METHOD: Pre-Revenue: Direct Advertising Income
FAIR MARKET VALUE = $43,144 @ 10% Profit on Ad Sales (For Comparison Only)
FAIR MARKET VALUE = $86,288 @ 20% Profit on Ad Sales (For Comparison Only)
FAIR MARKET VALUE = $129,432 @ 30% Profit on Ad Sales (Comparison Only)
OWNER’S OPINION: Low End Values Appropriate for FixturesCloseUp Value
DATE OF ESTIMATE: 2015 Design:Retail Online Rates

 

Fair Market Value (FMV) is an estimate of the market value of a property, based on what a knowledgeable, willing, and unpressured buyer would probably pay to a knowledgeable, willing, and unpressured seller in the market. An estimate of fair market value may be founded either on precedent or extrapolation. Fair market value differs from the intrinsic value that an individual may place on the same asset based on their own preferences and circumstances.

Since market transactions are often not observable for assets such as privately held businesses and most personal and real property, FMV must be estimated. An estimate of Fair Market Value is usually subjective due to the circumstances of place, time, the existence of comparable precedents, and the evaluation principles of each involved person. Opinions on value are always based upon subjective interpretation of available information at the time of assessment (SOURCE: Wikipedia)

 

CALCULATIONS:

SITE COMPARITORS

DesignRetailOnline.com
Average Monthly Visits: 38,200 (Source: Similarweb.com Mar-Apr 2016)
Searchable Pages: 22,000  (Source: Google Site Command, May 2016)
Page Views per Visitor: 2.25 (Source: Similarweb.com Mar-Apr 2016)
Klout Score 49

FixturesCloseUp.com
Average Monthly Visits: 10,900 (Source: Similarweb.com Mar-Apr 2016)
Searchable Pages: 61,200 (Source: Google Site Command, May 2016)
Page Views per Visitor: 3.15 (Source: Similarweb.com Mar-Apr 2016)
Klout Score 47.46

ASSUMPTION:

Overall D:R offers 25 online advertising spaces and opportunities at various SOV ratios. Of the diverse advertising opportunities sold by D:R, it is assumed for the basis of a valuation calculation only 6 Home Page ROS (Run of Site) ad spaces are the source of the site’s sales and profits. The 6 ad spaces used for this valuation are 1 Top Leaderboard and 3 Medium Rectangles, 1 small Spotlight, and a Bottom Anchor Leaderboard all offered with a SOV (Share of Voice) of 20%.

DESIGN:RETAIL ADVERTISING RATES:

Top Leaderboard, 728×90, SOV=20%, Gross Rate $2,000/mo
(SOV 100% = $10,000/mo or $120,000/yr single advertiser)

Top Med Rectangle 1, 300×250, SOV=20%, Gross Rate $2,000/mo
(SOV 100% = $10,000/mo or $120,000/yr single advertiser)

Middle Med Rectangle 2, 300×250, SOV=20%, Gross Rate $1,500/mo
(SOV 100% = $7,500/mo or $90,000/yr single advertiser)

Spotlight, 300×100, SOV =20%, Gross Rate $1,300/mo
(SOV 100% = $6,500/mo) or $78,000/yr single/advertiser

Bottom Med Rectangle 3, 300×250, SOV=20%, Gross Rate $1,100/mo
(SOV 100% = $5.500/mo or $66,000/yr single advertiser)

Anchor Leaderboard, 728×90, SOV=20%, Gross Rate $1,100/mo
(SOV 100% = $5.500/mo or $66,000/yr single advertiser)

GROSS INCOME ESTIMATE:

Top LeaderBoard = 12 Mo x 5 Advertisers x $2,000/mo = $120,000
Med Rect 1 = 12 Mo x 5 Advertisers x $2,000/mo = $120,000
Med Rect 2 = 12 Mo x 5 Advertisers x $1,500/mo = $90,000
Spotlight = 12 Mo x 5 Advertisers x $1,300/mo = $78,000
Med Rect 3 = 12 Mo x 5 Advertisers x $1,100/mo = $66,000
Anchor LeaderBoard = 12 Mo x 5 Advertisers x $1,100/mo = $66,000
—————————————————————————————————

Annual Total Revenue Generated = $540,000
(If all ad positions and 100% SOV sold)

NET PROFIT ESTIMATE:

It is assumed that the minimum acceptable profit from this enterprise would be 10% and probably much higher. If an investor could make 8% to 12% annually in the stock market, at a minimum, a profit of 10% from a website would be required to divert investment to a web enterprise.

D:R Minimum Annual Net Profit = 10% x $540,000 = $54,000
(The $54,000 does not include the addition of Flexible Expenses
which would result in a true annual Discretionary Cash Flow
or Gross Profit)

Assuming a direct relationship of FixturesCloseUp to Design:Retail
based upon ad impressions (visits x page views) the proportionality
calculation becomes…

Design:Retail: visits x page views = 38,200 x 2.25 = 85,950 ad impressions
FixturesCloseUp: visits x page views = 10,900 x 3.15 = 34,335 ad impressions

Proportional FixturesCloseUp profit projections then equal…

FixturesCloseUp Profit = D:R Profit (FCU Ad Impressions / D:R Ad Impressions)
FixturesCloseUp Profitt = $54,000 ( 34,335 / 85,950)
FixturesCloseUp Profit = $21,572

MINIMUM VALUATION:

Business valuations based upon Annual Discretionary Cash Flow can range variously on Multipliers from 1 to 5 (Monroe and Gottlieb cite 1 to 2.5). Using the lower starting point of Minimum Net Profit (not higher Discretionary Cash Flow) and an assumed multiplier of 2, a conservative valuation of the FixturesCloseUp at D:R rates would be…

Minimum Net Profit x Multiplier = Estimated Valuation

$21,572 x 2 = $43,144 Estimated Valuation @ 10% Profit
$43,144 x 2 = $86,288 Estimated Valuation @ 20% Profit
$64,716 x 2 = $129,432 Estimated Valuation @ 30% Profit