Even though we are diligent in screening and reviewing our clients, their business financials and fundamentals prior to engaging them and listing their internet businesses for sale, occassionally we have some website businesses that precipitately descend in their traffic, revenues and other fundamentals during the course of selling their business.
Sometimes, as in quarter 4 of 2008, it was due to an overall sharp down turn that most businesses suffered a setback. However, many times it has to do more with how the seller is operating their business, or has been running it prior to contacting us to sell.
The most common reason for business revenue atrophy seems to be correlated with the seller's dip in focus, passion about their business or just laziness! Once their mind is taken off their website business and they are not actively working on evolving or improving it, many online businesses start to decay - some slowly and others rapidly. Too many sellers, especially ones that have created what are termed as passive revenue websites - such as a niche content site that serves up adsense ads or affiliate links that they earn commissions - sit back in cruise mode and don't continue to push the envelope and continue with their content and link building to improve their search engine positioning or even dominance.
We always counsel our clients to continue working their internet business for sale as if they were planning on keeping it and striving to hit the next elevated traffic and revenue targets. Websites for sale that show progressive earnings and traffic growth are always more attractive to buyers and sell for larger multiples in the end.
Recently, we have experienced a few listings where our clients have pretty much dropped the ball and let their online business's atrophy to the point where we can no longer get behind the opportunity and continue selling it for them in good conscience - even at a fire sale. Consequently, when it hits this tipping point, it is time for us to jettison the business listing from our current websites for sale page and file it in archives where it will rust along with other sites that met the same fate because of their truant owners that inevitably were trying to dump their business before it started the downward inertia.
To preserve our websites reputation of presenting quality internet business for sale opportunities, we regularly assess our inventory and have taken to culling the sites that no longer measure up to our standards or our educated and savvy buyers' standards who subscribe to our buyer alerts or regularly visit our website and who count on us to deliver a quality product and service.
David Fairley
Founder & President
www.websiteproperties.com
Currently rated 4.0 by 1 people
The most common question posed by sellers when considering working with a website business broker like us is "how long will it take to sell my internet business for sale?" Not having a crystal ball to extract the exact date and time, we usually provide our potential clients with - a standard time to complete a sale and close is 4 - 6 months on average. Going into more detail with sellers about their website business fundamentals, financial history and trends, internet business model, and online niche typically gives us a better picture of the anticipated timeframe that a 'potential' sale may transpire.
Ultimately, we explain to our clients or potential sellers that the website should be compelling and attractive itself to garner a lot of interest and get offers quickly. If it has great financials - strong growth, good profit margins, more than 3 years history, etc it is going to be very appealing to the pool of savvy buyers searching for quality sites currently. The greater the fundamentals pertinent to internet businesses, such as large monthly unique visitors, excellent search engine positioning, large customer database, good domain name, etc, the more appealing and attractive the business opportunity will be perceived.
The business model - ie ecommerce, dropship, recurring monthly membership, afiliate or pay per click passive sites - will also be important features of the website business opportunity. The niche the website operates in also determines interest as well. The biggest single determining factor is likely asking price in the end though. A site priced out of the acceptable fair market range will sit for a longer time and not sell or get offers on it. Just like the real estate market, internet business opportunities need to be fairly priced so all parties feel like winners.
In the end, our job as website business broker specialists is to facilitate the process by getting excellent exposure for our clients website businesses. We accomplish this by our excellent organic search engine positioning for dozens of major keyword phrases like websites for sale, by listing the opportunities in multiple business for sale portals and by emailing our subscribers our newest listings. We can and do get the opportunities in front of a large majority of internet business buyers, but the business ultimately sells itself. Consequently, we are very particular about what clients we engage and list. They must have all or most of the qualities of a financially solid, fundamentally strong online businesses if we are going to represent and sell them.
If we like the internet business and would like to own it, we pretty much know it is going to be a site that some other buyer will want to acquire too! In summary, some of the best opportunities sell within the first month of a listing not including due diligence and closing and the majority of our listings close in 3 - 6 months.
President, www.websiteproperties.com
Currently rated 3.0 by 1 people
With lay offs surging well over the 500,000 mark monthly, millions of recently unemployed and highly skilled and educated people are taking the plunge into the entrepreneurial waters of developing or buying their own small business. Because internet businesses seem to have statistically greater resilience in this global downturn than traditional offline businesses, many of the swollen ranks of laid off white and blue collar workers are searching for their next job online as self employed website business owners.
We have experienced a large influx of buyer interest from regular folks who are looking to buy themselves a job or new career. The internet offers many the opportunity to work from home, with low overhead and earn a solid income without the long commute, corporate politics, and brutal hours. Website businesses can offer owners a much more flexible schedule as well as the excitement of owning a living breathing entity that operates 24/7 365 days a year - potentially from the comfort of your own home.
While many brick and mortar businesses have suffered locally, regionally and nationally from the recession, a large percentage of online businesses have maintained robust sales and bottomlines because they access a larger market, usually in a very well defined niche. Many employees have dreamed of owning their own business, but typically never have the courage to quit their job and take the steps to making it a reality. In a twist of ironic fortune, many are now taking the plunge out of necessity because the fear of not finding employment or a decent replacement salary are greater than taking on the risk of starting or buying an existing website business for sale.
Consequently, we seem to be experiencing an upwelling of internet business for sale interest that was not as present when the economy was humming along and people were content to punch the clock. This is great news for online business sellers with quality websites for sale, because their solid cash flow business opportunities are in higher demand now.
In fact, Websiteproperties.com is literally in short supply of good ecommerce website businesses and other internet business models to offer the burgeoning ranks of newly "minted" unemployed future internet entrepreneurs! We are happy to hear from sellers with great online businesses ripe for acquisition.
President , www.websiteproperties.com
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Recently, in conversation with a buyer that was agressively pursuing multiple websites for sale in our listings, I discovered subsequently that their mode of capital was going to be coming through an SBA loan. Upon hearing this I explained to the buyer that many of the deals would not pass the stringent criteria of the SBA and so were not worth spending any more time on. This would be internet business titan fervently argued that their SBA lender was the top in the country and had already preapproved them and greenlighted their acquisitions despite the lack of history and tax returns typically required as a minimum.
Last week I received a call from this buyer with a request for contact information for other non traditional lenders, as it happened, the SBA lender had gone into a tizzy because the SBA had changed the rules suddenly about lending to small businesses. In a nutshell, they have implemented a change that is the durth of financing small businesses effectively, especially internet based businesses. The fundamental change was there value prescribed or allotted to what is called the "goodwill" of the companies value. In essence, the non material or intangible assets of the business - which outside of the computers, servers(if included) and inventory - are the only real tangible items included in an internet business! They have restricted this Goodwill amount to a maximum of 50% or $250,000 - whatever is greater - to be the appraised value of the business. In other words, historical cashflow the website business is throwing off, no matter if it is substantially greater, will not be a factor in determining the value that the loan can be lent against even if it is higher than their maximum goodwill ceiling.
What does this mean for prospective website business buyers? They may as well forget about seeking this type of financing for any website business for sale deals worth more than the upper limit imposed. Furthermore, it reinforces my previous posting about the greater emphasis on owner financed deals more than ever - which is a positive for buyers.
Internet business sellers need to understand that the ramifications of this change means that they will need to be more flexible with their sale terms as well considering the credit squeeze that seems to getting worse. Of course, if they choose not to offer owner financing, sellers should expect to receive more aggressive all cash offers that are further below their listed asking price. Offering terms with a decent interest rate to a buyer is a nice way of receiving a good return on your money as well as the benefit of some tax deferral, so this sellers should be open to this type of structure especially if it means closing a sale.
Until the government realizes that it is shooting itself in the foot again by debilitating the true engine of growth - being the entrepreneur and the small business market - both sides of the transaction will need to facilitate each other for a successful transaction to occur in most cases.
Currently rated 5.0 by 1 people
I was recently lassood by a family member to assist in their quest for an online business for sale they could buy and operate to create a steady stream of income. The process of working with my sister has been pretty insightful to say the least! What was quite revealing is how daunting the internet and doing business online appears to be to the uninitiated. There is a lot of fear and apprehension and sense of overwhelm that new buyers with no experience have when starting the process.
The single biggest step for new and future internet entrepreneurs is to get clear on what areas of interest they have, like gardening, organic food, healthy lifestyle, etc and then hone in on a specific segment within the category. It is critical to your future success to target a clearly defined niche. When you are looking to buy a website business, you should be searching for internet business opportunities that are more narrowly focused and specialized. Websites that try to be too broad - something for everybody - often fail to maximize the true potential of a specific niche. Trying to sell tools verses selling only garden hand tools is an example or focusing on educational toys rather than just toys.
Staying narrowly focused doesn't mean you can't sell a broad range of products or services within the specific niche. For example, a specialized kitchen gadget niche selling only salt and pepper shakers could offer these items in multiple categories and price ranges and potentially offer thousands of different salt and pepper shakers.
Another benefit of niche sites is they tend to dominate the natural search engine results because they are extremely relevant to the search queries from surfers. This means more targeted traffic, higher conversion rates and greater sales and profits overall.
Often when you have identified specific areas of interest, it becomes easier to see specific opportunities within these categories. You will be able to refine your search for a website purchase much easier and recognize a good opportunity that is interesting to you after engaging in this process. Even if websites on the market currently don't fit the criteria of the niche segments you are interested in, you can always contact websites within the niche directly and ask them if they have interest in selling.
The third option of course is, build it yourself if you can't find a good existing internet business opportunity to buy.
Either way, finding an interesting focused product category, subject matter or service area will provide a higher probability of success than a website hocking thousands of products in hundreds of different niches.
Good hunting!
The opinions expressed herein are meant to provide information based on the personal experience of each broker posting to this blog.