Steps When You Purchase an Existing Website
The search for a website to purchase almost always starts with a visit to a web site like the one we host at VotanWeb. Sometimes the prospective buyer has a very definite idea of the type of website wanted. But, often the website buyer is a first time buyer and is still in the formative or exploratory phase of the search. Many first time buyers wonder what kind of website is best for them to purchase. That's a tough question to answer without some idea of the buyer's resources, skills and needs.
To determine the best website for you it will necessary for you to ask yourself a series of questions: "How many days per week do I want to work?", "Do I want to have employees?", "How much am I comfortable spending on a website?" and many other questions. Open and honest answers will allow you to quickly narrow your search and save you much time and aggravation. Our web site buyer registration offers a questionnaire that is a great way to narrow your search. It will help you find the website of your dreams.
After you reflect on your true interests and focus your search, you should begin to review the non-confidential summaries listed on VotanWeb. Our non-confidential summaries show a description of the business, a summary of financial performance, various metrics to allow an independent analysis of the opportunity, and the asking price. We recommend that at this point you focus on the business and not on its financial performance or price. It's far more important now to find a business type you would enjoy owning.
After reviewing the non-confidential summaries you may find that you selected one or more websites that you want to know more about. To take your search to the next level will require a greater level of trust and commitment between you and the Seller of the website you are interested in. To truly understand the value of a website will require you to receive detailed and specific information about each website of interest to you. Your agreement to keep this information confidential is required. Before you receive confidential information, we require you to send us your Buyer Profile and we require you to sign a Non-Disclosure and Confidentiality Agreement. When you return these documents to us, we will provide you with the domain name of the website you're interested in. You obtain a copy of these documents by selecting the “Download Non Disclosure” button and then printing the documents.
One of the primary objectives of VotanWeb is to provide website owners with a professional a confidential forum where they can offer their websites to the public. This means that we will provide the buyer with information and assistance before connecting the buyer with the Seller. This allows the website owner to focus on operating their online business.
The most important element in this process is the Opportunity Profile. This report on the website you're interested in is provided to give you the information you need to decide whether or not the website is the right opportunity for you. A typical Opportunity Profile contains a description of the website, a summary of the financial data, and additional facts including the number of employees and much more. After a thorough review of the Opportunity Profile you will have a good understanding of the business and its operations.
After reading the Opportunity Profile and reviewing financial data on the business you're interested in, you should be prepared for direct communication with the website owner. You should make certain that all your questions are answered by the website owner prior to your making an offer. This is an important step. You can learn much more about the website from the person who knows the most about it.
After all your questions have been answered by the website owner, the next step is to make an offer for the website. Making an offer is not a final step. In fact, it should be viewed as the first of several steps, each of which bring the Buyer and Seller closer to completing the transaction.
Although the buyer has already reviewed the summary of all financial data and discussed these at length with the website owner, the Buyer is obligated to make an offer before seeing the websites internal financial records. Privately held businesses do not publicize their internal financial information. The Buyer must understand that the purchase offer is ALWAYS contingent upon the Seller proving his or her representations. Due diligence is costly and time-consuming, and it must be done only after an agreement on price and terms is reached.
It's the website Seller's responsibility to prove everything to the Buyer. Put another way, your agreement on price and terms will be "non-binding" until you've had the opportunity to see all financial records and we have removed all contingencies.
Your offer to purchase will consist of price, contingencies, conditions and earnest money.
Price – How much you will pay and how you will pay it.
Contingencies - Approval of books and records as well as any other items that the Buyer requests to be incorporated into the structure of the agreement.
You and your advisors - attorney, accountant and others - will have a specified period of time to complete your due diligence and remove the contingencies (typically 10 days). When due diligence is complete and the contingencies are removed, the contract is binding. Should the business fail to pass due diligence, you are free to rescind or amend your Offer To Purchase.
After escrow receives the signed instructions, the escrow officer will transfer the website and disburse the money.
Congratulations! You own a piece of virtual real estate! Always be certain to keep your feet on the ground, but reach for the stars!
Conditions - Non-compete clauses, consulting agreements, training agreements and other relevant parts of the structure of the agreement.
Earnest Money - A cashiers check in the amount of 10% of the offered price. This check is not deposited unless and until all of the contingencies and conditions of the Offer To Purchase have been met. After that, your check will be cashed upon the opening of escrow.