Our method: websites
How we value websites and online businesses
Profit first, then the right multiple for the business model. Valuing a domain name instead?
Websites and online businesses
Six steps from profit to price
The same engine behind our free calculators and every private estimate we send.
1. Earnings (SDE or EBITDA)
Seller’s discretionary earnings (profit plus one owner’s pay) for owner-run businesses. Adjusted EBITDA for larger ones with a team and overhead, where a paid manager replaces the owner. Larger SaaS uses ARR.
2. The right band
Each business model has its own quick-sale, market and premium multiple band. See the full table.
3. Quality score
A 0–100 score places the business inside its band, from the bottom of quick-sale to premium.
4. Comparable sales
We blend in the multiples of real closed sales in the same category and size range. The more recent comparables we have, the more they count.
5. Confidence
Seller-reported numbers widen the range by 15% until we verify them.
6. Asking price
We suggest an asking price inside the supported range. Asking up to 10% above it needs an explanation, 10–25% needs evidence and review, and over 25% we ask the seller to reprice.
Larger businesses
When a business has a team: adjusted EBITDA
SDE assumes one owner does the work. Once a business runs on a team, with managers and real overhead, the owner is no longer the business, and we value it the way a company is valued: on adjusted EBITDA.
We switch to EBITDA when
- A team does the day-to-day work: employees or long-term contractors, led by someone other than the owner
- There is real overhead: payroll, benefits, office, tools, management layers
- The owner works on the business, not in it, or could hand their role to a salaried hire
- Earnings are large enough to draw company buyers: usually from around $1M a year
Adjusted EBITDA, step by step
- Start from net profit.
- Add back interest, income taxes, depreciation and amortization.
- Add back genuine one-off costs, each with a document behind it.
- Replace the owner’s pay with what it would cost to hire someone for that role at market rate.
- Leave the team, contractors and overhead as costs. The buyer inherits them.
Worked example: a team-run agency
| Line | Amount | Treatment |
|---|---|---|
| Revenue | $3,000,000 | |
| Team payroll (8 people) | −$1,500,000 | Stays a cost: the business needs them |
| Overhead: office, software, insurance | −$450,000 | Stays a cost |
| Owner’s salary | −$300,000 | Swapped for a market-rate manager’s pay |
| One-off legal case | −$40,000 | Added back, with receipts |
| Depreciation and amortization | −$30,000 | Added back |
| Interest and income tax | −$80,000 | Added back |
| Net profit | $600,000 |
As SDE: $1,050,000
Net profit plus the whole owner salary and the add-backs. It overstates what a buyer keeps: someone still has to run the company, and that person costs about $150,000 a year.
As adjusted EBITDA: $900,000
Net profit plus the add-backs, with the owner’s $300,000 salary swapped for a $150,000 market-rate general manager. At 4x–7x, typical for a larger team-run digital business, that is $3,600,000–$6,300,000.
Why EBITDA multiples are higher
An EBITDA multiple of 4x–7x looks richer than the 2x–3.5x typical on SDE, but it is paid on a smaller, cleaner number: management is already paid for, the team stays, and the business doesn’t leave with the owner. That also opens it to private equity and strategic buyers, who pay for companies, not jobs. Never compare across the two: 3x SDE and 3x EBITDA are very different prices.
What buyers check in a team-run business
- The team: who is key, their contracts, pay against market, non-competes and whether they stay after the sale.
- Owner dependence: which clients, relationships or decisions still run through the owner.
- Normalized books: owner pay at market, family on payroll, related-party rent and personal costs all adjusted, on accrual accounts a CPA has reviewed.
- Revenue quality: retainers and recurring revenue, client concentration (no client over about 20%), churn and margin trend.
- Working capital and debt: what cash the business needs to run, and what is owed.
What the quality score weighs
- Earnings quality (15)
- Growth quality (10)
- Recurring revenue (10)
- Diversification (10)
- Transferability (10)
- Owner independence (10)
- Traffic durability (10)
- Age and track record (5)
- Documentation (5)
- Defensibility (5)
- Platform and legal risk (5)
- Buyer demand (5)
Where the score places you
- Under 40: bottom of the quick-sale band
- 40–54: quick-sale band
- 55–69: lower half of the market band
- 70–84: upper half of the market band
- 85–94: premium band, with evidence and a manual review
- 95+: strategic review by a human
Benchmark version 2026-09-v1. See every multiple.
What we verify before a number goes public
- Traffic: read-only Google Analytics 4 and Search Console access, not screenshots.
- Revenue: payment processor, affiliate and ad-network exports.
- History: the Wayback archive, backlink profile and anchor text.
- Ownership and risk: registrar control, trademark search and platform standing.
Every listing shows which figures are verified and where they came from. How a sale works · Our fees
Questions, answered
Frequently asked questions
When do you use EBITDA instead of SDE?
When the business runs on a team, with managers and real overhead, and the owner could hand their role to a salaried hire, usually from around $1M a year in earnings. We then replace the owner’s pay with a market-rate manager’s salary and apply EBITDA multiples, which are higher because management is already paid for.
How do you value a website or online business?
We multiply seller’s discretionary earnings (SDE) by a multiple from the band for its business model, placed inside that band by a 0–100 quality score, then widen the range until the numbers are verified.
Is the domain name part of a website’s value?
Yes, but inside the earnings multiple, not on top of it. A website is bought for its profit; the domain it runs on is part of that business.
How often do you update the benchmarks?
They are versioned (currently 2026-09-v1) and reviewed as completed-sale data comes in.