Web site POTENTIAL
Many previous posts have been guides and experiments for buying web sites. There is one factor that you need to be aware of when buying a site and if you are not careful it will drive you mad and leave you out of pocket. That factor is called “Potential“.
What almost always happens when you wish to buy a site is the seller will give you the raw facts and the potential. The raw facts are things like: uniques per day, monthly revenue, pagerank, backlinks, content etc….
The above is all the info you really need, but without fail you will then get an oscar winning speech from the seller that goes something like this:
“I know the site is only making $2 per month, but I have not really put much effort into it and in the right hands it could make thousands per month. The potential is huge for the right person.”
I am sorry but anything even resembling the above is complete bollox!
I am not saying that potential should not be factored into the price, hell, I actively look for sites with potential. But at best it should be only marginally factored in.
The issue I have with potential is that site sellers always look at the best case scenario. But in the real world it doesn’t work like that. I could go and start a blog tomorrow that is just a blank page on blogspot. But I could POTENTIALLY find the cure for cancer and post it on my blog and then it would be worth billions.
That is an extreme example, but this is how the site sellers think.
Imagine going on E-bay to sell your 1990 Ford Escort that has just failed its MOT and is falling to pieces. Here is how most web site sellers would sell it:
“1990 Ford Escort for sale. I haven’t had time to properly look after this car and that is why it failed its MOT, but in the right hands it could be done-up by a pro mechanic and given a new body, new engine, new wheels, new dashboard and could potentially be a Porsche. Infact, if you sold the Ford and replaced it with a Porsche then you would have a Porsche and I think this really shows the potential the Ford has. With that in mind I want $60,000 for the Ford Escort.”
The above would be laughed at and probably deleted from the E-bay listings, yet on a daily basis web site owners all over the world are relying on potential to inflate the actual value of their web sites.
There are always extreme cases where potential is genuine. But guess what, in those cases the site owners DON’T wish to sell the site.
Another trick they always play is this:
“The reason I am selling the site is because I have another huge project on the go, and I don’t have the time needed to reach the potential of this site anymore.”
“My gran is ill and I need the cash to help her”
“I am just leaving college and need to pay off my student loan. Oh how I wish I could keep this amazing site, but whilst tears are rolling down my cheek I must say that I will be saying goodbye to my beautiful web site and will be selling it”
NEVER believe the reasons for selling. In most cases the reason for selling will be that the site owner had big plans for the site but then realised that a)he/she failed b)he/she doesn’t have the skills needed c)he/she doesn’t have the huge amount of free time needed to make it work.
So if they failed so badly, how come they think it will be so easy for us to make it work?
Personally I am sick of site owners using potential as an excuse for their own failures. So if you see a site owner who is using potential as the main source of value to his/her site… please send them the url for this article.
POTENTIAL – TOGETHER WE CAN CRACK IT.
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