Buying or Selling a Website? Caveat Emptor...

• Frequently, people start a site as a hobby and don't keep accurate records of income and expense. And those that do keep records, rarely if ever have audited statements.
• Many business owners offline or online spend all of their time running the business and very little keeping records and updating written material.
• Many online business owners operate several businesses at a time focusing on different aspects of a similar product or service
• Other owners "intellectual capital" (specific knowledge of a business) cannot easily be transferred and is unlikely to be written down in a procedure manual
  
  
  
  The Right Approach To Due Diligence
  Remember, analyzing financial statements will give you a picture of the past and little else. It's probably more important to see if records were accurately kept, reviewed by an accountant and are provided in traditional formats (balance sheet, income statements, P&L). As mentioned above, this is also your opportunity to review individual expenses and their effectiveness. Were recent marketing campaigns successful? Were these seasonal or one-time events, or is marketing an ongoing expense? Do the employees have contracts, or they simply 'at will'?. What about customers, competition, systems, suppliers, and legal and corporate issues? Use the Due diligence period to know exactly what you are getting into, what needs fixing (and their associated costs) and make a detailed analysis of your ability to perform all or most of the tasks required to operate the business.
  
  How Long Do You REALLY Need?
  All sellers and brokers want the shortest Due Diligence period possible. If they insist on a period that will compromise your ability to perform proper checks, run away. Unless you have intimate knowledge of a particular business and how it functions online, you must have ample time to delve into great detail. Prevent buyer's remorse and request 30 days. Negotiate from there.
  
  Preparation At a minimum, here is a list of what you should request for all businesses (the meat). Certainly different types of sites will have unique components that should also be scrutinized like copyrights, patents, advertising relationships, etc. For most sites, however, this list is a great starting point.
  
  
  
  Should You Hire An Accountant To Help You? Absolutely and without question you should use an accountant for this exercise. Even if you are an expert in this area, get an accountant to run the numbers and verify all of the financial activity. There is so much more that has to be investigated that your time is best spent on these areas and hire a professional to help with the financials.
  Getting the Seller and Staff to Cooperate There are times when a seller does not want to reveal that he/she is selling the business to the employees. At this time of change, employees are more likely to be worried about their own well-being than they would be about your due dilligence requirements or transition. Because many times in the online world, dilligence is done remotely, based on what the seller provides, it's very simple to tell the employees that the company is being audited as an ongoing requirement of a growing business (which is nothing but the truth).
  
  What If You Find Surprises? This should probably be titled: "What to do "WHEN" you find surprises" because you will. If you don't, you haven't looked hard enough. Deal with each on it's own and make sure that you thoroughly investigate each so that your facts are bulletproof. However, don't get bogged down with minor issues and you are best to take these as "part of the package". Unless you find something that cannot be resolved or is so detrimental that even if the seller lowered the price by 50% you would still have to walk away you are best to take all of these obstacles in stride. Don't publicize them; investigate them. A few issues doesn't mean that the business is bad. You must weigh them impact against the future viability of the business. Remember your goal is to learn what it is you will be getting into and what the future can be with you in charge. The option always exists for you to renegotiate once your investigation is completed. You will be in a much stronger position if you can go to the seller with very specific concerns, which require reevaluation and renegotiation. With this in mind, do not discuss your findings with anyone except your accountant or other advisors. Not the seller, not your broker, not the employees...nobody. It is not their business! you discover on Ready Websites For Sale. Whether you are searching for an established and developed website that is already profitable, or looking for a great start up website opportunity, you can peruse our internet based businesses for sale below to find a website you would love to own. There are hundreds of profitable websites to buy in a myriad of different niches. You can buy retail ecommerce websites, business to business internet websites, start up websites with products that are dropshipped for you. And pure passive income websites which provide unique content and earn advertising revenues. Check out the featured website listing below to find your opportunity.