Do You Have an Exit Strategy for Selling your Internet Business?
Often times when starting or acquiring a website business, owners overlook the importance of an exit strategy. What is an exit strategy? It is a plan for when an owner may want to sell a business. Selling the business is usually not on most people’s minds when they are just getting started, but it should be. Besides the obvious which is to grow the business to make it profitable for the current owner and to increase its monetary value for future sale, there are a few housekeeping items that should be done upfront and along the way prior to selling. Considering and taking care of these items will not only make the process smoother when it comes time to sell but will be crucial to getting the most value for the company.
Think over the details that should be in place now to make it easy for a buyer to review the business details and to ultimately transfer the business later. The most important item to consider is the function of bookkeeping. It is amazing how many businesses today are still run out of a shoebox of receipts. This has especially been the case with sole proprietors whose personal finances are mixed with those of the business. In addition, many business owners operate several businesses and combine transactions making it difficult to separate out any single business for evaluation.
By starting early on with an accounting software program and keeping separate books for each internet business, the owner can always get a current and clear picture of the financial operations of the business and distinguish profitability by the company which is important to making future decisions. Not only is the accurate bookkeeping necessary for the operations of the business to the current owner, but it will be necessary to provide to any potential buyer. Providing a buyer with income statements is the first step in creating confidence in the business and it allows him/her to quickly assess its financial position. Of course, these financials must be substantiated later during the process of due diligence, but do not underestimate the importance of this first impression. Nothing slows down a sale process more than messy books and it can give the appearance of an unorganized business. It is well worth the investment in the software, many of which are very simple to use.
Keep track of the website’s stats. By monitoring and recording information on monthly traffic and organic keyword positioning, owners can watch trends and make adjustment in strategy accordingly. This will also allow them to have these historical data easily available to provide a buyer who will want to evaluate this aspect of the website business for sale beyond the financials.
Grow the client database and email list. Many e-commerce businesses offer a free newsletter or product discount coupon to entice visitors to sign up by sharing their email address or other contact data. These lists have value beyond increasing customers which may bring in greater sales in the short term. Focusing on capturing email addresses to expand the company email list provides a new future owner with an audience to instantly market to after acquisition.
Keep track of any industry recognition or trade press that the business has received. By keeping this information together and organized, it can be readily available to be included with the promotion of the internet business to a potential buyer.
It’s never too early to think about an exit strategy for selling a website business. Paying attention to these few items at the beginning and throughout the operation of the business will go a long way toward making the process of selling the online business smoother when it is time to make that decision.
Finance and Administration
Website Properties, LLC.