An Asset! My Website - Really?

Update Your Business Asset Register 

Most businesses these days will have an asset register. After all, it's an essential requirement for depreciation write-off against taxable business income.

Add Your Website To Your Assets

As well as physical items, such as plant, equipment, premises and stock, business assets can also include intellectual property and copyright material.If you own a commercial website, you may want to include it in your asset register too. Why - because if you decide to sell your business, to get the best price you'll need to consider the value of all your business assets. 

Why Websites Are Valuable 

To illustrate, try Googling "Perth commercial lighting".

If your web browser is set up like mine (standard settings) you'll see that H.I.Lighting Pty Ltd (www.hilighting.com.au) is the top unpaid (viral) search result in the first page of Google's search results (SERP), as they appear today. The only higher listings are those where Google is being paid to guarantee top ranking, and that can get very expensive. 


H.I.Lighting doesn't pay Google, yet fortunately because of the number of hits it gets and the time its been on the Web, it has a very valuable SERP position within a highly competitive industry. You should see a similar search result for this company if you Google "industrial lighting specialists Perth".

You'd have to wonder what someone would be prepared to pay to get this kind of Google search ranking if they were already in the same business, or wanted to be. And of course, there's also the initial cost of designing and building the website, valued at the time of sale. A website that cost $5,000 to design and build a few years ago will probably cost more today.

But, there's more to the value of a website than what it cost to build.

What's a Website Worth?

This is not an easy question to answer. It will depend on how the website impacts on your business, and what it adds to your "bottom line". There are various ways to track and record this information, and we can cover that in a later article. However, our advice would be :

• keep records on the effect your website is having on your business. Your accountant should be able to explain what records you need to keep. A good web designer will show you where and how to get this information
• if you haven't been keeping these records, start now and keep them up to date
• ensure you have an independent specialist valuation for your website before you and your accountant sit down to work out just exactly what your whole business is really worth should you choose to sell it.

It might surprise you to discover that a website generating 20% of an annual business turnover of $3,000,000 is delivering $600,000 into the operation. If the business runs on a net profit of say 10% of gross turnover, then the website generates $60,000 of the company annual profits. Just for fun, lets say the formula for valuing this particular type of business is 3 times annual net profit (it will take 3 years of profit to repay the cost of purchasing the business). Then the website is potentially worth $180,000. That's some asset!

You might want to talk to your accountant - soon!