Frequently Asked Questions?
Your have questions? We have answers! Below are some general questions & answers about our company, the website sales process and our industry. Look them over to see if they answer your questions and if not, feel free to contact us at anytime.
How long have you been a business broker?
Website Properties was founded by David Fairley who has been successfully assisting clients to sell their internet business since 2002.
What is your firm’s experience with the sale of Internet Businesses?
At Website Properties, we specialize in the sale of internet businesses. Unlike conventional business brokers who primarily handle brick and mortar businesses with a small amount of internet based companies mixed in with their traditional services, at Website Properties it is all that we do. We only represent internet properties and have sold over 300 website businesses and domain names with a combined value of $55M. That single minded focus and experience means your online business will receive the expertise and attention it deserves.
Our brokerage team are internet entrepreneurs with a combined 50 years of online experience. We have a deep and intimate knowledge of this business niche. This means, we understand the fundamentals that determine values of these businesses very well and negotiate from a position of strength and wisdom.
Can you describe your company’s services?
Our brokerage service encompasses the entire spectrum of the online business sales process. We take care of all of the details starting with gaining an understanding of your business and your goals, reviewing your company details to establish its market value, effectively marketing your business, fielding all inquiries, qualifying potential buyers, negotiating offers and assisting with the close. For more details regarding our services, please visit our Sales Process Page.
How does your company maintain the confidentiality of my business for sale?
When we post your listing ad to our website and other Business For Sale portals, we provide a description of your business, but do not disclose your company name. All prospects that wish to review more information are required to have a signed Non-Disclosure Agreement (NDA) on file before the prospectus, which includes your company details and URL, is released. This Confidentiality Agreement is a legally binding contract requiring the signer to keep the information provided confidential. While not a 100% guarantee, it offers a legal standing and having this in place is a strong determent against such actions.
Do you provide a business valuation, do you charge a fee and how long does it take to complete?
The brokers in our office are happy to assess your business and provide a valuation based on the details you submit to us FREE of charge. In order for us to properly and accurately evaluate your business, we need a number of details including business model, financial history and other business fundamentals. Once we have that information, we will correspond with you regarding any recasting and to clarify any items. Although it is common in our industry for business brokers to offer valuations within 24 hours, we believe our clients and their businesses deserve the time of a detailed review process before important decisions such as the value of your company can be made. Once we have the data needed to fully review your business, we work hard to provide you with a valuation as quickly as possible while giving you our complete attention.
What information do you require to evaluate an internet business?
We request preliminary details about your business model and niche, Profit & Loss statements (P&L), historical stats, traffic, customer database, growth rate, etc… in order to complete the valuation.
For your P&L’s, we request the following:
- Monthly Statements per time period:
- Past three complete years. Unless your business reports based on a different Fiscal Year, the typical period will be a calendar year covering Jan 1 – Dec 31.
- Current Trailing 12 Month (TTM). This period includes 12 months ending with the last complete month’s data.
- In Excel format so that we can work with the figures.
- Any notes regarding owner compensation, personal expenses or costs unrelated to the business for sale that were included in the financials.
Providing the details in this format allows us to be able to work with the figures while preparing the valuation as well as prepare for presentation later to buyers in a format with which they are familiar.
How are the Profit &Loss Statements reviewed and presented?
Our goal is to create an EBITDA Net Income less Owner Compensation and Owner Discretionary/Personal items. After reviewing the initial P&L’s submitted, we will often ask a series of questions to get further clarification and to recast /remove owner compensation or personal items if applicable. We will send the final P&L’s to the Seller to review and approve. Once approved, the monthly Profit and Loss Statements will be included in the prospectus for review by buyers.
How do you determine the value of a business?
The listing price is usually determined by calculating a multiple of the Recasted EBITDA Net Income for the Trailing 12 Month period. The multiple used in the calculation varies depending upon a number of factors such as: overall health of the business for sale (growth, flat, decline), average monthly traffic, customer base, current multiples for recently sold internet businesses, current marketplace trends for the business industry/niche, etc…
Do you have an upfront fee to list a business for sale?
There are no upfront fees for listing a website business for sale with our firm. All fees charged are based on a percentage of the sale price and are only due when your business is sold.
Do you prequalify potential buyers?
Yes. Prior to releasing your company details, we require a Non-Disclosure Agreement (NDA) on file for all prospective internet business buyers. Prior to engaging our sellers in phone conference calls or negations, we require buyers to provide detailed business background and we perform a preliminary proof of funds check. Finally prior to receiving a Letter of Intent (LOI), we require a written Proof of Funds letter from the buyer’s financial institution and we perform a background check.
What are your advertising/marketing methods for an Internet Business for Sale?
Our team of Brokers and Client Services Staff work together to provide our clients with the most effective marketing strategies. Some of steps we take to present your business and reach the right buyer include:
- Preparing a professional prospectus brochure to present your company details.
- Advertising your listing on the Websites For Sale page of our website. We aggressively use PPC campaigns in Google, Yahoo and Bing to drive targeted buyers to our website.
- Emailing our private database of opt-in subscribers. Our list of includes about 12,000 qualified buyers actively seeking internet businesses.
- Contacting buyers from each Brokers’ private rolodex of contacts whose acquisition criteria or current industry may match your business.
- In cooperation with the Seller, reaching out to companies in similar industries that may be a perfect fit for the website for sale. Advertising in 4-5 extremely active business opportunity portals in the internet business sections.
How long does it take to sell an Online Business?
The average time from posting your listing to completing a sale close is about 3-4 months. Of course, a lot depends on the attractiveness of the business opportunity as well as the price and flexibility of the seller.
Do you recommend using an escrow company for closing?
Yes, we highly recommend using an Escrow service whether through a traditional Escrow company, buyer’s lender or one party’s attorney to facilitate the transaction closing terms. Having an escrow agent handle the transfer and release of funds as well as certain assets of a Purchase Agreement is the best way to protect both parties.
Do you accept all listings?
No. It is our mission to represent only quality internet business opportunities and also want to feel confident that both our business and the Seller are a good fit for each other. We consider items such as business model, financial history, customer database size, traffic stats and other business fundamentals. After carefully evaluating each website business to determine the health and future viability of the business as well as the Seller’s business acumen, we’ll make a determination about officially proceeding to market.
Do you work with other business brokers/agents on business listings?
Occasionally, yes. We have relationships with other brokers. Our goal is to service our client, so if we have a well-qualified buyer through another broker who makes a sound offer that is accepted by the Seller, we are happy to complete the sale and share the fee.
How long is the term of the listing?
The typical length of the listing term is six months. This amount of time gives us the best opportunity for success by allowing all of our marketing efforts time to attract and reach the right buyer for each specific online business.
What happens if the Seller finds a potential buyer while under agreement, is there a discount in the commission rate?
We ask for an exclusive because any buyer that approaches our clients directly or through their own efforts should go through our process: reviewing the prospectus we have created, being further screened and pre-qualified, handled through negotiations. The more buyers that are interested, the better; helps to maximize the selling price. If the seller indicates a potential suitor engaged prior to our agreement, we request he/she let us know prior to signing our broker agreement and we can discuss some options.
What happens to potential buyers when the listing agreement expires?
If the website or domain name is sold within a six month period after the listing term expires to any person to whom the listing was introduced during the listing period, the sale is subject to the Broker Fee.
Can you notify me about your new listings?
Yes, we would be happy to let you know when new listings are posted to our website. Typically, we will email our own buyer list about our new listings prior to advertising them anywhere else so that our buyers get the first look at each new website for sale. If you would like to receive announcements on new listings, please email us with your contact information.
How do I request information about a listing?
From our Homepage, click on the “Buying” Tab or Icon and then “Websites For Sale” or “Domain Names” tab. Beneath the listing ad for the listing in which you are interested, click on Button “More Details”. From this listing detail page, you can complete the short inquiry form on the right of the listing. You will be sent a Non-Disclosure document to sign and submit in order to receive the prospectus. If you already have an NDA on file, you will receive a confirmation email. Once you submit that back, you will be sent the prospectus automatically within about 15 minutes from then.
What is the process for getting more information about a listing?
We initially post a short ad for each of our listings on our website as well as the other Business For sale sites to which we advertise our website for sale offerings. Those ads do not include the name of the company but simply offer a brief description that allow a prospective buyer to determine if he/she has any initial interest.
All prospects that wish to review more details are required to have a signed Non-Disclosure Agreement (NDA) on file before the company details are released. This Confidentiality Agreement is a legally binding contract requiring the signer to keep the information provided confidential.
Once a prospective buyer submits an NDA, he/she will be sent the company detail in the form of a prospectus. After reviewing the prospectus, buyers with further interest can submit more specific questions to the broker handling the listing. After coordinating with the Seller, we get back to each inquirer with answers and will usually create a Q&A Supplement with all the cumulated Buyer Q’s and Seller A’s to share along with the prospectus.
Why am I required to sign a Non-Disclosure (NDA)/Confidentiality Agreement?
As a legally binding contract, this document helps protect the Seller from the public disclosure of his/her company details by requiring the signer to keep the information provided confidential.
What is included in the Prospectus?
The prospectus provides the basic information on each internet business which generally includes an in-depth overview of the company along with its search positioning, traffic stats and income statements. This is the first place to start when assessing a website business for sale after submitting a confidentiality agreement.
Do you audit the seller’s financials?
We carefully review the available Profit and Loss statements along with various other details provided by each seller amongst our internal office staff and with the seller directly. After clarifying any questions and finalizing all of the data based on our experience in this industry and through a series of discussions with the seller, we present what we believe to be a fair representation of the Company’s activities.
The P&L’s are generally provided as Cash Basis, EBITDA and Net Owner’s Compensation. The financials are not audited nor guaranteed. The buyer is responsible for performing his/her own due diligence to verify all of the information to his/her satisfaction prior to signing a Purchase Agreement.
What is the likelihood of obtaining an SBA Loan or Seller Financing?
It depends on the business and/or the Seller. In many cases, online businesses do not qualify for SBA Loans as they do not generally meet the very stringent rules in which to qualify for an SBA Loan. With regard to owner financing, many times an owner will provide financing to facilitate the sale of their business if they are confident with the buyer’s ability to re-pay the loan. Most sellers who are willing to offer financing will usually offer a maximum of 25-30% of the sale price in financing. This varies on a case by case basis.
What is the process of submitting an offer?
If after reviewing and perhaps further discussing the company details with the Broker and/or Seller the buyer is interested in acquiring the website business, he/she would submit to the Broker a written offer in the form of a Letter of Intent (LOI). The Broker will discuss any offers with the Seller. If the Seller accepts the offer, he/she will co-sign the LOI. The Broker will introduce the parties to connect directly to begin the due diligence process.
What is the process of Due Diligence?
Once an offer has been submitted by a Buyer and accepted by the Seller, the Broker will connect the parties providing each’s direct contact information that they may begin due diligence. At this stage, the buyer will submit a list of due diligence (DD) items he/she wishes to review to substantiate the data that was initially presented. Generally this consists of third party documentation such as Merchant Statements, Bank Statements and Tax Returns when available. The buyer may also review other items such as sales data, product lists, inventory, customer lists, suppliers/vendors agreements, and website analytics. The process takes place for an agreed upon period of time after an offer is accepted by the Seller. Once complete, if the buyer was able to substantiate the data presented to be true and correct, the parties would move to the next step of the transaction which is to create and sign a Purchase Agreement.
Do you offer a referral or affiliate program?
Yes, we offer a referral payment to the referring party for any seller and/or buyer that close their first transaction with Website Properties. Please contact us and we will be happy to discuss our referral program with you.
Can you assist with my specific acquisition criteria?
Yes, please contact us and let us know the type of internet business that you are seeking to purchase along with any other details of your acquisition criteria and we would be happy to assist.
Is your firm registered with your State Department?
We are a registered and licensed in Washington State.