Cash flow

I think the variation between sites makes such a calculation useless. It all depends on your niche and lots of other factors and generalizations don't work well. Even experienced site developers have trouble predicting which sites will do well.

there are way too many variables. your best bet would be to ask for the revenue stats from the site owner, and even then, the potential for making even more revenue from the site is possible if they haven't maximized the site/traffic potential.

So how can you decide if you should invest money to develop a site or create a new website without any ideas for income potential?

how can you determine how much traffic you will receive or how much of that traffic will convert without having built a site first?

Well, it's a crap shoot. Even sites that do well today, may not do well tomorrow. The pivotal decision to me is first does the site have traffic? That's crucial. Ask yourself if the site has features that keep em' coming back. Remember, it's all about traffic! If they don't come back for something, downloads, chatting, videos, etc., stay away! Just my humble opinion, but return traffic is crucial; however you get it.... Parked pages, information portals, download sites, data mining information, and social networks are how I prioritize in order. The first being least desirable and the last being the most desirable. Comprehendo?

Domainer38 said:

Ask yourself if the site has features that keep em' coming back. Remember, it's all about traffic! If they don't come back for something, downloads, chatting, videos, etc., stay away!

Click to expand...

Even that isn't always true I have a home repair site where 95% of the traffic has been first time visits for years. They only need me when something breaks and they need help fixing it But, enough things break to drive decent traffic.

Well, I am trying to decide on whether or not I should invest a lot of money to start a site...around 10k. So, I am trying to come up with some type of financials and possible income to expect if the site were to be developed. I am trying to write a business plan and need any resources useful for hits, traffic, clicks, etc.

have you ever started a site before? it might be a good idea to at least actively play around with one and most don't cost 10k anyway. dish out some change and take the idea for a test drive. even cars have more in common with each other and you still test drive those, and websites can be much more diverse.

How much money you make depends on your business model, you could have 1,000 visitors per year, that you sell high value services and net $1,000, or you could have 300,000 visitors per year that you just advertise to and end up making $100.

What cash flow translates into a present value of $10,000... that you can calculate. I would use a "perpetual annuity" formula (look it up online). You would have to start making $500 the first year, with a growth of 5% per year, and a risk/discount rate of 10% (equivalent interest you might pay for this money). That would translate into your $10K initial investment.

From my own personal experience, think of a reasonable number that you think your site will produce, then divide by 100 for the first year. Don't get disencouraged, maybe the second year it will become 1/10 of what you expect.

Maybe try to hack some prototype yourself instead of contracting it. Launch it, and see if you catch any attention... if you do, then have those $10K on hand to contract the development.