Most of the questions we field when discussing selling a website or an internet business revolve around valuation and the process involved to get to a closing transaction. However, we guide both sellers as well as buyers of websites on what action items can be done to effect continued success of the operation post sale transitional period. A adversarial sale process is never in the best interest of the parties involved. Therefore its important to layout a plan early in the process so expectations are properly managed. That includes fostering a positive relationship between the buyer and seller to insure cooperation and knowledge transfer. Its impossible for a buyer to be able to step into a business he/she just closed on and be fully versed on the inner most workings. It is critical, especially in those deals with owner financing and performance based guarantees that the outline of seller support post sale be clearly documented and often times funds are frequently held back to ensure compliance.
Here is a short list of things buyers and sellers can do to help properly transition a company.
1. Make sure all financial documentation has been provided, reviewed and all questions addressed to a satisfactory conclusion
2. Is the revenue seasonal, and depending on when the business is being bought understand the working capital required to maintain operations
2. A Seller should provide a list of all business related contacts and work together to transfer these relationships smoothly
3. A Seller should provide a list of all contract resources used in the business, contact these companies and introduce the new owner
4. A Buyer should be careful of any changes to phone numbers, support hours, and customer service personnel without thinking of their effect on the business
5. Both parties should clearly define as part of the sale, a transitional period, what will be required of a seller and the mechanisms for such support (in office, phone, email)
6. Major changes to the website should also be thoroughly reviewed as these changes can effect everything from SEO, conversion rates and customer abandonment
7. A buyer should fully understand what functions the seller performed themselves. A Seller needs to be willing to train a buyer thoroughly.
8. A Buyer should document all transitional support and provide a copy to the seller at least weekly.
9. If the company has employees, this can be a time of stress for them. Engage them and be upfront about any planned changes.
10. Respect a sellers time and if post sale payments (i.e. notes) are to be made make sure they are on time.
While some of this would seem obvious, it would be surprising how often these simple tasks are overlooked. Addressing these issues before completing the sale of a internet business will allow for a more controlled transition and limit the confusion that can occur. Any transition of a company has some complexity. You may be shipping inventory to a new location, signing new vendor agreements, engaging existing clients, interviewing employees etc… As an internet business broker, our role is to help understand the issues involved and act as an intermediary to find the best solutions. Establishing and following a plan is the best way to insure success after the sale.