I'm looking at making an offer on a forum site. This site makes between 35k and 38k for the past four years and has been around for close to a decade, so it's very established. most of hte advertisements come from direct sale banner ads with vendors. Very seasonal sales.
What do you guys think it is worth? 1.7 - 2x yearly earnings?
There is a lot more information you need to take into account. How much work is involved in running the forum? Forums can be a real time drain. What niche is it in, and what kind of lifespan do you see it having? The 35k - 38k: is that profit or just revenue? Can you trust those figures? Does the current owner invest his personality in the forum to such an extent that there will be a mutiny when the forum changes hands?
I hope my endless questions helped
I figured there was, I guess I was wondering if there was some kind of ballpark> I'm trying to get the net profit numbers, my impression is that it's pretty close to the 35 - 38k.
This site is in a pretty good and stable niche (geographically as well). It's been around for almost 12 years so it has quite a track record. I've got access to the google analytics data and it's very stable.
I think he does invest his personality in somewhat. Everyone knows the owner. He plans on staying on board during a transition period and I do have a lot of faith in the owner. My only qualms with the purchase are, how much can it possibly be grown... since it's geographically limited (possible to expand). I think there is some opportunity for growth simply based on a redesign (the design is somewhat dated) although it uses a current version of vBulletin, which is great.
Agree with hooperman here.
And it sounds like owner is an integral part of this forum to some extent. So evne if everything else checks out, you really have to find out just how important he is and to the users. Its difficult, but off the top of my head, have a look at how much he posts and and answers questions, is addressed by other posters. Just try and get a general feel for this, then dig deeper.
Yup. It definitely is. Why not hire him to maintain the site? That way both of you get 50/50 out of this situation.