Preparing For Success.
You’ve spent countless hours designing your website, and ensuring the content is entertaining and relevant. You’ve managed to secure quality, paying advertisements, and built up a loyal customer base and following. After putting in all that time and probably a little capital of your own, you’ve taken your website as far as you can and are ready to start a new project.
Selling your website can be exciting, confusing, and even frightening at times. You don’t want to simply list your website on Craig’s List like you would a car or coffee table, but trying to navigate through an online auction can be almost as time consuming as building an online business.
An online investment company can take a lot of the time and frustration out of selling a website, and still ensure that you receive fair compensation.
Whether you choose to “go it alone” or take advantage of an online investment there are a few things you need to know before you list your website for sale.
Make it Easy for Buyers to Understand Your Business
This first step is the most important if you want to attract qualified buyers. Your website will not be the only one for sale and chances are there will be at least one or two similar businesses competing with yours for potential buyers.
This means that you have to put in a little more work to ensure your business stands out and attracts the right attention.
Spending a few minutes now to help prospective buyers understand your business can result in a faster sale and more money in your pocket. One easy and extremely effective step you can take to explain your business to potential buyers is to write a brief introductory letter or sales pitch.
Good Sales Pitch
Even though your website is your “baby” and as far as your concerned this should be enough to entice buyers, simply letting everyone know that you created it is not enough information to encourage anyone to make a serious offer.
A sales letter briefly introducing your website is the best way to explain your website and start weeding out non serious buyers.
It also has the added advantage of answering many of the commonly asked questions. Some of the items that should be briefly highlighted in the sales letter will include:
- A brief introduction to your website with a few facts about you included in the description.
- One or two sentences describing the site’s history.
- A brief explanation detailing why the online business is for sale.
- Two or three sentences explaining what your site has to offer a new owner.
It is important to remember that this is only a brief introduction to your website, and this sales letter is only meant to entice prospective buyers. You will get into the actual details later in the selling process.
What Information Do You Need to Have Ready?
The introductory letter or brief sales pitch will help explain your business to potential buyers, but this is not all of the information you will need to have ready.
Once a prospective buyer has indicated their interest in the site, they will expect to be able to have access to the following information. It should be mentioned that if you place your website up for sale before thoroughly compiling the necessary data, it can cause potential buyers to walk away, and even have a detrimental effect on your online reputation. Here is a list of what you should have ready for prospective buyers to look through.
Information Needed for a Successful Website Sale
- All personal information should be included and easy for buyers to find. Along with your name and contact information, you might want to also include any relevant social media profiles. This will help verify your reputation which is often a requirement for potential buyers.
- The details of the online business are also important and should include the date it was purchased and created, along with the URL and history of the website.
- All revenue data should be transparent and clearly displayed. Most online experts recommend listing all financial information for the past 6 months, and have the complete history ready if a buyer requests it. The financial report should include both gross and net monthly revenues.
- Any expenses for the website should also be clearly listed. This should include any advertising and content that was paid for, along with a complete listing of any real or virtual assistants. Cost of Goods Sold or COGS should also be included in your expense report. The expenses should go back 6 months, and you should also be prepared to submit older expense reports if requested by a potential buyer.
- You also want to include all information concerning traffic to your website and many buyers appreciate a screenshot of Google Analytics, which is an easy and comprehensive way to track any visitors within a requested period of time.
- If you use AdSense or any a similar platform to generate additional income on the website, this information should also be included in your spreadsheet.
- A complete listing of your inventory will also be necessary, and this information should not only be current but date back 6 months. Any expected orders should also be included, along with inventory that is getting ready to ship.
- Any legal issues, past or present, should also be included. Not only is this often required by law to complete the sale, but full disclosure is necessary if you want to keep your online reputation.
The most important information that you will include in your spreadsheet will concern the website’s finances.
While revenue should be included, buyers will be more interested in monthly and quarterly profits.
Any debt that may have been accumulated also needs to be included in the financial section of the report.
Know Your Numbers
Introducing yourself, the website and providing a brief financial summary will help attract interested buyers, but you also need to be familiar with your own numbers. Simply giving a general estimate on the value and cost of running the website is a good way to start a dialogue with a potential buyer, but you will also need to be able to give specific amounts. Some of the numbers you should have instant access to will include,
- The exact amount spent of inventory needed to keep the business operating smoothly.
- The exact total worth and inventory count.
- How much is spent on products versus amount taken in (or net sales revenue).
- The total overall cost of stocking and shipping a product, if applicable.
You will also want to know the exact number of employees on site or remotely located, along with the cost of any outside services you might use to keep your online business running smoothly. Payroll and cost of insurance are also important numbers to know, and can make the difference between making a sale that is profitable or losing money.
A quick tip to remember is that prospective buyers are only interested in exact amounts not in the potential of the website, which is one of the reasons why it is important to be able to respond promptly and accurately answer any financial question a buyer might have regarding your website.
Be Prepared to Verify All Information
While you will have most of the financial information included in your spreadsheet, there will be additional questions from prospective buyers.
A good tip to remember is if there are not any questions from an interested party there is a good chance that there will be problems with the sale. More questions indicate a higher buyer interest.
Your spreadsheet or report will generally only include information for the past 6 months, which is just enough data to give interested buyers a glimpse into your website’s performance. As their interest grows you will be required to provide additional data, and this often includes giving a buyer access to the website’s financial accounts.
To keep a buyer interested and appear professional it is a good idea to have all of your financial records close at hand.
This can include:
- Having passwords and access codes ready to supply so an interested buyer can verify your financial information themselves.
- Keeping complete financial records complied by your financial institution ready to email upon request. These records should go back to the start of the online business, or at least two to three years back.
- All business receipts neatly organized by date, including any recent ones that might not yet be listed in your financial records. This will also include any merchant sales and receipts, along with those from customers.
- Any and all expenses for the past 6 months neatly complied and arranged by date. You might also be questioned on some of the expenses, so it is a good idea to go back over the expense reports so you can familiarize yourself and be prepared to answer any questions in a professional and timely manner.
Tips to Keep Your Numbers Organized
- Your financial institution or service providers (i.e. accountant etc.) keeps complete records of all the activity on your accounts, and can be easily accessed and supplied to an interested third party. This ensures that the data is organized monthly, quarterly, and annually to make it easier for a buyer to get an accurate picture of the website’s finances.
- All tax information should also be included, and this is usually included in the records received from your financial institution and accountant.
- There are also private accounting firms that will organize your data for a nominal fee. This can be especially helpful if you have several financial accounts that need to be organized.
- Your web server might also include a statistics package, which is a great way to keep track of your website’s traffic. You can let an interested buyer access this information online, along with including it in your website’s portfolio.
Other Necessary Information
Your financial information will be the most important and requested data, but there are a few other details you will want to be able to verify quickly and easily. You will want to be able to verify your ownership of the domain, along with the date it was created. If your online business is currently in a contract with an advertiser or other vendors/service providers, this information should also be supplied in the financial package.
Keeping track of all of this data over several months and years can be exhausting and frustrating, but it is necessary if you want to make a smooth and successful sale.
When you have all of your numbers organized and easily accessible, you will find selling your website an easier and more pleasant experience than you thought. This will also help to enhance your professional online reputation, which can be extremely beneficial next time you are ready to put your online business up for sale.
Be Ready to Provide Support after the Sale
After introducing yourself and the website and providing every detail about the online business and its finances, you and the buyer have finally reached an agreement. The value of the website has been determined to your satisfaction, and now you are starting to look forward to having the extra time to sink into another project. Before you uncork the champagne and start celebrating the successful sale of your website, there are a few more details to handle which will make your life easier in the long run. These will include:
- Make sure you have a formal written contract that both parties have signed, and some business experts recommend using a lawyer if it is an exceptionally large sale.
- Coming to an agreement on how and when the funds will be transferred into your account. In most cases a third party closing company such as escrow.com is used to ensure payment of sale price upon completion of web property transfer in the buyer’s name.
- You will also want to make sure that you have a set period of time in which you will be available to provide support and occasional technical help to the new owner. The date you will be available till will generally be written into the contract.
There are several reasons why you should consider providing support after the sale, which includes making sure the new owner knows how to properly maintain and run your “baby”. This can also make it a little easier for you to finally say goodbye to the website you created and help grow so you can get on with new and exciting projects.
In the sales agreement there is usually a set period where the seller will be available to help provide technical support, and answer additional questions.
This can include helping to introduce the new owners to the employees, and making sure your customers know that they favorite online business will still be up to their high standards. Other smaller and easily forgotten details can also be taken care of during the transition which often includes listing these convenient web tools:
- Domain names
- Web hosting sites
- Mailing lists
- Paid directory listings and subscriptions
- Auto responders
These minor details are often forgotten about in the excitement of buying and selling a website, but are important tools that help keep it running smoothly and efficiently.
Congratulations on the Sale
Once the finer details of the contract have been agreed upon and the funds have been transferred into your account, it is time to sit back, relax, and enjoy the satisfying feeling you get from selling something you created.
There is a lot of hard work that is required to sell your website, even with help from an online auction site.
The sheer amount of data that is necessary to sell an online business can take almost as much time to compile and organize as it did to build and grow the website, and it is even more difficult if you are still spending large amounts of time keeping it running smoothly.
Even after you’ve put your website up for sale it is still important to keep it running and making a profit. Interested buyers will be carefully going over all of your financial data, and paying particularly close attention to your gross and net revenue and profits.
To keep from making a potentially costly mistake, many online business owners are turning to an online investment company.
Creative Innovation might be the perfect solution for busy website owners looking to sell at a fair price. Instead of spending days compiling the necessary documents, you only have to answer a few questions necessary for them to assess and evaluate your business. They do all the work creating a sufficient decision summary from your business details, saving you a ton of time and effort in pulling it together. Best of all you can receive an answer in 72 hours of you providing the required information. This means less time spent trying to sell, which generally results in a bigger profit for you.