Ensuring the Smooth Transfer of Your Online Business by Website Properties
Transferring your website business is one of the most important aspects when it comes to having a successful exit. Simply put, if your website business is not in a position to be easily migrated to a new owner, you can’t sell it. While this might not sound like you and your website business, the fact of the matter is that it’s surprisingly common for entrepreneurs that focus on the day-to-day growth of their website business, but ultimately ignore the logistics of their exit until they absolutely have to.
As a leading online business broker and expert website broker, we wanted to share that it is essential for every owner to always have an exit plan and to treat their business as one where an exit is inevitable. Not only does this create a culture in which organization rules the day, it saves a lot of potentially costly headaches when it comes time to transfer the website business.
When it comes to transferring ownership of online businesses, things can happen fast. Once deal terms are agreed upon and the process begins in earnest, businesses can change hands in a few short days (for the uber-organized even hours). Still, the speed at which this can happen means that there is a potential for time-consuming and costly mistakes if you are not organized and if expectations haven’t been communicated and agreed upon between buyer and seller.
Here are a few things that you should do to ensure the process goes smoothly:
Nail Down Your Timelines
Generalizations are the enemy of a speedy and efficient transfer. When there are tasks that need to be achieved (domain transfer, password delivery, inventory transfer, etc) it’s essential that timelines are set for both the buyer and the seller. This is especially important when it comes to any sort of training process where the seller educates the buyer on the nuts-and-bolts of the business for a period after the sale. It’s not uncommon for a portion of the sale price to be withheld until this is complete, so it’s important to delineate a timeline. How much training is involved and on what subjects, down to how many hours you are willing to spend on the transition, and how long the buyer has a claim to your time. A seller that doesn’t set clear boundaries on these risks an otherwise successful sale descending into an unpleasant and drawn-out experience.
Define Which Assets Are Tied To What Funds
When website businesses change hands, it’s not uncommon for funds to go into an escrow account, where a third party can manage their release based on certain benchmarks of the transition. This is where a business broker becomes invaluable because they can act as an impartial third-party, one that’s only interested in both the buyer and seller being satisfied with the process and the results of a successful sale of the website business. Also, they have the benefit of handling hundreds, if not thousands of transactions, so it’s likely that they can anticipate potential issues unique to the transfer of not only an online business, but your specific business, whatever it may be (SaaS, AdSense, FBA, etc.).
To minimize – or eliminate- the chance of disputes that could end up keeping funds tied up and tempers flaring, create a detailed asset transfer list that specifies what needs to change hands, when it’s expected to change hands, and any/all funds that will be released as they are.
Create A Training Manual/Process Documentation
We have often discussed this as a foundation part of running a successful business and having a cohesive exit strategy. For many business owners that haven’t created these documents as they grew their business, going back and trying to reverse engineer them can be a time-consuming and costly pain. Training manuals and process documents are one of the few things that not only help your business while you own it, they help you long after the sale. Not only does their existence potentially raise the value or appeal of your business when it comes time to sell, it can speed up the transition and reduce potentially tedious back-and-forth with the new owner once they’ve taken over.
Delete Any/All Personal Information From Accounts
This may sound like a no-brainer, but entrepreneurs are deeply and personally tied to their businesses, and often those two elements can blend. This means that before transferring control of your business you should go through any and all associated accounts (financial, social, software, etc.) and ensure that personal and private information has been thoroughly scrubbed. Even changing any passwords before you hand them over to a new owner is a good policy, since as a general rule, most people tend to stick to a select few combinations or password elements across accounts both personal and professional.
Ultimately, the building blocks for the smooth transfer of a website, business begins in the early days, where an entrepreneur can most easily create the organizational structure and processes that allow the business to run effectively and efficiently in their absence. As mentioned above, many elements that go towards a smooth transfer are ones that benefit the daily operation of the business up until the point of sale. For most entrepreneurs, though the eventual sale of their website business and the success of it will come down to the payday they achieve at the exit, the icing on the cake will certainly be the smooth, efficient and amicable transfer to the individual that will take your former company into the future.
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