groups, surveys, market experiments, etc.)
  • Who is the customer? How precisely can he be defined? Location, profile, etc.?
  • What problem are you solving? Why would the customer buy? Does he want to?
  • Commercial risk, no willingness to buy?
  • How big is the market? Growing or shrinking?
  • How penetrated is the market by the industry? What share can you get fast? Later?
  • What price is he willing to pay? Based on what? How important is it?
  • How price-conscious is your customer?
  • Risk of change in consumer behavior?
  • Can the target market later be changed? Can you later attack other levels in the value chain?

Industry

  • Can you do formal analysis or only informal?
  • Is it thriving? Shrinking?
  • Do suppliers have power? Risk of supply shortage? Change in price?
  • Barriers to entry:
  • . Contractual? Patent or trademark?
  • . Lead time in tech development? Innovation?
  • . Management? People?
  • . Location?
  • . Regulations and government?
  • . Other barriers?
  • Can barriers change easily?
  • Do you have relations in place?
  • . Customers?
  • . Suppliers?
  • . Partners? Talent? Investors?
  • Experience in industry? Yours? Other management?
  • Risk of regulatory or other government related changes or intervention?
  • Technology risk of obsolescence?

Competition

  • Can you do formal competition analysis? If not, what informal analysis can you do? Is it good?
  • Who else is attacking the market? How? Successfully?
  • What is your competition´s pricing strategy?
  • What is the closest thing in the target market to your product? Are you a first mover? Second? More than that?
  • Strategic advantages / differentiators. Clearly visible to consumers or only in your mind? Sustainable? True, important and provable?
  • . Function? Design? Quality? Uniqueness? Innovation?
  • . Delivery? Channel? Availability? Location?
  • . Cost? Marketing? Sales?
  • . Ignorance of buyers?
  • . Customer service?
  • . Other?
  • Are you taking advantage of a certain opportunity, situation or advantage?
  • How fast can competition catch up?

Channel

  • Which options do you have?
  • Which one is the ideal? Why?
  • If the first choice does not work, does it make sense to try others?
  • What channels does your target market prefer?
  • Which ones are your competitors using?
  • How much integration do the channels have?
  • Will the channel change with customer habits or tech?
  • Risk of no access to the correct channel or consumer?

Sales and Advertising

  • How will you get customers?
  • How will you retain customers? Is it important?
  • Describe the necessary salesforce?
  • Can a salesperson of ordinary skills sell it?
  • Do you need advertising? Which kind? How much? Is it important?

Economics

  • How clearly can you model the basic economics of the idea? (Costs, sales, margins, required capital, ROI, etc.)
  • Will there be economies of scale? Are they important?
  • Accounts receivable? Can it become a problem?
  • How will you finance initially? Later?

Management

  • Do you have or can get the necessary management team?
  • Do management / leadership / organizational capabilities make a difference? How big a difference?
  • How valuable is intellectual property?
  • Does it make sense to do this solo? It normally doesn’t.

Other

  • Validation:
  • . How fast can you know if the business can work or not?
  • . Can you define the variables to know it? How fast can the data flow?
  • . Do you need product development to know? Dangerous!
  • . Do you need a long selling process or many tries to know? Dangerous!
  • Can you diversify? Not easy on new ventures, but can it be done?
  • Give me the biggest drawback / risk (fatal flaw) of the idea? The one that will make it fail?
  • Enlist the seemingly fatal flaws that can be fixed.
  • Does the idea fit your life objectives? Workload?
  • Do you feel passionate about the idea? Enjoyable? Are you doing it only for the money?
  • Give me the upside / best case scenario?
  • Give me the downside / worst case scenario?
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