When we hear reference to the word “sustainability” in business terms, it often refers to the company’s ability to manage its energy use, contain its carbon emissions and generally act as a good neighbor within society as a whole. We can unveil a whole new interpretation of the word, however, when it comes to the concept of buying an Internet business for sale. There are an increasing number of opportunities available to the entrepreneur these days as the Web becomes such a critical part of all of our lives. As more and more business is conducted via the Internet, expect to see an increasingly sophisticated array of Internet businesses available for purchase. Whenever business is conducted over the Web, it represents largely a “virtual” experience and it’s important to remember this. This is very different from the traditional business, also known as “bricks and mortar” and as such it can be difficult to value the business online.
Checkbook with Pen writing
This business sector is very dynamic and we do not have many points of reference or benchmarks to consider. When buying a gas station and convenience store for sale for example, there are a number of different accounting ratios and industry averages to help you consider your options, but when you are purchasing a website for sale, you may have to be rather creative when you’re trying to work out what value it has for you.
Take a cold, hard look before you buy a business such as this, and ask yourself exactly what it entails. Does it have a particular hold on any niche area; does it feature specific and more tangible products such as extensive content, for example? Are there loyal clients, and what methods of marketing are typically used to solicit them? The first thing you need to bear in mind is that such a business must have some kind of depth to it and there must be a clear path of progression in front of you. Continuity and sustainability are your buzzwords, as you conduct your due diligence process.
Very often, when you buy website business assets you will find that itâ€™s the brainchild of the seller and you must guard against the loss of continuity, perception and marketability if he or she is no longer involved. Be wary if the business revolves around the seller’s personality. Does he or she have some significant and specific skills that you simply could not do without? Consider the possibility of the seller working for you on a limited basis going forward, but do be careful here, as well. In such a situation, itâ€™s not so easy to come up with a non-compete agreement. Typically, with a “bricks and mortar” style of business, the geographical non-compete agreement may be relatively easy to enforce. However, on the Web it is all too easy to be “invisible” while still operating a successful business. In the worst-case scenario, the outgoing seller engages with a third-party operation somewhere else and sets up another operation, doing business that could be harmful to your fledgling operation.
Itâ€™s absolutely essential to engage the services of competent, legal counsel in this area to design a bulletproof agreement for you. Maybe you should allocate some of the purchase price into a specific area to motivate the outgoing seller to work with you. This will involve the creation of a legal “note,” which only allows a certain amount of the funds to be released when it is evident that the seller is working with you and not against you.
Richard Parker is the President and founder of the prestigious Diomo Corporation – The Business Buyer Resource Center. His celebrated materials, seminars and consulting have encouraged thousands of aspiring business buyers from around the World to pursue their dream to buy a business.If you enjoyed this post or found it useful, please consider my Caffine Level - I drink LOADS of Coffee!