Not long ago I wrote about determining the value of your website or blog here on problogger.net. Now that you know how a web property is or can be valued in the free market, in this article I want to discuss a practical strategy you can apply to increase the valuation of your web property.
The value of a website or blog, or any other business for that matter, is derived from its earnings or free cash flows before interest, taxes, depreciation and amortization—a term referred to as EBITDA in the professional sector.
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For example, if a similar blog sold for four times its earnings couple months ago, there is a good chance you can count on a similar multiple when putting a value on your web property.
What do I know about website valuations? For starters, I sold an ecommerce website in 2007 for $250,000 to one of the top power sellers on Ebay at the time. Since then I have sold several niche websites for five figure cash out deals.
The best way to boost value
If valuations are based on earnings, it is obvious that earnings must increase if the value of your web property is to increase. Many online entrepreneurs take their time growing their web property organically, often on their own due to funding restrictions.
However, once the web property starts generating a little bit of money, one of the best investments you can make to increase its value is by reinvesting those earnings right back into the business.
For example, let's assume you have a niche website that has 30 pages, each of which brings in $1 a day, roughly on average, from Google Adsense. If you took your earnings and invested in 30 freelance articles, you can hypothetically double the earnings from your...
