“What information do I need to have?” That is most often the first question we get when we engage a client. Selling an internet business [as opposed to a website domain or developed web site that is parked] can be a complex process. Its made easier by being organized and efficient with your data. Additionally, a high level of organization and easy access to information helps your website business valuation as it aids the appearance of legitimacy and sound management.
With that in mind, here is a short list of the top 10 items to have prepared.
1. Itemized Profit and loss statements dating back at least 2 prior years along with TTM (trailing 12 months) statement broken out by month.
2. Balance sheets for the same periods
3. Bank statements and merchant account statements for previous 12 months. (read more: preliminary due diligence)
4. Tax returns for 2 years
5. Traffic Analytics, PPC vs organic placement rankings, conversion rates, average sale, revenue per unique visitor, etc.
5. Breakdown of sales revenues by channel: organic traffic, PPC traffic, newsletter, affiliate program, etc.
6. Breakdown of advertising spending costs: PPC, banner ads, print.
7. Customer data – how many total, number of repeat customers, lifetime value of a customer.
8. Product/Service Sku Data: Number of products/services, revenue breakdown per product/service, customer/client breakdown per product/service.
9. Explanations of any adverse items: legal, poor customer review – do not attempt to hide any issues
10. Description of corporate structure, date incorporated, state of incorporation, member/shareholder information.
Every situation is different so this list is not meant to be complete. Some of this information is needed early on to help with valuation while some would be reviewed during a due diligence exercise once terms have been agreed upon. Again, being prepared and having an advisor or business broker that understands an orderly process can be key to a positive outcome is crucial. iMerge will be completing an exit planning guide in the near future which is a more detailed look at understanding the entire process of selling an internet business.