"Today’s segment is going to target valuations in the technology, internet and website sectors. Many times, companies looking to exit first need to get an understanding of market trends, valuation and to develop a timeline to sale.
On Market Trends, ValleyBiggs is owned and operated by eCommerce professionals that have also achieved mid-market status. The owners are embedded into the fabric of the eCommerce community and have a great deal of knowledge regarding the ins and outs of website ownership, and can quickly understand the pros and cons of a website and the technology behind it. We look at things like Search Engine Optimization, Social Media signals, Pay Per Click opportunities with comparison shopping and search engines, and more. These skills will not only help the business owner understand her options, but this knowledge will help educate potential buyers on the value of the business as well as opportunities for future growth.
On valuation, there are a number of factors that go into the value of a tech company. Intellectual Property is a valuable aspect of many tech deals, so this can add value in many different ways and is often a leading indicator of the value of a company. This intellectual property includes patents, copyrights, trademarks, non-public know-how, customer lists and consumer awareness. In addition, and with respect to Websites, traffic can be a force multiplier when it comes to identifying value. If a website’s traffic is mostly organic and growing rapidly year over year, this will elicit a lot of interest and thus raise the asking price. Next in importance, like with any company, is the earnings represented by the firm. And the higher the compound annual growth rate, the higher the multiple used for this portion of the valuation.
Other attributes that can have an impact on valuation includes, Year over Year sales trends, the age of the business, organic search results and placement in Google for industry-specific short tail keywords, whether the business is or operates under a brand or exact match domain, and social media signal development. Also, whether a business utilizes a drop ship, inventory hold or hybrid inventory model will affect the final sales price. ValleyBiggs will study the company, learn the technology, and utilize every possible attribute to squeeze as much value as possible out of the company before identifying a valuation range.
It is worth noting that regardless of what valuation placed on any company, we pride ourselves in listening to our clients and moving forward only when they are 100% comfortable. If a client is not satisfied with the valuations we see in the business, we will agree to either market it at the higher price, or we will walk you through our thoughts on internal things you can do to increase the selling price. We’re in it for the long haul and are in no hurry – we are business owners ourselves and understand that selling a business can take time and patience. We operate on our
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