How much is my forum worth?

This subject is coming up more and more with me.  I’ve touched on it before.  I spoke about it on a podcast recently.  I discuss it in forum threads too.  Everyone has an opinion on the topic, and whether they’ve bought or sold a forum doesn’t seem to prevent them from offering it up.   I’ve bought and sold over a dozen active forums (and am always in the market to buy more, contact me if you have something to sell), so hope my experience can be of help to others.

From your first steps in researching how to value a forum, you’ll see people mentioning a specific multiple of monthly earnings.  This measure is of limited use, and can as often be a way of someone getting you to sell your forum too cheaply as a way to get too high a price on a forum sale.  When you’re buying a car, would you pay more for a car because it gets higher gas milage than another?  Of course not.  A forum’s revenue is very important, as is the gas milage of a car, but you don’t set the value based on that alone.

What else is there?  Well, the most important factors are traffic, topic, members, and content.  I’d sooner pay more for a forum getting loads of traffic than one that’s maximized its revenues.  Why?  A forum that has already maximzed its revenues leaves little room for improving, while a forum that gets loads of traffic leaves me room for improving the revenues on my own.  Thus, given the choice between a forum with lots of traffic and little revenue against one with lots of revenue and little traffic, I’d go for the one with traffic assuming all other factors near equal.

Why is topic important?  Well, you don’t want to end up owning a forum on a topic you hate, right?  That’s obvious.  But, you also want to have a forum that has a topic that will appeal to advertisers, if you’re looking at it as an investment.  If you’re getting into forums out of a passion for a specific topic, then it’s probably obvious to you which forum you want to buy, but when you get into it as an investment, you want to be sure that you’re getting a forum that will attract advertisers.  So, two forums equal in all other factors, you want to buy the one that attracts advertisers.  So, you’d pay more for that one.  The other side of the coin, if you’re selling a forum that is on a topic that advertisers won’t touch, you might not attract as high a sales price.

Members and content go hand in hand.  One of the most attractive aspects of owning a forum is that it attracts members, and the members generate the content.  In fact, it’s the whole concept behind a forum.  Great content on a forum is self-propagating.  Good members, make good discussions, and good discussions encourage more new members to join in and make more good discussions.  So, a forum that is active, well moderated, and has loads of quality discussions, adds value.

So, where do you get the price?  That’s difficult.  Look at some recent sales.  I’ve posted before on places where you can find sales.  Go in the past sales and find out what sold for how much.  Find something similar to yours.  Take into consideration the factors that I’ve mentioned.  Adjust your pricing accordingly.  If your selling a forum, come into it with a price in mind, that’s going to make you happy.  Ask for maybe 25% more than that price.  If you get into negotiations, you can adjust down and find a happy middle ground where both buyer and seller feel good about the deal.  If your’e buying, ask the seller what they want to get for the forum.  If they don’t know, point them to this post.