Most online businesses are valued using a multiple of EBITDA—Earnings Before Interest, Taxes, Depreciation, and Amortization. This gives buyers a clear picture of your company’s core profitability, and helps them compare opportunities across industries.

Typical multiples for online businesses range from 2.5x to 6.0x EBITDA, though deals can fall outside this range depending on growth, niche, and buyer demand.

Multiples are influenced by two things:

  • The strength of your business (financial performance, operations, customer metrics)

  • The current market environment (what similar businesses are selling for, and how active buyers are)

Let’s dig into what really drives value.

What Buyers Look for in an Online Business

There are six key areas that buyers focus on when evaluating an online business:

1. Revenue Quality

Buyers want to understand where your revenue comes from, how predictable it is, and whether it’s growing. Recurring revenue models (like subscriptions or memberships) tend to be more valuable than one-off transactions.

Key drivers of strong revenue quality include:

  • Diversified product or service offerings

  • Predictable recurring or re-billing revenue

  • High customer lifetime value (LTV)

  • Minimal dependence on a single customer, SKU, or channel

  • Low churn and refund rates

The more predictable your income, the higher your valuation is likely to be.

2. Profitability and Margins

Profitability is a major valuation lever. Strong, clean margins give buyers confidence that the business can continue generating cash—or reinvest in growth.

Things that increase perceived value:

  • Consistent EBITDA margins (ideally 15%+)

  • Scalable cost structure

  • Efficient paid acquisition (e.g. low CAC, strong ROAS)

  • Minimal personal expenses or one-off costs in your financials

Buyers also look at how much profit is truly transferable post-sale.

3. Operational Independence

The more your business can run without you, the more valuable it becomes. Buyers want to know the company will keep performing even after the founder steps away.

To increase value:

  • Build SOPs for key processes

  • Delegate or outsource fulfillment, support, and marketing

  • Create clear roles and responsibilities for team members

  • Minimize founder involvement in daily execution

If you’re the bottleneck, buyers will see risk. If your team and systems are dialed in, they’ll see opportunity.

4. Customer Metrics

Buyers love businesses with happy, loyal customers. Key metrics include:

  • Retention rates (especially for subscriptions or memberships)

  • Repeat purchase rates (for e-commerce)

  • Churn rate

  • Average order value (AOV)

  • Email and SMS list engagement

  • Social proof (reviews, testimonials, brand sentiment)

Make these metrics easy to access and showcase your brand’s long-term stickiness.

5. Growth Potential

A buyer isn’t just buying your current numbers—they’re buying what’s possible. Highlighting untapped growth levers can significantly improve your valuation.

Growth drivers might include:

  • Expanding to new customer segments

  • Launching new products or services

  • Entering new geographies

  • Improving conversion rates

  • Leveraging owned audiences or underused platforms

  • Enhancing retention strategies

Founders who present a clear growth story often receive stronger offers.

6. Risk & Dependency

No business is risk-free—but buyers will assess how concentrated or vulnerable your model is. Key things they look for:

  • Platform dependency (e.g. all traffic from Meta or all revenue through Amazon)

  • Supplier or vendor reliance

  • Customer concentration (e.g. one client = 40% of revenue)

  • Seasonality or pricing sensitivity

The more diversified and resilient your business is, the more confident a buyer will feel.

Bonus Factors That Can Boost Your Valuation

Once the basics are strong, additional value-drivers can take you to the next level:

  • Proprietary assets (software, content libraries, tools, etc.)

  • Brand equity (recognizable name, strong domain, audience trust)

  • Documented IP or processes

  • Low turnover, high-performing team

  • Recurring community engagement (online courses, events, etc.)

These factors help you stand out in a crowded buyer market.

How to Improve Your Valuation Before You Sell

Even if you’re not planning to sell right away, there’s a lot you can do now to drive value:

  • Clean up financials
    Use accrual accounting, prepare monthly P&Ls, and remove non-operational expenses.

  • Document everything
    Standardize marketing, fulfillment, and onboarding processes. The goal is to make your business easy to take over.

  • Automate and delegate
    Make sure the business can run without you. That’s a huge confidence booster for buyers.

  • Track your metrics
    Use dashboards to monitor LTV, CAC, conversion rates, and traffic sources.

  • Strengthen your growth story
    Buyers love businesses with a clear path to scale.

Final Thoughts

When it comes to selling your online business, valuation isn’t just about the numbers—it’s about the full picture.

Buyers want profitability, stability, and upside. By building systems, tracking the right metrics, and thinking like a buyer, you can set yourself up for a smoother sale and a stronger outcome.

If you’re curious what your business might be worth—or what you could do to increase that number—we’d love to help.