How To

How To

Building an Internet Business with the Goal to Sell It

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.

==>> Mark Daoust is the owner of Quiet Light Brokerage, an Internet Business Brokerage firm.

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How To

What Is a Blacklist and How to Avoid Being Blacklisted

You may have heard the term “blacklist” and wondered what this meant. If you’re blacklisted it means you’ve been labeled as a Spammer by the internet service providers and the penalties can be stiff.

Now you’re scratching your head and thinking, “well I don’t send unsolicited emails or bulk email messages so I’m safe, right?”

Not really. There’s still more to worry about. There are actually several types of blacklists or reasons for blacklisting. It’s important to understand the difference.

Spam Blacklists are lists of mail servers or open relays known to be used by spammers to deliver unwanted email. An open relay is an SMTP server configured so that anyone on the internet can send email through it, including Spammers.

IP Blacklist blocks specific IP addresses, message senders or message recipients as determined in the blacklists. They can be temporary or permanent.

Email Blacklists include known mail servers and addresses used by spammers. With these lists in place, access to the server can be denied and unwanted email messages are discarded. Additionally your legitimate emails may also be blocked.

DNS Blacklists are usually maintained by anti-spam organizations. They include a list of IP addresses that send unsolicited emails.

Staying Off the Blacklists

To stay off the blacklists there are a few things you can do:

– The most obvious is to not send unsolicited emails or bulk e-mails – don’t SPAM.

– You’ll also want to make sure your server is correctly configured and secure, and not an open relay mail server. This is why it’s important to make sure your website is being hosted by a legitimate provider who doesn’t host to Spammers because if you’re sharing a server, then you can be labeled as SPAM too because you’re coming from the same server. My preferred host is MomWebs

– You’ll also want to make sure your subject lines and email body doesn’t trigger SPAM filters. Occasionally run your content through a SPAM checker site to make sure you’re not triggering any filters.

– And check to make sure you’re not already blacklisted: it can happen quite unintentionally. You can check if you’re listed by visiting:

– http://www.mxtoolbox.com/blacklists.aspx
– http://www.dnsstuff.com/

If you are blacklisted, de-listing isn’t easy but it’s necessary if you want to use email marketing to build and grow your business. The first step is to find out why you were listed and who listed you. Each agency has their own delisting procedure. Follow it, get back in their good graces and then follow the suggestions above to stay off the blacklists.

Getting blacklisted isn’t the end of the world but it can put a huge kink in your email marketing strategy. Best advice: stay off the blacklists by making sure everyone who receives an email from you wants it, don’t SPAM, and make sure your mail server is secure. You can also recommend whitelisting you to people who request email messages from you. This will help ensure they receive your email messages on time.

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How To, Work at Home

How to Write a Marketing Plan

Starting your own business is an exciting but also very stressful endeavor. In order to ensure the success of your business, you are going to want to conduct a lot of research and do a lot of preparation. An important aspect of your research and preparatory work includes creating an effective marketing plan because behind every successful product or service you will find a well-crafted marketing plan. If you have recently created your own business or are thinking of doing so in the near future, you’ll find useful information concerning the process of writing a marketing plan.

A marketing plan is a written manuscript that specifies what the necessary actions are in order to realize one or more marketing goals. Marketing plans can be crafted for a product, a service, a brand, or a product line and the objectives that they cover typically span between one and five years. In order to have an effective marketing plan, however, you also need to have a well thought out business plan and marketing strategy, which both serve as the foundation for the marketing plan. The business plan details your business’s financial and operational goals and policies and the marketing strategy is the overall direction a business plans to take in the hopes of focusing its finite resources on the best available opportunities so as to boost sales and gain a competitive advantage.

One of the key components of a marketing plan is the mission statement. In it, you are going to want to write a few sentences stating who your chief market is, what it is that you are selling (contribution), and what your unique selling proposition is (distinction).

There are several topics that a marketing plan should address. These topics include:

– market analysis details, sales advertising

– public relations campaigns

– as well both traditional and new media programs and strategies.

In order to conduct a thorough market analysis, you are going to want to collect and organize as much data as you can about the current market that will be purchasing and using your products or services. When doing this, some important aspects to consider include paying attention to market dynamics and patterns like seasonality, assessing the offerings of your competition, and keeping in mind who your targeted market is and what their demographics are.

A marketing plan should also offer descriptions of both your products and services and your competition. You want to detail how your products and services relate to the needs of the market and how they rise above what the marketing is currently offering. As far as your competition goes, you are going to want to detail what makes your product or service distinct and stand apart from your competitors.

Additional components to include in a marketing plan are product pricing details, where your product is going to be positioned in the market, and what your monthly budget is going to be.

After detailing all of the aforementioned information, you should be able to create quantifiable marketing goals for your business whose effectiveness should be closely monitored and revised as needed.

There are so many facets to evaluate and take into consideration when starting your own business, but if you take the time to first create a well thought out marketing plan, then you will be providing yourself with a great guide to keep you on the path towards success.

Seth Godin’s Permission Marketing : Turning Strangers Into Friends And Friends Into Customers is a great resource for those in the planning stages of their business.

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How To

How to Create and Upload a Simple Twitter Background

my twitter background

Today I decided to update my Twitter background and logged my steps so I can share.

I used Photoshop Elements to create my background, but you can use another program you have and/or like better.

1. First, I had to decide what size to create my background. I did a little bit of research on the web, and learned that most internet searchers use a resolution equal or greater than 1024×768, so i used that as my guide.

2. I created a new image with those dimensions, and made it look like the background of my site, which is a light gray checkered image. Here is what my images looked like at this point:

light gray checkered background image

3. Next, I created another image sized at 550×125 pixels where I added the URL of my site. I used the same blue background my website header has, and white letters, since I want my Twitter background to have the same theme as my site. I needed to try several sizes for this step, and eventually came up with the above sizes (some were too wide, some were too long, etc.).

Here is this image:

blue background

4. My next step was to add this smaller image to my initial image. I selected the image, copied and pasted it into my first image. I then had to rotate it 90 degrees to the left, so that instead of horizontal, my image now was vertical. I dragged the image to the left of the original image, and here is how my final twitter background image looks:

twitter

5. Next, I needed to upload my new twitter background image to Twitter: Click on the “Settings” link at the top of your twitter page.

twitter settings

6. Then, click on the “Design” link:

twitter design

7. Scroll all the way down, and you’ll see this:

twitter change

To upload your image, click on the “Change background image”, and you’ll see this:

twitter browse

8. Click on Browse, locate your image, and then click on “Save Changes”

You are all done with your twitter background. But you still need to change the look of your links, so that the colors match. Here is how you do that: Go back to step 7, but instead of clicking on “Change background image” click on “Change design colors”, and you’ll see this:

Change design colors

Click on each one of those squares, and modify the color, so that it matches your background image and/or your site. For example, I used yellow for my sidebar and red for my sidebar border, so that it ties in with the newsletter sign up on my blog.

Wasn’t that easy? Let me know if you have any questions.

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