We hope you enjoy reading the MEANit blog with all the guides and tips. If you want our team to help with your web presence click here

The articles here will give you everything you need to plan, design, develop, market and maintain your website, if you have the time required – Enjoy.

Selling an online business – How to it when buying or selling

Selling an online business –  When to sell or buy

selling online businessNot every business owner wants to keep their online venture once it has been established, so when is a good time to sell and when is a good time to buy a business. The struggle to create a business that is profitable takes its toll, so once you invest the time, you may feel like cashing in. There is no strict rule, but the valuation below will give you a good guide to attainable value, what you can expect to pay or receive. For buyers, the benefits of purchasing an existing business include the fact that the set up has been done, that the model has been proven to be profitable and that you will not have to invest the set up time, suffer the stress or wait for the initial growth. Traffic figures and conversion will show that there is a market and that visitors do buy. There is a lot to be said for buying an online business that is proven and where you can see the potential to increase sales per client or improve on existing margins. If you build your own online store, you can expect that your budget should be 20% to 33% for design & development and up to 80% for marketing. A beautiful looking online shop is of no use, if it does not have well converting traffic. Try to find a Niche and focus on that area, such as selling wild flower seeds that grow well in mediterranean climates.

Valuation for an online business

Valuation is usually about 20 to 40 times monthly turnover or 2 to 3 times annual net profit. This figure might be slightly more if a potential buyer has an associated business to allow them leverage off your venture. For example, if you have a store selling bikes and a buyer has a store selling hiking gear, there are synergies and the potential to sell many items to the one customer. The average value of a customer can be calculated or estimated and this might add a bit to the price. The main key differential that might add to the value of a business is where it is an established Subscription model, where the clients are signed up to weekly or monthly payments, that guarantees a steady income. This can double the valuation, so it is a major factor. Any prospective buyer will want to know how many hours a week you work on the business. The fewer the better for the valuation. If you work 40 hours a week to earn €100k a year then you have a full time job and not a business. If the business makes €100k a year net and you have to work 10 hours a week, then it is a business and is much more valuable when selling, maybe 3 times more valuable.

Brokers or selling agents for online business

Using a reputable broker can save you some heartache, as they know the steps. They can advise on doing due diligence and what legal steps are required etc. Fees vary from 2.5% to 10% for big stores to 15% for small stores, such as a €50k valuation. Most brokers are sales agents, so they are working for the seller rather than the buyer – but be aware that they only make money when they sell, so they will sell you on selling. This does mean that they are more concerned with the sellers interests, but at the same time they want to get transactions done, so they will sometimes try to get the price down to help you secure the business and allow them get their commission quickly. A good deal should be good for buyer and seller alike.
Brokers include:
Flippa online marketplace with loads of hucksters
Empire Flippers
http://www.digitalexits.com   Jock
http://feinternational.com/
http://websiteproperties.com/
https://www.websiteclosers.com/
http://ibbfl.com/
http://bizbroker24.com/
There are loads of brokers especially in the USA, so you will find loads of ideas, but be wary and go through the Checklist below.

Flogging a dead horse – what are the options

If you have a business that is not making money, you might consider selling just to offload it and allow you do something else. Or you might find someone who could take the business to the next level, so maybe consider offering equity in exchange for input. Perhaps you are a salesperson, but need a development team or the other way around, work together to build the product. Do not let your emotions decide for you, so if a business is simply not working, stop throwing time and money at it, swallow the bullet and move on. You could pivot by taking your cycle business and making it a cycle insurance site where you draw traffic because of the content and upsell Cycle Insurance as an Agent for a bigger company. Or sell accessories rather than cycles, maybe wet gear or covers, something easier to stock and ship.

Checklist when buying or selling an online business. Warning – Tips.

  1. Do not accept figures without seeing the proof or back up – Talk to your financial advisor
  2. Make sure that the margin is adequate
  3. Get control of the back end of the online store – have a competent developer look at it and do an audit
  4. Ensure that nobody else can access the back end, clear out other Super Administrators
  5. Talk to the product suppliers to see that you can work together and agree prices going forward
  6. Look at the freight costs to ensure they do not eat up your margin
  7. Check for a No Compete agreement, so that the seller does not set up in competition
  8. Study the marketplace, the competitors, the selling prices and the chances of sales increasing or decreasing based on normal market factors
  9. If you are buying a mailing list, check to see that the subscribers have in fact subscribed
  10. You will want all the code for the store and the ability to edit it
  11. Make sure the code is useable, not overly customised and that all plugins are all updated and work well
  12. Ensure that the theme or design is mobile responsive or can be made so
  13. Check what rates are being charged by your payment gateways
  14. Will Paypal freeze your account when you get started which can stall your Cash Flow
  15. Try to pay in agreed stages, perhaps 50% up front and the balance over 12 months, to ensure that the seller supports you, maybe even offer a bonus based on performance
  16. Write up a Digital Strategy before you buy and have a very definite plan about how to recoup your investment
  17. Ensure you get the rights to any trading name, domain name or brand name
  18. If there are existing clients or contracts, ensure they transfer over to or stay with you
  19. Get legal advice on the contract and to see that there is no litigation or debt outstanding
  20. If the previous owner had to work 80 hours a week to make a profit, do you have the spare time or resources to do the work. How will you add value to the business to help it grow.

Treat this like any business, just because it is “online” does not change the fundamentals, so do the checks, plan the future, provide for the resources required in time and finance etc. Discuss it with a trusted advisor or two and get input from professionals, NOT family or friends.

Conclusion: A good deal will be good for buyer and seller alike, so if you do not trust the other party, walk away. Try to do a deal where the seller stays involved for a period of time for a bonus consideration.

What is your website worth?

If your business is not eCommerce, what is your website worth?

Perhaps you have a website for your Legal Practice or Financial Advisory Services business, maybe a Construction firm or even a web design agency, any business that does not transact online much, if at all.

MeanIT Web Partners Donegal Customer Lifetime ValueHow do you put a value your website?
You invested time and resources in to it, when you planned, designed, developed and marketed it. Graphic Design, Development, SEO, Hosting etc. You built up its reputation every time you advertised or mentioned it online. On your livery, notepaper, invoices etc. Simply by renewing the hosting every year you added value. Every day of every year that your website was online, added value in the eyes of Google. In many cases this will have helped your ranking in Google SERPS search engine results pages. This higher ranking will add to your website valuation.

Is it on your balance sheet?
It should be. Talk to your accountant if it is not. As an Asset or a Liability? It would be very unlikely that the website would be a liability or carry a negative valuation. You would have to have done something terrible with your content to have your website retain no value. Although we have seen one or two such instances of this. Even a poor website has a value. Perhaps you have a website that attracts visitors because it ranks well in search, however these visitors do not convert to being customers. That is a problem, but it is one that can be resolved.

Having no visitors, no traffic, no conversions would be more of a sign that your website has little value to offer visitors at present. But once again with a bit of optimisation even a poor ranking, poor converting website can be improved, which would increase its value. Its history with Google alone will add some value.

In this day and age every business should show its website on its balance sheet. Some businesses rely  on their website to:
1. Bring in new potential client enquiries
2. Inform existing clients and therefore save time for you or your team.
3. Answer questions online or deliver guides and tips 24/7 to pre-qualify callers
4. Launch new products or services
5. Recruit staff, without having to pay recruitment fees

What figure should the value show on the balance sheet?

We covered the value in some ways, as in bringing in new clients, saving time, adding to your customers experience with you, but what would be a figure that everyone would agree is a fair monetary valuation. You can project the value of the benefits above. Then look at how many new clients you get a year from your website. What is the average order value? What is the LTV Life Time Value of a client.

Example:
MEANit Web Design Services Inc – Hypothetically, lets say we get 6 telephone or email enquiries a month and 4 found our details online, not necessarily on the website. People can find us without entering the website itself. And most will not use the Contact Form in the website, they just call you. Always ask where they got your contact information. If the answer is online, then attribute this to your web presence.

If we work on a conservative 50% conversion, then we get 2 new clients a month through the website. You should be aiming for 3 or 4 if the website has pre-qualified the caller. Lets say an average sale is €3000 for a first time client for a service in year 1. And in an average year we provide a further €2000 in ancillary services such as SEO or Digital Marketing advice. And most clients stay with us on average 10 years. That is €3000 plus €2000 as in €5000 for 10 years, so we get €50,000 in LTV. Usually clients grow so the annual fee will increase, by say 20%. This makes the LTV closer to €100,000.00 at a minimum. Plus a happy client will refer a few more over time, especially if you ask for referrals, which you should do.

Now we have 2 new clients a month or 24 a year with a life time value of €100,000.00 each as in €2,400,000.00. And say even 2 referrals in the 10 years. That gives us a further attributable value from the website of €200,000 by 48 new clients for another €200,000 or €4,800,000.00.  This is just for one year.

You might be saying this is too high, what is a ‘realistic value’ that a potential buyer would accept. Lets say we accept the figures above as being correct. But they seem really high. A buyer might say that you could estimate the income from one year at the €7,200,000.00, but the actual pre-tax profit after expenses is only 10%. Fair enough, so now you can value your website at just 10% or €720,000.00. Any questions? What is wrong with this logic? This will work for your Legal Practice or Accountancy Firm just the same way.

Our clients only spend about €2500 a year for our services, not €5000.
OK fair enough then that is 50% less and the website value is closer to €360,000.00. What value do you currently have it on your balance sheet?

Our clients only spend €1000 and it is a one off sale.
In that case at a minimum you are looking at 24 new clients by €1000 which is €24,000 in new business without any repeat or referal business, which does not really make business sense. Nevertheless, lets accept these low figures, and say your pre tax margin is still 10%. That makes your website worth €2,400.00 a year to you. Now what value will you attribute to it on your Balance Sheet.  Is it on your balance sheet at any value?
Note: Usually the only time a website appears in a balance sheet is as a cost when it is set up or for its annual hosting fee. This is so missing a critical asset in your business.

Can a website add value other than sales? Yes, absolutely.

Marketing platform – The big one is that you can use your website and overall web presence as the foundation for all your marketing efforts. By this I mean that you can add content to your website initially, then promote it via Linkedin, Facebook, Instagram, Press Releases, PPC Google Ads or Facebooks Ads, even Linkedin Ads. Use any marketing spend to bring people to your website, your land online. Here you can edit and update content, monitor and measure traffic and engage with visitors. Every addition of content or visitors will add more and more value.

Recruitment – And you can post job or career opportunities on your website and have people make contact with you after they see what you have to offer and read all about your firm on your website. Promote these positions online continually and get constant stream of CVs. Save a fortune in Recruitment fees and find the right people for your team. Use the website to sell your firm as a good option to the right potential candidates.

CSR Corporate Social Responsibility – How do you give back to the Community? Do you have a way of doing this? Does anyone know? Does your team know and work with you on this. Write about it on your website for clarity and get the team behind your efforts. You might get visitors who want to help you in your efforts. And if nothing else, you will be letting your clients know how you make a difference in the community you serve, with the profits you make from their custom.

Bottom Line – I hope you can see a higher value now to your website and overall web presence. If you are ever to sell your business, make sure there is an adequate value attached to the asset that is your website. Even if you are merging with another firm, establish the value of your website before agreeing terms. If your name is changing and the domain name as in www.meanit.ie is to be dropped you can still bring over the value to a new website. You just need a web design agency who know exactly what they are doing, in order to bring over any history and value.
All too often firms sell or merge without attributing adequate value to their website. The smart ones engage someone like us to independently assess a realistic value that is acceptable to both parties.
Plus having this asset valued on your balance sheet might help when it comes to looking for funding from banks or investors.

Do you want more traffic?

Hi, at MEANit we help 40 ‘Professional Services Businesses‘ to be effective online annually. Will your business be one of the 40 in 2022?

MEANit-Web-Design-Agency-Michael-MacGinty

Written by Michael MacGinty

Michael is a well known speaker, author and coach on how to use the web to grow a business. He is also WP Elevation certified as a Digital Business Consultant.
Blog Categories
Website Design
Search Engine Optimisation
Website Support Info
FAQs
Website Tips
Digital Marketing
News
Business Tips

Get ‘loved’ by

MEANit Web Design SEO Google Logo

Essentials Website

Get a clean, fast, mobile friendly, custom designed website that ticks all the boxes. By focusing on the essentials we can get you an online presence that makes a big positive impact on your business without investing a fortune initially. Build your brand and grow your audience with a Mobile-friendly, WordPress website typically 5 to 10 pages, along with all the training provided, so you can grow your site yourself over time, adding your own content and Search Engine Optimisation to get you found in Google search results over time

Best suited for:

Small firms, practices or businesses, who need a high quality custom design website without needing any large initial investment, but a platform that they can build upon over time.

Intended to get you online and give you a platform to start building your brand.

Includes simple Brief or Plan & Wireframe or Layout, Custom Graphic Design, Website Development of typically 5 to 10 pages, Initial SEO Search Engine Optimisation and Training.

From €4,800

Optional items include: Keyword Research, Keyword Mapping, Competitor Analysis, Monthly Support Plan and ongoing SEO services.

Custom Website

Let us get you noticed with a totally custom designed, fast loading website built to your specific needs. Then we can engage your target audience with unique page layouts perfect for feature content and focused landing pages. Training is provided with this custom designed WordPress website, typically 10 to 30 pages – this allows you to make all the changes you want.
And we can add in the critical Search Engine Optimisation, so your website ranks well in Google. Plus a full written plan for your team to follow..

Best suited for:

Medium-sized firms, practices or businesses who need a quality custom website and a marketing plan along with some ongoing help every month to generate the leads they want

Intended to make you more effective online and build upon your brand at a steady pace.

Includes Brief or Plan & Wireframe or Layout, Custom Graphic Design, Website Development of typically 10 to 20 pages, Initial SEO Search Engine Optimisation and Training.

From €6,000

Optional items include: Keyword Research, Keyword Mapping, Competitor Analysis, Monthly Support Plan and ongoing SEO services.

Strategic Website

You probably have an underperforming website, but realise you need a better web presence. One that will consistently generate the ideal pre-qualified leads and work you really want.
However, you do not have the team time to be doing all this digital marketing stuff. So you want some expert help.

Lets start with a meeting, then we can write up a digital strategy or plan, to ensure we set some agreed goals or targets for us to deliver for you.

Best suited for:

Growth focused medium sized firms or practices, who want to outsource all the website management and digital marketing responsibility to a competent, reliable Irish team, who will generate the new business.

This allows your whole team to focus on what you do best. Results Guaranteed by us!

Includes Brief or Plan & Wireframe or Layout, Keyword Mapping, Competitor Analysis, Custom Graphic Design, Website Development of typically 20 to 100 pages and Training, plus SEO Search Engine Optimisation.

From €9,500

Optional items include: Monthly Support Plan and ongoing SEO services.

A Web Presence Checklist, for the senior partner

12 things to oversee the web presence for your legal practice

LinkedIn including company profile page and personal profile for you and all employees. Post some articles about your services, giving some useful advice, sharing insights or sharing industry news. Connect with logical potentially good connections. No sales pitch, just hello with a short line to make the connection, like swopping a business card at a networking event. Read our Linkedin Guide.

Facebook – keep it a basic entry for the practice just to turn up in Facebook in search or get reviews. You could use it to get reviews from people who spend a lot of time on this platform. Or use Facebook to advertise your services, if it is right for your target market.

Website focusing on the services that you want to specialise in, the ones that make you the most margin and that you are happiest to deliver. Bear in mind that you can offer services that you do not personally have to deliver, but make you margin. You do not have to deliver you do not necessarily have to be involved in the process whatsoever. Who is responsible for your SEO Search Engine Optimisation? Read our Guide.

Include SSL – This is the little padlock that appears on the top left corner, to indicate the site is safe. This is not just for eCommerce websites.

Google Business Profile – Have you got one? Is your Google Business Profile profile populated, as in photos, service details, opening hours, blog items, reviews. Independent Google Reviews are fuel for your practice. Get as many as you can. Remember to reply to every single one of them. These are happy clients or people who are in need of attention. Read our Guide.

NAP – Include nap NAP everywhere that you write your address, search Google to see where you appear and ensure the NAP is exactly the same everywhere, including the Eircode.
Do any Google search of your name in an ‘Incognito window’ to see what people see on their computer when they do a search of your company. Whilst you’re there also do a search for solicitors in your town or area. Also do a search for the legal services that you want to promote in your area. Such as conveyancing in Dundalk or conveyancing solicitors in Dundalk.

Recruitment – Your website can also be used for finding new team members, rather than going through the expense of recruitment agencies. This tactic would generally be known as being a part of your overall content marketing strategy. This is where are you create content on your website that will attract people who are looking for certain things. Whether that be a specific legal service or a job in a legal practice that looks attractive to them.

Google Page Insights is a tool that is free and will give you an idea of the speed of your website. Google gives a lot of weight to a fast loading website, especially on a mobile view. Websites are being measured by Google more and more for their mobile view as a key metric.

Google analytics is also free and will give you an idea of the number of people travelling to your website visiting your website on a monthly basis. Use the overview to see how many people visit your website on a monthly basis to see if it’s going up or down. Google Analytics is a great tool but having a high numbers visit your website does not guarantee a conversion to a customer. In order to get conversions you continually need to add content and optimise content and compete with whoever your competitors are. A very simple search for a legal practice in your area will show you who is ranking number 1, 2 or 3. These are the competitors or people you’re competing with, so you need to be better than them. Read our Guide.

Google – With Google Ads you can spend a fortune easily. So if you want to use this platform, get to understand it or engage a specialist. It can be very useful in the short term or to use whilst you are working on your website and SEO. Read our Google Ads Guide.

Conversion. However, bear in mind even if you are number one and you get click through so people visit your website when they land on a page on your website. You have to work on the content in order to get them to convert from visitor to customer. This is your user experience as in UX through your User Interface referred to as the UI.

Reports – Ensure someone is producing a monthly report to measure the numbers. As Peter Drucker said “What gets measured gets managed — even when it’s pointless to measure and manage it, and even if it harms the purpose of the organisation to do so”. Ensure you get a Google Analytics report. And ideally have a report created, so that you can see the numbers at a glance.

Conclusion:
As a senior partner you do not need to do all of this work. This is not what you’re qualified to do and could be way below your paygrade. Unless you engage someone who can deliver a high return in the long term and needs to be well compensated in the short term. Get a proper Digital Marketing Plan drawn up.

However, somebody has to do the work. It would be good if you could use some of these tools to see if the person, practice manager or web agency is doing a good job with your investment.
The bottom line is the practice should be kept busy. And ideally be able to recruit enough staff to deliver services. As a senior partner if you allocate a half hour every month to review these basic reports, you will then be in a position to see what is being done on your behalf.

Read the monthly reports from your Digital marketer. And if needs be, have a conversation about what needs to be improved. The Digital marketer will need a budget to do the search engine optimisation or create graphics for the website. And possibly doing advertising on LinkedIn or Facebook or anywhere where your potential customers are hanging out. Without sounding like an ambulance chaser you can have your content found when people do a search for chiropractor or osteopath or bad back or medical negligence. Get ahead of the curve.

How much time, hassle and money would it save you to have any and all advertising done online through your own website by a competent specialist agency?
Also posted here.

You May Also Like…

Gratitude

Gratitude

Gratitude – Expressing thanks to friends, clients, suppliers and friends, to children, relations, neighbours and acquaintances, teachers, coaches, other parents,,,,

read more