Help me calculate the value of this website business.

Discussion in 'Growing and Managing a Business' started by ash21love, Oct 11, 2015.

  1. ash21love

    ash21love
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    I would like some advice from others on what they percieve the value of my retail website business to be based on the data I provide. I am trying to determine what to sell my business for: Your input is greatly appreciated!

    What it is: Online clothing retailer (no store front). I hold no inventory in a warehouse. my suppliers drop ship for me.
    My only method of advertising currently is facebook. I work roughly 25 hours per week. Profit margins are approximately 70%.

    years in business: 3.5

    Estimated Sales and Pre Tax Profits:

    2012: Gross Sales $127,000 Pre Tax Profit: $94,000
    2013: Gross Sales $147,000 Pre Tax Profit: $107,000
    2014: Gross Sales $175,000 Pre Tax Profit: $123,000
    2015: Gross Sales $250,000 Pre Tax Profit: $178,000 (estimated earnings)


    A little over 15% year over year growth. But in 2015 I have over 40% growth...

    Why a jump in growth in 2015? Only thing I can think of is that I changed the "style" of clothing I was selling. I switched up some products that seemed to be hotter trends.

    What multiple would be appropriate to value my business? 2-3?
     
    #1 ash21love, Oct 11, 2015
    Last edited: Oct 11, 2015
  2. bburkeconsulting

    bburkeconsulting
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    very hard to say based on the data you've provided.
    What do your projected future cash flows look like?

    If we take your 2015 profit and index a 15% annual growth and 10% cost of capital, we get a 5 year NPV of approx $885K.
     
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