Posted by Adriana on February 27th, 2010
Posted in: How To
Guest post by Mark Daoust
I was talking to a person today who was asking about my work as an internet business broker. He was wondering what sort of timelines I see in preparing a good website for sale and how quickly it takes for me to sell it. My response to him is the same response I give to every potential client that asks me how long they should expect it will take to sell their business: it depends entirely on the quality of the internet business. Some website businesses sit on the market for a long time while others are snatched up remarkably quickly.
What is the difference between the sites that have to find ‘that right buyer’ and those sites that buyers will trip over to get a chance to buy? It usually isn’t the price point (we’ve had offers on 7 figure businesses within a few days of listing them).
If you were to start an internet business today, what would be the best way to build that internet business to fetch the most money possible in the shortest amount of time?
Here are four principles that you would ideally follow if you were to build an Internet Business today with the intent to eventually sell it as quickly as possible for the best price possible.
Keep Detailed and Clean Financial Records
The biggest mistake people make when selling their Internet business is that they do not have a clean, easy to read, understand, and verify financial history. If you are looking to sell any business for more than $30,000, having a clean financial history is paramount. A clean financial history will inspire confidence (and reduce the invitation for closer scrutiny), put you ahead of other sites looking to sell, and give buyers quick and easy methods to place a value on your business.
Here are a few key things to do to keep your records clean:
Use Quickbooks! If you don’t know how to use Quickbooks, learn. If you don’t like Quickbooks, figure out another common accounting program that will be able to generate profit and loss statements for you.
If you absolutely hate doing accounting, then hire a book keeper. If you are building a business to sell, this isn’t ideal, though, as you will want to keep your expenses as low as possible to show a higher cash flow.
Incorporate the business as its own entity. It can be a huge mess to try and separate the revenues and expenses for two or more businesses. Don’t have your businesses share the same bank account – separate for the sake of clarity.
File very honest taxes. This may be the most difficult thing for a business owner to do. Don’t take expenses on that you don’t need to. Yes, you’ll probably pay more in taxes, but if you can produce tax returns to verify your financials, buyers will go crazy for it. Plus, if a buyer needs to get an SBA loan (only available at this time on acquisitions below $200,000), those tax returns will be used by the lending bank.
Don’t mix personal expenses with business expenses. Most business owners do it – those meals with the wife or friends where ‘business’ happens to come up in passing, but 100% of the bill is charged to the business. Most buyers will understand, but if you can avoid doing this it will make verifying your financials quick, easy, and painless.
If I were to offer just one piece of advice to any Internet business owner, this is the bit of advice I would give. Keep your finances clean, easy to read, up to date, and easily verifiable. Buyers will thank you (they rarely see well organized financials).
Keep It Automated
I have a great job I would like to offer you. The salary is $100,000 per year. All I need from you is to have you pay me $300,000 and work 60 hours per week for the next 3 years. After that, you may get a bonus check. Do you want to take it?
(Hint: you are supposed to say no. If you did say yes, call me – really…). Most buyers won’t take this either.
Buyer’s are not interested in buying a job. They want a business, which means you have to build a business. When you can automate part of your business, automate it. Outsource the boring stuff, outsource the specialized stuff, and focus on bringing your total hours as low as possible.
I’m personally not a fan of Tim Ferris’s “Four Hour Work Week Book” (although Tim Ferris is a fantastic author, business person, and thinker), but his principles are ideal for building a business that would sell well. Implement those principles and understand this: the more you are crucial to the day to day operations of your business, the less appealing your business will be to potential buyers.
The ideal business for sale will have buyers imagining themselves walking in on day one and earning money without having to hurdle a significant learning curve or spend 60 hours per week just trying to keep up with the business model.
Jump Some Hurdles and Build Stability
Get familiar with the phrase “low barriers to entry” and learn to avoid business models that are associated with that phrase. A key question many buyers ask when looking at buying an Internet business is “what’s to prevent someone else from starting up the same thing and being just as successful”? Many website business buyers are not technical in nature and feel as if they are a bit behind the Internet curve. This is why they are looking to buy an established Internet business – it takes some of the guess work out of having a successful online business.
Make your business difficult to copy and emulate. In a competitive field this may require having a unique blend of vendors, a core set of keywords that you rank well for, and a blend of partners that drive traffic to your site. Alternatively this may be finding a nice niche without a lot of competition that you can quickly dominate. Even if there is nothing to prevent someone from entering your market, being able to point to a loyal customer base is something that cannot be replicated in a few months.
While assuring that you have entered a market that has some challenges to enter into, be sure to build some stability. If you rely on vendors or suppliers to supply products, don’t rely too heavily on just one vendor. Similarly, if you receive most of your web traffic from a handful of well placed organic ranking keywords, figure out how you can stabilize your market. Always ask yourself what you would do if one key component of your business disappeared tomorrow. Don’t rely on any one person, company, or vendor to be loyal to you or your company.
Know When to Sell
This may be the most difficult thing for an Internet business owner to determine. The fastest selling businesses are growing businesses. However, when you are growing, it is difficult to imagine giving up something that is fun and exciting. Here are a few key tips to keep in mind:
Not all businesses grow forever. Entrepreneurs especially have a tendency to get their businesses to a certain point, and then find that they are unable to bring it to the ‘next level’. Know your limits and skillset and sell before you hit your limit.
It’s fun when its growing, it’s not fun when its shrinking. The reason so many Internet business owners miss out on the best time to sell is that they are having too much fun. When times get rough, however, and their businesses are no longer putting charge in their day (and similarly are no longer putting green in their bank accounts), they think it is a good time to sell. Ask yourself why someone else would find your business fun when you no longer find it fun? Chances are, not as many people will be interested.
Don’t max out your value. Buyers love to see a clear path for continued growth. Few Internet business buyers are in this business to hold a steady asset. This is a high risk, high reward type of acquisition which usually attracts those who want to see big dividends for their investments. Don’t exhaust all the growth potential of your business and paint a clear picture for a new owner so they can see just how easily they can grow what you started.
Does it Make Business Sense?
Building the ideal business to sell involves making a lot of decisions that may not make the best business sense. As always, you need to weigh the potential benefits of selling your business against what is good for your business today. I personally wouldn’t recommend following all of these principles to the letter, but rather follow the spirit of these principles as they can apply best to your individual Internet business.
Buyers are constantly seeking quality online businesses to buy. If you can carry some of these traits, and carry them better than other, similar businesses for sale, you’ll have buyers tripping over themselves to make you a quick, cash offer.
Designed for professionals to network with other professionals, LinkedIn isn’t like other social networking sites. It’s ideal for finding service based companies to work with and if you’re a service company, it’s a great place to be represented. Like many social networking sites, users can invite, create and join groups and search for like minded individuals. However, LinkedIn offers much more.
LinkedIn allows business owners to:
• Receive Recommendations – Other business owners can boost your profile by recommending you and your business.
• Create Groups – Like Facebook, you can create a group for your target audience to join. This gives you the ability to connect with and market directly to them.
• Utilize Applications – LinkedIn offers applications like Blog Link, Polls, and Reading Lists to help you enhance your profile and connect with others.
• Advertise your business on LinkedIn for more awareness, traffic and exposure.
LinkedIn is a fantastic opportunity to build your professional network. Along with Facebook and Twitter, and any other social networking tools you choose to use, promoting and growing your business just got easier.
Facebook is a rapidly growing and boasts 175 million users with about five million new users a week. This makes it a ripe opportunity to boost your business. And when it comes to Facebook, while you cannot create a customized profile page like Twitter, you can create fan pages, send mass messages to your fans and join groups.
The first step to promote your business with Facebook is to create a business profile. Facebook offers you the ability to separate your personal and professional social networking activities and offers a number of settings, which you can adjust to meet your needs. To set your privacy settings, visit http://www.facebook.com/privacy/
Next, just like Twitter, you’ll be connecting with people and also like Twitter, you can import your email list and connect with those people first. You can also search for friends using the Friend Finder feature and Facebook also suggests friends based on people you’ve connected with, items in your profile and groups you’ve joined.
And make the necessary changes. For example, you may only want friends to view photos and videos tagged with you in them.
The next step, which again will feel similar to Twitter, and most other social networking tools is to begin interacting and promoting your business with the tips and strategies we’ve already mentioned. Upload videos, announce promotions, share links to interesting and relevant sites, share your experiences and get involved.
What is unique to Facebook are the applications, fan pages and groups.
Promoting with Facebook Applications
Facebook offers a number of applications including creating and joining groups. Adding and joining groups is another way to connect with a very specific target audience. If, for example, you are a dog trainer and your market are new dog owners, you could create a group for puppy owners and share helpful tips, links and information with them. The group function allows you to also see the groups your friends and associates are participating in so you can make the decision about whether or not it’s a group you too want to participate in.
There are a large number of applications and with Facebook continually growing new applications will be added every day. A few great applications to consider include:
• Twitter – Allows you to publish your Twitter posts on Facebook.
• BlogNetwork – This application is a great way to publicize your blog and gain new followers.
• Advertising – Facebook allows you to advertise on their site and to also sell ad space on your profile/fan pages.
• Facebook Pages – A Facebook Page is a public profile that makes it possible for you to essentially create a business profile page right on the site. You can share products, sell ad space and market to your audience. You can also invite people to become a “Fan” (through PPC ads). Each fan is now someone you can market to directly by sending them messages, promotions, information, downloads and so on – much like you would an opt-in list.
• Mobile Facebook – allows you to use Facebook from your mobile phone. Great for sending on the fly messages but also good to remember that many people use this feature on their mobile phone and you can market to them specifically.
Facebook is an active, thriving and growing community and it’s not just for teenagers anymore. In fact, middle-aged men and women are one of the largest growing communities online and they’re a lucrative audience.
Your first step to use Twitter effectively to promote your business is to register and create an appropriate profile. That will include potentially creating a custom Twitter background and learning about all of the tools, applications and gadgets you can use to optimize Twitter as a marketing tool.
Creating Your Twitter Background
Because your Twitter Profile is something that will help brand and differentiate you, it’s important to spend some time making it represent you and your company. Twitter offers templates you can customize, you can utilize secondary software to create your Twitter background, and you can outsource the task to a graphic designer. Many graphic designers who specialize in web content are now offering custom Twitter backgrounds.
Custom Twitter backgrounds give you the power to present a strong first impression. It sets you apart from your competition, gives people a good idea of who you are and what you’re about and if you provide links to your website(s) it’ll send you traffic.
Once your profile has been created, it’s time to find your audience. Rest assured once you begin posting relevant, valuable and beneficial information and are interacting with Twitter users, you will get more followers. However, in the beginning, you may want to connect with key influencers. How do you find these key influencers? Search!
Finding Friends and Followers – Twitter Search
Once your profile has been created, it’s time to find friends and followers, people to connect with. Twitter search is a great way to get started, however you can also download your email contacts and search for friends that way.
The Twitter search tools provide essentially two ways to find information and potential followers.
Basic Search – Is a keyword driven tool. Enter your keywords, click the search icon and your results show up on the left hand side. Take a look at the various people posting frequently on this topic to determine if they’re a key influencer. For example, if you own a crafting website, you may want to follow Martha Stewart on Twitter because her followers are most certainly interested in crafting too.
Advanced Twitter Search – Click the Advanced Twitter search button at the bottom of the page where you can search by multiple words, person, or hashtag #. (The # is a tool to create groups, which people can search by. Using the crafting example from earlier, you could post something about crafting and then end it with the #crafting hashtag.)
Interacting on Twitter and Promoting Your Business
Your next step is to begin interacting with your fellow Twitterers. Twitter asks one question, “What are you doing?” The trick is to make it relevant to your business and interesting and you have 140 characters to get it done.
Your tweets or posts are designed to accomplish two things, promote your business and connect with users. Sometimes you can accomplish both however other times you’ll want to focus on just connecting or just promoting. Yesterday, we mentioned several ways you can promote your business using social networking. We mentioned posting attention grabbing headlines and linking to your site, we also mentioned announcing promotions. You can even give away free content on Twitter. Here are a few tools to help you use Twitter to promote your business.
• Twitter Groups gives you the ability to join and create groups to motivate a following. It’s a great tool for creating sub-niches within your audience.
• Social Too is a site that automates following those who follow you. It also filters spammers and has a survey function. Additionally, you can automate a custom message to thank all those who follow you along with a link to your website or a giveaway.
• Magpie is an advertising tool, which helps identify key influencers for your product or service, and then use them to spread the word about what it is you have to offer. You create your own ad campaign with your choice of message and keywords.
• Twitter mobile. There are also a large number of widgets and plug-ins, which make Twitter accessible from just about anywhere including your Blackberry, iPhone, Gmail, post them on your blog for cross promotion and so on. You can find a number of these applications by clicking on the apps button at the bottom of each page.
Twitter can also be linked to Facebook so all of your Tweets show up as Facebook posts, thus helping you optimize your efforts.
Posted by Adriana on February 8th, 2010
Posted in: How To
Video is popular and getting more so this year, and I hear many asking how to include video in their blogs.
Let’s add the Google’s Love Story Super bowl Ad here, since it’s fresh on everyone’s mind:
Now let’s see how I did that. On the right side of the screen, when you are on the video page, you’ll see this little wheel looking button, as seen below:
Click on that button, and the space below it will an expand with more options. Make sure you unclick the related videos if you don’t want more videos to pop at the end of the video. Also, if you’d like to add a border around the video, you can pick any of the color combinations you see there. You can also choose the size of the video.
Once you are done, it’s time to copy the code and paste it into your blog. Click anywhere on the field next to “Embed”, and it will be highlighted.
Then, click CTRL to copy the code, and go to your HTML view on the dashboard:
Point to where you’d like the video to show, and paste the code. You are done. And it was really easy, wasn’t it? If you still have questions, feel free to leave a comment below.
