Internet Business Acquisitions/Valuations Expert
Significant experience in all areas of selling and purchasing Internet-based businesses, including acquisition structuring, deal sourcing and due diligence.
I'm one of the original co-founders of Centurica - the leading agency dedicated to Internet-based asset due diligence, and a Business Advisor at Flippa.com - the world's largest marketplace for websites and Internet businesses.
My main area of expertise is acquisitions of Internet-based businesses in the range of $50,000 - $1,000,000 and the valuation of such businesses.
Being an industry veteran and someone who has experience both as an investor, a broker and a consultant, I often take on private consulting and coaching clients to either assist them with their one-off acquisitions or provide overall coaching and knowledge.
My clients range from private investors looking to acquire one or more web properties, to corporations that need expert advice to establish and optimise their overall acquisition strategy.
Fulfillment Services
Internet Business Acquisitions/Valuations Expert
If you're after just an overall idea, then most FBA businesses sell at around 2.5x - 3.5x SDE, with SDE standing for Seller's Discretionary Earnings or your Net Income + any discretionary or one-off expenses. There's much more to it, though, and a lot of metrics will end up impacting the actual valuation. Is it mostly a single-product business? Expect the valuation to take a hit. Have you been steadily growing both your top and bottom line each year? Expect it to increase. You may want to give https://thefbaguys.com/amazon-valuation-tool/ a go. Valuation tools are notoriously incorrect but this is a good exception in this regard ... as it's limited narrowly to just FBA businesses and can, therefore, take into account the metrics that apply to FBA businesses specifically. Also - when you talk to a GOOD broker, they won't deliver you a sales spiel or convince you to sell earlier than you should. Many (most) of them will, but there are still a few decent people left in the industry who are happy to suggest you what's in your actual best interest, not what makes them a quick commission.
Web Marketing
Internet Business Acquisitions/Valuations Expert
GoToWebinar all the way. It's a bit pricey (but not too much), but it's by far the best solution out there. The last thing you want to do is use a free/cheap but unreliable provider and have your webinar experience massive connectivity issues or drop half way through.
Investing
Internet Business Acquisitions/Valuations Expert
This is a question that requires far more than a simple 10-minute answer, as due diligence is an extremely complex subject and only having a few "quick tips" would put you in a very vulnerable position. Generally speaking though, the key areas that you would want to focus on (depending on the type of the web business that you're about to buy) are: * Financial verification - make sure to verify all income and expenditure, and never rely on screenshots or video proofs, as these are easily faked. Always require either live access to accounts/books or schedule a real-time screen sharing session with the seller. * Make sure to fully understand the business model and its sustainability. This is easier said than done but it's perhaps the most important aspect of DD. You need to be able to make sure that the business is an actual, viable and sustainable business, rather than a fly-by-night website. I've written about this in length here: http://bryanoneil.com/the-most-important-website-due-diligence-question-that-buyers-rarely-ask/ * Take a very thorough look through the site's analytics (preferably you should request live access to its Google Analytics account) and make sure everything is in order. Also take a thorough look through the site's traffic sources and ensure that they're sustainable. * Validate the claimed owner responsibilities so that you wouldn't end up buying a business that's actually a full time job. Sellers often misrepresent this part so it's important to perform a sanity check and ensure that the claimed hours match the reality. But as I said, there's far more to due diligence than that. I've published a fair number of articles about this in my blog (http://bryanoneil.com) that you would probably find useful, but I would still recommend you to either do a lot of reading up on the subject, or to speak to a professional. As for trustworthy brokers - I'm obviously a bit biased here as I run a brokerage myself (Deal Flow - http://dealflow.flippa.com/), but apart from us the other two larger brokers are Quiet Light Brokerage and FE International. I'd recommend you to steer clear from brokers who either have too many listings (as that's an indication of sub-par vetting standards and therefore low quality listings), or brokers that haven't established themselves in the industry, as those newer brokers are rarely experienced enough to be able to properly validate the businesses that they list, and are often desperate to complete deals, leading them to intentional misrepresentation. Hope this helps! Bryan
eCommerce
Internet Business Acquisitions/Valuations Expert
No need to re-invent the wheel, especially considering that there are (hundreds of) thousands of people in your exact situation. Check out a few of these: http://www.forbes.com/sites/allbusiness/2014/09/26/which-e-commerce-platform-is-the-best-choice-for-your-online-store/ http://www.quora.com/Which-ecommerce-platform-should-we-use http://www.cio.com/article/2449485/e-commerce/e-commerce-6-top-ecommerce-platforms-for-do-it-yourself-small-businesses.html There are many more. The short answer is that it depends. It depends on your tech skills, on whether you're happy with "out of the box" functionality or need anything custom, on what's your budget allocation, etc. etc. but the links above should give you a pretty good idea. Hope this helps. Bryan
Start-ups
Internet Business Acquisitions/Valuations Expert
If you need funding for your business one way or another then I don't see anything being wrong with having your client on board as an investor. Not only do they already know about your business, therefore saving you a fair bit of time and effort that you'd otherwise put into pitching your business to outside investors, they (likely) also have some first hand industry experience, which is probably going to be an asset for the business. Cheers, Bryan
Exit Strategies
Internet Business Acquisitions/Valuations Expert
Having been active in the industry of online acquisitions for half a decade I would strongly recommend you to consult with a broker who specialises in online properties, as bricks and mortar M&A firms typically don't have the necessary knowledge to provide you with an accurate valuation, or the contacts to find your business a qualified buyer when the time comes to sell it. You're welcome to speak to either my team (I run the brokerage division of Flippa.com called Deal Flow - http://dealflow.flippa.com), or other reputable brokers in the industry, such as Quiet Light Brokerage and FE International. Best, Bryan
Customer Acquisition
Internet Business Acquisitions/Valuations Expert
It's difficult to provide you any real advice without knowing anything about your service/product, or what a 'signup' means (is it a free version of your product, a signup to your mailing list or something else) but generally speaking it can be any of the following reasons: 1) People sign up to get something that they want, but don't need your product, or want to pay for it. 2) Your clients deem the free version to be sufficient and don't want to pay for the paid version. 3) People sign up due to curiosity but the value isn't there for them to purchase. 4) You haven't done a good enough job communicating your product's benefits to your signups. 5) You lack sufficient "calls to action" that would convert signups to paying customers. Again, this is a gross generaliation, as no-one will be able to give you any specific feedback without having more information about what you're selling. Hope this helps. Bryan
Growth
Internet Business Acquisitions/Valuations Expert
For Alpha / testing round - yes. For a Beta - absolutely not. If you get lucky and your app 'goes viral' then this is a good problem to have. Odds are that you will able to sort out any issues relatively quickly, whereas artificially limiting growth would potentially result in losing out on a lot. As Reid Hoffman famously put it - "If you are not embarrassed by the first version of your product, you've launched too late."
Google AdWords
Internet Business Acquisitions/Valuations Expert
As others have mentioned, if the competitor is bidding on your client's brand name then it may fall under Google's trademark policy and you can file a complaint with Google. If they're bidding on generic keywords however then the only thing to do is ensure that your quality score is as high as possible, which will reduce your ad cost and push you above your competitor whilst costing you less per click. Most of the copycats that I've come across aren't very good when it comes to campaign optimization, meaning that most of the times it's fairly easy to achieve a much higher quality score than they'll ever see. Make sure that your ad copy matches your keywords, that your ad copy + keywords match the content on your site, that you're linking people to pages that have good content (as opposed to "naked" landing pages), and you'll outrank your competitors shortly.
Startups
Internet Business Acquisitions/Valuations Expert
A gentleman called Dan Norris has blogged about his failed startup (Inform.ly) extensively, as well as published a Kindle book called "The 7-Day Startup" which talks about this and the lessons that he learnt extensively. I'd recommend you to google him and check out his book, as you're spot on that the net is full of success stories but not many are brave enough to discuss their failures.
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