When I first started out, I honestly had no idea what to expect when it came to “how much” my websites could make. But now, fast forward 7 years, and now I plan it out from the first day I launch a site.
So, just how do I do that?
It started by tracking my site’s earnings in relation to the amount of content on the site. Over time, I was able to calculate a rate of “earnings per article” based on my own experience. This allowed me to create a tool that I use for my own planning, which helps map out exactly how much I need to invest in a website before it becomes profitable.
Why’d You Create This Tool?
Honestly, I got sick of not knowing what to expect when building out a website. And I would often quit after building out a smaller website, without giving it enough time.
You need to give your website at LEAST a year before you can really judge if it’s going to make any meaningful revenue or not. I wanted something I could plug into and just say “ok, here’s what I need to do in order to start earning some revenue.”
So, I put together a very basic spreadsheet, assigned a dollar amount to an article, and started using it every month.
And I now use it on every.single.website. Doesn’t matter if I’m starting it from scratch, or if I’m adding content to a larger site. This calculator can be used for every type of website.
Calculating Earnings Per Article
Earnings per article will be different for every site. When I start a site, I start with a conservative figure during the first year, with a goal to earn an average of $15 per article from every article on my site. This is based on my own experience as a website owner.
I’ve owned sites that make close to $50 per article, and I know some webmasters who own sites making over $100 and up per article across their portfolio.
With a new site, it takes at least a year before it starts earning significant revenue.
A good goal after a year of building out a site is that each article earns about $15 per month across the site on average.
If you are just starting out and want to be on the very conservative side, use $10 per article, per month. The amount you earn per article each month is a variable field in this tool, and you can adjust it according to your own experience level.
Keep in mind, ALL of these assumptions depend on your website ranking well in Google!
If you haven’t joined our free Facebook Group to follow along with the strategies we use to build profitable websites, make sure to sign up to get the strategies you’ll need to ensure you’ve built a website that generates free organic traffic.
Does Time of Year Matter?
Yes and no.
A site started in January, will enter Q4 in months 9-12, and their revenue per article will likely be higher than someone who started in June, and enters month 9-12 in Q2 of the following year.
During Q4, advertiser revenue is higher, and people buy more products. This means Q4 revenue can be higher for website owners in Q4 during other times of the year.
So someone starting a website in January, may make more in a year than someone starting a website in July. This is why I use a conservative average. I’ve found that a $15 per article average earnings in the first 12 months is usually a good barometer for every type of site, as long as there’s traffic.
Content Profitability Calculator
The tool I’ve created uses a baseline goal of $15 per 1,000 visitors by the end of the first year. My goal for any website I create is to get 1,000 visitors to each article on my site, every single month.
I figure, if I can do this, there will be other articles on my site that are likely to earn more, which is a bonus and will bump my average. But by assigning a conservative value, it allows me as a business owner to sit down to figure out how much money or sweat equity I need to invest to make a content-based website profitable.
Most commercially oriented articles will produce more revenue per article. Commercially oriented articles typically have “buyer intent” and advertisers are more willing to pay a higher amount to have their ads seen on these pages. You’ll also have higher converting affiliate opportunities when potential buyers land on those pages.
Ultimately there’s no perfect way to calculate the potential earnings for a website, but this tool will allow you to estimate and get an idea of what to expect.
A Few Disclaimers
Yes, we are giving away this tool for free. But there are a few disclaimers I’m going to make with it. Let’s face it, there’s always room for user error when it comes to data entry.
- This is a free tool, use it at your own risk.
- We aren’t responsible for your success or lack thereof.
- We don’t guarantee success just by using our tools or following along with our journey.
- Investing in a content-based business carries risk, just like any other type of business.
- Revenue can, and will vary by website, niche, etc.
- Please watch the video, or read the instructions. Several fields require manual data entry.
- For this calculator, we assume articles are on average 2,500 words (cell D12).
- Changing cell D12 will impact the entire data waterfall, so we recommend leaving it “as-is.”
Digital Asset Values
There’s a field called “Digital Asset Value” where I’ve assigned some rudimentary math for assessing a website’s value. Please understand that we aren’t brokers. This is just so you can get an idea of how a website “can” be valued.
For this formula, I’ve done the following:
- List the Last 3 Months Gross Revenue
- Subtract the Last 3 Months Content Cost
- Take the Last 3 Months Average of the remainder
- Multiply the remaining value by 30
From my own experience, websites can sell for anywhere from 20 to 40 times their last 3, 6, 9 or 12 month’s net revenue. For bigger deals, it’s quite possible to see a 5 years net revenue for a well established brand, but these are deals in the multi-million dollar range.
All I’ve done here is some basic math. If you have additional expenses outside of your content expenses, this will impact the value of a website, as most sites are valued based on net revenue.
Again, Mark and I aren’t business/website brokers.
My suggestion is to enjoy the free tool we provide here. After a year, you can reach out to FEInternational, Empire Flippers or AlphaInvestors and get a proper website valuation. Or you can use a resource like Motion Invest to sell it quickly, or have them help you sell it in an auction-style format.
Using The Calculator
In this section, we walk through how to use the calculator both on video and in text. If you are a visual person, I recommend watching along as I take you through the calculator functionality. Otherwise, follow the steps below and you can start to see exactly what your site may be earning in a year from now. You can download a copy of the spreadsheet below.
*Please Note: All cells that require manual data entry are highlighted with Orange borders! You don’t need to touch any of the other formulas unless you choose to do so. I have started this spreadsheet with our case study defaults for content production. You will want to change these based on your own workflow and content investment strategy.
Step 1: Figure out your base daily content production.
Step 2: Place the “words per day” in the field of which you yourself plan to write. For newer website owners, a good target is to produce 500 words per day, which is about 15,000 words per month. This number will go into cell B17. Leave the cost per word blank for this field in cell C17.
Step 3: Place the “words per day” in the field of any writers you plan to hire (cells B18-B20). If you are using a content agency, and you are following along with our case study, we plan to order 500 words per day for our case study sites at .06 cents per word. This works out to about $900 per month in content costs. Enter the cost per word in cells C18-C20.
Step 4: Enter the days in a month in Cell B24. This is set to 30 days by default.
Step 5: Take the value from cell B30 and enter it into cell B3.
Step 6: Take the negative value from cell C30. Now enter it into cell C7.
Step 7: Enter your expected earnings per article in cells B8 through M8. This figure is what drives cells B9-M9, which is your total monthly revenue. By default, I’ve set these to $0 for the first 4 months of building a website, slowly working our way up to $15 per article.
Step 8: Repeat these steps for each month. You can vary the word count each month if you plan to scale up or down production. You may want to invest all of your profits later in the year and ramp up your content budget.
Step 9: If you are thinking of selling your site after a year, you’ll want to consider ramping down content costs in months 9-12 (cells K7-M7) for the sake of calculations. This calculator bases the net valuation of a site on month 9-12’s profit, which is revenue less content costs. You’ll see that your “estimated value” in field J20 will be far lower if you’ve continued to invest in new content, as the new site owner would be expected to do the same to maintain earnings.
Step 10: This step is for seasoned sites only. If you have a seasoned site, add your existing articles into cell B12. Then add your existing word count into B13. Use your current Monthly revenue per article for cells B8-M8. You can adjust this up or down accordingly.
Hopefully you’ve seen that creating a content-based digital asset can indeed be profitable! As mentioned previously, this is all dependent on your website ranking well in Google. You’ll need to make sure you produce quality content, and structure your website in a way that Google loves.
Remember that this is just a tool, and doesn’t substitute for getting out there and actually doing the work! If you want additional tips & tricks, make sure to follow along in our Facebook Group, and sign up to our email list!
Feel like we’ve missed anything? Drop us a line below in the comments below!