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Article Check - Success in Selling your Web Hosting Company
Would you ever think that a video site on the internet could affect elections? Yeah that’s right, YouTube – the most popular video sharing service — played a role in this year’s election and believe it or not, had a helping hand in removing the republicans from office.Now if YouTube can help shift things politically, imagine what it can do for you and the image of your venture.What if you were to actually start filming what you were doing with your business on a daily basis? You could wake up in the morning and start your business as usual and throughout the day you can make a few video entries of what you are doing and why.I think that would rock. Just imagine being able to watch other young entrepreneurs in action and having them share what they are doing to grow their business – that sort of information would be
Other thoughts:
• Would you be willing to sell parts of the company or just the whole?
• Do you want to stay on with the buyer or leave after closing? And why?
• It is more attractive to buyers if there is someone at your company who can run the show upon your post closing departure.
• Stock vs. cash for consideration? There are way too many variables regarding stock to be covered here. However, keep in mind you may prefer $900,000 in cash and $300,000 in stock, as opposed to just $1,000,000 in cash. If treated correctly, stock deals can be beneficial in many ways.
THE PROCESS
The initial communication with a prospective buyer: In the first or second communication, the seller should de
You see him from across the room. You know him, but you can’t remember how you know him. Now you have a problem: you want to break the ice but your uncertainty is holding you back. Uh oh, he’s heading in your direction. What do you do?!If you’ve ever been in this situation before, you know how uncomfortable it can get – especially if you really should know who the person is. What’s more, it’s not uncommon to evade those whom you cannot remember for the fear of embarrassment.But your uncertainty shouldn’t generate a “Please Don’t Let This Person Talk To Me” attitude. That would hinder your approachability. People forget people everyday. But with the right attitude, questioning, conversational direction and communication tools, the following techniques will help you pinpoint who you’re talking to without risking tot
TO SELL OR NOT
There are a number of reasons to sell. For most business owners their wealth is tied up in the business. People sell their companies or even divisions when they want to move on with life, want to focus on another venture, or they believe the market value is high for what they have.
Businesses are not liquid A share of Exxon stock can be sold in 5 seconds, while many businesses are not even sellable. Any interest expressed by a company in the acquisition mode is worth listening to. The only time owners are 100% ready to sell is when the business is in decline and rest assured, they don’t like the valuation when that occurs. I know too many people who regret not selling when they had the opportunity and actually wanted to, but were too tough on price.
Companies seeking growth through acquisitions will almost always find something to buy. Whether it’s your company they acquire or not, it’s sometimes actually up to you. Many times sellers do their best to run buyers off, and don’t even realize it. Buyers will acquire a company they believe is a good strategic fit. You can’t control this aspect. However, with organized, timely, honest and decisive communication sellers can create a much more appealing deal.
Seller communication
• It’s ok to tell someone, “Yes, I would entertain offers for my company.” This simply implies that it would be a good use of their time and money to explore your company further. It’s not a sign of desperation.
• Playing “hard to get” usually informs the buyer the opposite.
• Be realistic with yourself regarding price. Potential buyers can be lost forever to unrealistic expectations of “home run” offers.
• Bottom line … buyers will not beg you to sell your company. There are simply too many other companies out there which are for sale.
BEING ORGANIZED
Business plans and business sales books There should not be a significant difference between a business plan used for internal management, raising money and planning, and a business sales book used to sell a business. Both of these documents should be 90% complete at all times. They give a wonderful first impression to a buyer. Never forget the buyer is the one with the cash and who is taking most of the risk. He is looking for any reason at all to walk away from the deal. Being organized and having the ability to give the buyer information in a timely manner is the MOST IMPORTANT and easiest thing you can do to increase the chance of selling your company for the highest price. Ideally, every time the buyer asks for information, it should be delivered in a timely manner, in electronic form, accurate and up to date. Try to refrain from providing 1990’s dreamy type pro-formas. They’re not in vogue anymore. One final point; buyers do realize that the last piece of due diligence information received is usually what the seller doesn’t want anyone to focus on.
Preparing the company for sale: Run your business like you plan to keep it for the long term. When sellers attempt to prepare their company for sale, many times they avoid making needed investments in the company. If you invest cash into a project that has yet to pay off, then get credit for it in the valuation.
Other thoughts:
• Would you be willing to sell parts of the company or just the whole?
• Do you want to stay on with the buyer or leave after closing? And why?
• It is more attractive to buyers if there is someone at your company who can run the show upon your post closing departure.
• Stock vs. cash for consideration? There are way too many variables regarding stock to be covered here. However, keep in mind you may prefer $900,000 in cash and $300,000 in stock, as opposed to just $1,000,000 in cash. If treated correctly, stock deals can be beneficial in many ways.
THE PROCESS
The initial communication with a prospective buyer: In the first or second communication, the seller should det
One key discipline of successful direct marketing has been to test marketing communications tactics to continually improve results. There is now an alarming trend according to a recent survey that we conducted among business-to-business marketers who are readers of Sales Lead Report.Only 24% of the marketing professionals surveyed said they usually or always test their marketing communications tactics before rolling them out.The survey was completed by 280 of 940 subscribers who received and read a special edition of the enewsletter Sales Lead Report.When asked if they test marketing communications tactics before rolling them out:Less than 5% (4.5%) said they always test;Less than 20% (19.5%) said they usually test;27% reported they occasionally test;Nearly 34%
Companies seeking growth through acquisitions will almost always find something to buy. Whether it’s your company they acquire or not, it’s sometimes actually up to you. Many times sellers do their best to run buyers off, and don’t even realize it. Buyers will acquire a company they believe is a good strategic fit. You can’t control this aspect. However, with organized, timely, honest and decisive communication sellers can create a much more appealing deal.
Seller communication
• It’s ok to tell someone, “Yes, I would entertain offers for my company.” This simply implies that it would be a good use of their time and money to explore your company further. It’s not a sign of desperation.
• Playing “hard to get” usually informs the buyer the opposite.
• Be realistic with yourself regarding price. Potential buyers can be lost forever to unrealistic expectations of “home run” offers.
• Bottom line … buyers will not beg you to sell your company. There are simply too many other companies out there which are for sale.
BEING ORGANIZED
Business plans and business sales books There should not be a significant difference between a business plan used for internal management, raising money and planning, and a business sales book used to sell a business. Both of these documents should be 90% complete at all times. They give a wonderful first impression to a buyer. Never forget the buyer is the one with the cash and who is taking most of the risk. He is looking for any reason at all to walk away from the deal. Being organized and having the ability to give the buyer information in a timely manner is the MOST IMPORTANT and easiest thing you can do to increase the chance of selling your company for the highest price. Ideally, every time the buyer asks for information, it should be delivered in a timely manner, in electronic form, accurate and up to date. Try to refrain from providing 1990’s dreamy type pro-formas. They’re not in vogue anymore. One final point; buyers do realize that the last piece of due diligence information received is usually what the seller doesn’t want anyone to focus on.
Preparing the company for sale: Run your business like you plan to keep it for the long term. When sellers attempt to prepare their company for sale, many times they avoid making needed investments in the company. If you invest cash into a project that has yet to pay off, then get credit for it in the valuation.
Other thoughts:
• Would you be willing to sell parts of the company or just the whole?
• Do you want to stay on with the buyer or leave after closing? And why?
• It is more attractive to buyers if there is someone at your company who can run the show upon your post closing departure.
• Stock vs. cash for consideration? There are way too many variables regarding stock to be covered here. However, keep in mind you may prefer $900,000 in cash and $300,000 in stock, as opposed to just $1,000,000 in cash. If treated correctly, stock deals can be beneficial in many ways.
THE PROCESS
The initial communication with a prospective buyer: In the first or second communication, the seller should de
South Africa holds the world’s largest reserves of gold (35%), platinum group metals (55.7%), manganese ore (80%) chrome ore (68.3%) titanium metals (21%). It also produces a large share of the world’s diamonds and mineral deposits.Lucrative opportunities exist for downstream processing and value adding of iron, carbon steel, stainless steel, aluminium, platinum group metals and gold.Beneficiation of minerals before export is a major growth area. The Department of Minerals and Energy has embarked on a small-scale mining programme aimed at encouraging and facilitating the development of economically viable small-scale mining and mineral-based industries, in line with the government's desire that small miners gain access to mineral rights suited to small mining activity.Relationships between individual mining companie
• Be realistic with yourself regarding price. Potential buyers can be lost forever to unrealistic expectations of “home run” offers.
• Bottom line … buyers will not beg you to sell your company. There are simply too many other companies out there which are for sale.
BEING ORGANIZED
Business plans and business sales books There should not be a significant difference between a business plan used for internal management, raising money and planning, and a business sales book used to sell a business. Both of these documents should be 90% complete at all times. They give a wonderful first impression to a buyer. Never forget the buyer is the one with the cash and who is taking most of the risk. He is looking for any reason at all to walk away from the deal. Being organized and having the ability to give the buyer information in a timely manner is the MOST IMPORTANT and easiest thing you can do to increase the chance of selling your company for the highest price. Ideally, every time the buyer asks for information, it should be delivered in a timely manner, in electronic form, accurate and up to date. Try to refrain from providing 1990’s dreamy type pro-formas. They’re not in vogue anymore. One final point; buyers do realize that the last piece of due diligence information received is usually what the seller doesn’t want anyone to focus on.
Preparing the company for sale: Run your business like you plan to keep it for the long term. When sellers attempt to prepare their company for sale, many times they avoid making needed investments in the company. If you invest cash into a project that has yet to pay off, then get credit for it in the valuation.
Other thoughts:
• Would you be willing to sell parts of the company or just the whole?
• Do you want to stay on with the buyer or leave after closing? And why?
• It is more attractive to buyers if there is someone at your company who can run the show upon your post closing departure.
• Stock vs. cash for consideration? There are way too many variables regarding stock to be covered here. However, keep in mind you may prefer $900,000 in cash and $300,000 in stock, as opposed to just $1,000,000 in cash. If treated correctly, stock deals can be beneficial in many ways.
THE PROCESS
The initial communication with a prospective buyer: In the first or second communication, the seller should de
Use your time for problems that are truly important.Hard as it may be to walk away once you’re aware of it, just because a problem is there doesn’t mean you have to solve it. Ask yourself and your colleagues, “What will happen if we don’t solve this problem?” If the answer is, “not much,” then turn your attention to something more important. If you don’t know what will happen, find out before you undertake a problem-solving project. It should be clear to you and everyone else involved that the problem is worth the effort—and expense—to fix it.Quantify the cost of the problem quickly, but as realistically as you can. Include lost opportunity costs as well as real expenses such as staff time to deal with the problem, travel expenses, etc. Use actual costs where you can; estimate where you can’t. Then guesstimate what
Preparing the company for sale: Run your business like you plan to keep it for the long term. When sellers attempt to prepare their company for sale, many times they avoid making needed investments in the company. If you invest cash into a project that has yet to pay off, then get credit for it in the valuation.
Other thoughts:
• Would you be willing to sell parts of the company or just the whole?
• Do you want to stay on with the buyer or leave after closing? And why?
• It is more attractive to buyers if there is someone at your company who can run the show upon your post closing departure.
• Stock vs. cash for consideration? There are way too many variables regarding stock to be covered here. However, keep in mind you may prefer $900,000 in cash and $300,000 in stock, as opposed to just $1,000,000 in cash. If treated correctly, stock deals can be beneficial in many ways.
THE PROCESS
The initial communication with a prospective buyer: In the first or second communication, the seller should de
It has always been a mystery to me why certain chief executive officers do such a poor job hiring key executives for their management teams.A lot of folks would agree with the idea that a company's performance (or lack thereof) starts at the top with its key officers and trickles down through managers at different levels to the professional (or less professional) staff members.Harry Truman became more famous as America's 33rd President when he popularized such phrases as "The buck stops here" and "If you can't stand the heat, get out of the kitchen." Truman understood a thing or two about taking responsibility for the performance of an organization (or a business).Truman, a Midwest boy born and bred in Missouri, was a folksy, unassuming president who was forced out of his re-election campaign in
Other thoughts:
• Would you be willing to sell parts of the company or just the whole?
• Do you want to stay on with the buyer or leave after closing? And why?
• It is more attractive to buyers if there is someone at your company who can run the show upon your post closing departure.
• Stock vs. cash for consideration? There are way too many variables regarding stock to be covered here. However, keep in mind you may prefer $900,000 in cash and $300,000 in stock, as opposed to just $1,000,000 in cash. If treated correctly, stock deals can be beneficial in many ways.
THE PROCESS
The initial communication with a prospective buyer: In the first or second communication, the seller should determine who the buyer is, what they are looking for, and basically how they value it. Don’t pin the buyer down for exact valuations initially, because he doesn’t know what you have. Every business is a little different. There is no harm in telling a prospective buyer what you have in regards to number of sites, domain names, servers, employees, etc … after all it’s not your customer list. Inquire about their business and don’t forget many times the small fish eats the big fish.
Selecting an attorney: Find an attorney who has industry specific experience in mergers and acquisitions and understands the appropriate tax implications. Ask them how many deals they have done in the industry, how much they charge, etc. Please, don’t use your brother in law who is a great divorce attorney. Deals get stalled and even cancelled because an inexperienced attorney delays the process. There is a fine line between being thorough, and taking so much time with documents the buyer walks from your deal and seeks another company to acquire.
THE DOCUMENTS
The letter of intent should be short and sweet. The purpose is not to map out every single issue, rather to come to a gentlemen’s agreement on the very basic aspects of the proposed deal … without spending too much time or money. The basics which should be covered are stock vs. asset purchase/merger, valuation, consideration, assets included or not, timelines, etc. If everyone agrees to the letter of intent then each party, at their own expense, should start working on the purchase and sale and other closing items. If both parties cannot agree on a 1-3 page letter of intent within a week they typically will never make it through the entire process.
The purchase and sale agreement will spell out every aspect of the deal. If both parties agree on the letter of intent, then they should work on the purchase and sale while all of the other aspects of the due diligence process and pre-closing issues are being handled. Most of these events can and should occur simultaneously. Don’t forget, some variables are more important to the seller, while others are more important to the buyer.
Every once in a while there is a real “tough guy” on one side of the table or the other. This guy just has to have every variable to go his way or there’s “no deal!”. These guys kill mutually beneficial deals all the time and rarely accomplish anything. Hire “tough guys” for the collections department.
On a final note, always be honest and fair. This world is becoming smaller every day.
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