Many individuals do not ask this question and instead find themselves pummeling additional resources into a site that does not have a lot of potential. Making the decision to continue investing in a site or abandoning it and cutting your losses can be a difficult one.
In this post, I’ll look at two things to consider in determining whether your site is an asset worth maintaining.
Note: This article is only relevant if you have an existing affiliate business that is a minimum of 6 months old. If your site is under 6 months, you’re still in the ‘search sandbox‘ and can’t accurately evaluate it’s value.
Evaluating Potential Growth
Projecting future growth onto a site is one of the most difficult things a site owner can do. It’s extremely difficult to remove personal biases about the amount of time, energy, and even love invested into the site and come up with a realistic assessment.
I’ll leave the details of how to evaluate potential growth for another post and instead focus on how to determine if that growth indicates a potential asset.
Basically, I look at two primary metrics:
- Revenue per Thousand Users
- Historic Traffic Growth
For the first, I try to determine if the revenue numbers look reasonable. If I were to invest a minimal amount of time or money into maintaining (not growing) the site, what would be a good ratio of return I could expect? If the numbers seem extremely low (maybe $10-20 per thousand, for example) I might ask myself why and see if there are any adjustments I could make to improve them. New products? Better ad placement? In short, try to get a sense of return per user to determine if the growth is worth it.
In addition to the revenue side, it’s extremely important to consider the growth potential of the site. If the site is young (less than a year) it can be difficult to get an accurate read on its potential, because it is still in the process of being recognized and validated by search engines. If the site is a few years old, however, you can determine whether traffic is static or consistently growing. Try extrapolating this number out using the revenue figures and you’ll begin to get an idea of what the site is worth.
Consider Non-Monetary Liabilities
The second main point to consider when determining if a site is an asset is the liabilities involved. This is easy when it comes to monetary liabilities, but far more difficult when talking about non-monetary liabilities.
Your time is valuable. How much time do you spend on your site every month? Does the site provide a return that justifies this time, or could your time be better spent elsewhere?
Again, if your site is new it is difficult to evaluate this aspect. It is normal to invest more time at the beginning of a site than it takes to maintain it once established, so you need to determine your time value in relation to an investment of that time, not simply a month on month return. Consider whether your time spent on the project is increasing or decreasing in relation to the income generated. Then you can begin to get a sense of the liability aspect of your site.
Remember that evaluating your site as an asset is extremely important if you approach your affiliate site as a business rather than a personal site, or if you want to one day scale your business. Successful businesses build assets. Make sure yours is doing the same.