Internet Marketing | Lead Generation

How to Maintain Business Focus in Joint Ventures and Coaching - and protect your self from Business Wannabe Energy Vampires

One of the hardest things in business (or life) is to keep our FOCUS.

For me that personally means using my time as productively as possible. Occasionally something comes a long that appeals to our “ego” (sorry, can’t think of another word) - and while there is nothing necessarily wrong with that - it is in my experience those things that distract us the most from our objectives and goals and ultimately make it more difficult to reach our goals.

For example, I pretty regularly have people approach me with ideas and Joint Venture proposals - but almost without exception these approaches are from less “successful” people than myself. (Hey, I know successful is a subjective word)

I even have requests for coaching and proposals offering shares in future profits. Now these approaches are flattering (well, for the ego at least) and if I was not more careful, I would find myself getting involved in quite a number of them

You see, TIME (not money) is the most precious thing we have in business and the idea of giving up any of your time to focus on anything other than your core business objective has to be treated with caution. Many the potentially great business have remained a mediocre business because the owners could not maintain their focus or allowed their EGO to get the better of them.

You see, with that time invested in my own business, using my skills and contacts, I could “earn” considerably more in the long term by building up a new business that could be sold etc than I might ever in a JV or individual coaching.

The other issue that I have with “coaching” (not so much consulting) is that when you coach, you almost inevitably become responsible for that other persons “success” or “failure”. Now of course, professional coaches have ways of “re-framing” this so it is not their responsibility but none the less it is I believe an issue. I have several friends who are coaches and they have said this is one of the “negatives” of what they do.

People even come along and offer you a share of their “profits” (it has happened to me) - but that in my opinion is a JOKE, as frankly those profits would not be there had it not been for your involvement.

As a generalisation - I will only ever Joint Venture with someone who I at least consider my “equal” or someone who can bring something to the table that I cannot. Someone who is not yet successful on the web, who is offering you a share of his / her future profits and you have to JV / Coach them is not in my opinion an “equal”. They need you a whole deal more than you ever will need them. For me, one expression of ENERGY, IS MONEY and BUSINESS SUCCESS and anything that drains me of Energy (like listening to other people and their issues and why they are not successful) drains me of business success - so I avoid it whenever I can.

The only realistic alternative I would consider - is in the longer term to offer an “apprenticeship” or “mastermind” program - but I don’t feel that can be offered until your existing business is highly successful and is running almost on auto-pilot or perhaps even better, after you have exited your existing business.

I have had some interesting responses and emails about my recent articles.

I am delighted that so many found the postings interesting. For all the positive feedback, please be aware, I am only relating personal experience, you may or may not do better in your own deals. Lets hope better

See the previous postings at:

Buying and selling a website or web business, how the deal is structured AND

Tips for selling a portfolio of profitable websites

One interesting response, which I was almost going to dismiss initially (because I thought it a bit odd that you could be selling a business, but not able to pay the fees) really caught my eye on a second look.

What would you say to a seller who wants to sell his sites and business,
but has absolutely no cash for a lawyer, and an accountant?

An interesting question.

Now, first off realise that if you are hoping to sell a website or business using accountants and layers, and you hope to sell for a
significant sum, then it will almost certainly mean that the business has to be making profits, otherwise, why would you be asking for a “significant sum”

And if you are making a good profit, then why should it be a problem finding the lawyers / accountants fees?

Of course, as with everything, there can be exceptions, for example, if you had built up a website with a unique backend (software) and had invested a lot of money in this and the site had POTENTIAL, but no profits yet, some buyers / investors will pay you for the “idea” and the software development.

But speaking personally, if I was in this position, I don’t think I would be trying to sell my business, I would be looking for Venture Capital and if that is your situation and you really do believe in your “baby” than I would not consider selling until you had first went the VC route.

But coming back to the original question, and forgetting about any of my assumptions above, it is still always possible to do a “deal”, even with lawyers and accountants. Indeed my own Lawyer for example made me a “win (sell) , pay a higher fee or lose, pay almost no fee” type offer when selling my business, and while it was tempting, I did in the end, opt to just pay him a straight fee. This I suppose, for me was good as we did eventually do the DEAL (win). As with everything in life, you don’t know, until you ask - so you could consider approaching accountants / lawyers on a NO SALE / NO FEE basis.

However, this would not be an approach I would personally encourage and I would warn that this could be quite a waste of energy and frankly if the Layers and Accountants are willing to work on this basis, then it is a sign that you have a pretty decent business. And on the other hand, they will not work on this basis, perhaps it says something else? Plus, I’m sure a good number of lawyers and accountants will not even entertain the idea.

There is also, one more alternative - and that is to make an agreement with the buyers, that they will pay ALL fees (both buyers and sellers) but this will become very messy and can create quite a lot of issues, so again not something I recommend, just pointing out that it is another alternative. When selling a business it is important that you receive your own independent advice - not only from an independent lawyer and accountant, but also from Tax professionals.

Good Luck with your sale

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As you can see, quite a diverse range of subject matter

Every once in a while you discover something exceptional on the web that inspires you, entertains you, makes you look at life and the world in a different way

For me, that happened this week when I discovered Steve Pavlina for the first time.

I don’t think I have ever came across a website with so much, quality free information on personal development, the internet, running a business as Steve’s website.

You will just have to visit it - and I hope find out for your self - but for now I will if I may just point out a couple of personal highlights.

For example check out: 10 Reasons You Should Never Get a Job

And then there are his Pod Casts - try this one: How to Make Money Without a Job

And I also love / admire Steve’s “About Steve Pavlina” section on his website:

Steve Pavlina is a blue-eyed, colorblind, left-handed, well educated, vegan, lucid dreaming, purpose driven, happily jobless, reality manipulating, meditation practicing, Reiki healing, risk taking, goal seeking, problem solving, early rising, passive income generating, highly motivated, energetic, disciplined, persistent, optimistic, fearless, and proactive… writer, speaker, blogger, podcaster, computer programmer, game designer, entrepreneur, husband, father, and archetypal Aries.

Made me smile and smile - a website I will be going back to often.

UK Window Industries Top 30 Most Influential Report

As I think some of you may know, I was once a Double Glazing salesman (Replacement windows salesman to you USA Visitors) and I did own my own double glazing company.

It seems some of my Peers (and other Window Industry Experts) have not forgotten this and have done me the very great honour of featuring me in the 2006 Window Industries Top 30 Most Influential Report.

Apparently this was in recognition of me being the founder of Ebuilders Ltd - a company that specialised in the generation of home improvement leads, in particular for the Window and Conservatory industries. I think I can safely say that I was a FIRST MOVER in this area, at least in the UK and that our sites were responsible for Tens of Millions of Sales each year - making us I suppose somewhat “influential” - but of course it is always nice to be “recognised”

Anyway - you can read the report at the link below - I am at No 22 and I hope you agree, I am keeping some very good company

View the Window Industries’ Top 30 Most Influential Report Here

Thank you Window Industries

Window Industries First published in 1972, is the longest established monthly magazine for the uk glazing industry. Incorporating Double Glazing magazine, each issue covers news, business, company profiles, and in depth features.

I have been asked quite a number of times recently about how “bigger deals” are structured when it comes to selling a website business. Of course I can only speak about my own experiences, but hopefully the following will assist some of you who are selling a web business - big or small.

For example, I have been asked, Do you get all the business valuation in cash or if you do not, what kinds of security can you look for? Basically Barry, give me an example of how a deal to sell a web business (or indeed any business for that matter) can be structured.

Like I say - I can only speak from personal experience and my knowledge of some of the DEALS my friends have done when selling their businesses.

So here goes and first the “bad news”

Very few buyers of big sites or web businesses will ever give you the full money in cash up front, it just does not happen that way - well not on BIG deals when you get into 7+ figures (and I dare say, for 5 and 6 figures also)

Of course, depending on your point of view, the above is not necessarily “bad news”. Some business owners just get bored with what they are doing, or consider they have taken the business as far as they can and are looking for something new. That was the case with me - some boredom creeps in. (Sad, I know!) But I am not unique, I have met other business owners, in similar situations who just got bored.

So in my example - at exit (sale of business) I was actually looking to keep a stake in the company I was selling - simply because it still had a long way to go and with a bit of luck the new management, would make an even better job of it than me - resulting hopefully in a “second payday” for me when the new management sold out. (The new management it has to be said, are professional managers, unlike the serial entrepreneur that I am)

To be fair I was never ever offered the full valuation in cash, but even if I was, I’m not sure I would have wanted to take it - or perhaps I would have wanted an even higher cash valuation.

With regards to “security” - well that’s a difficult one. The buyers actually offered me Preferential Shares - that were redeemable should the new management fail or not meet certain levels of performance. In the end I declined the “Redeemable” bit, but this was to do with UK Tax laws - basically if the shares had been redeemable, I may have had to pay a higher rate of tax. So to answer your question - there is no Security in the normal sense and in my experience that is also pretty well the norm. I think as a seller, it is best if you can live with the concept that the only CASH you may ever see, is the initial cash and anything over an above that is a bonus. For that reason, you should of course look to get a significant cash sum on doing the “deal”.

Of course in my example - I am talking about selling a business, not a website and selling a web business is quite different from selling a website or two. I should think that if you are selling relatively low value websites, then you would want all the cash, there and then.

I am not going to reveal the exact deal I did - but I would say that in my experience, the following format is not uncommon.

CASH - PREFERENTIAL (INTEREST BEARING) SHARES - REGULAR STOCK (SHARES)

Cash: Typically anything from 20 - 50% of valuation
Preference shares (loan) - paying interest - anything from 20 - 50% of valuation
Regular Shares - say around 30% of the new company (in many cases, a new company is created, which will own the company you are selling and you will own shares in that new Holding Company)

The last part of my example above assumes the STOCK / SHARES is still in the business you owned or a NEWCO created out of the business you owned. If for example the buyer is an established company, who offer you stock as part of the deal, then the percentage bit I’m quoting would I’m sure be quite different.

So for example:

40% Cash / 30% as a loan and paying you interest (Preferential Shares) and 30% stock in Newco is fairly normal

Interest on the Preferential Shares varies - but anything around 10% paid monthly is good

Typically the new management will seek to redeem the interest bearing shares ASAP - as the interest rate being paid out is usually above a commercial rate available from banks. They will pay you out of this either by refinancing their borrowing after two or three years or from profits in the company. (Yes, you are being paid out of the profits of the company you created and which you would most likely have still enjoyed, if you had kept the company - again fairly normal.)

Some sellers have an issue with the company they sell, paying them out of the profits, later down the line - but in my experience, unless you are pretty unique or lucky, that’s just the way things are done.

A side note to my deal: I agreed to do one day a week consultancy for two years.

Another Point To Consider:

Almost all new owners will want some “hand over” assistance - even on small purchases, never mind, BIG purchases!

As an example recently I wanted to buy a very nice “authority” site - with a PR7 and frankly TOP of it’s niche. Owner wanted circ $50000, which in itself was not that big an issue, but quite remarkably, did not want a consultancy contract or to help out any more with the site - post-sale. In the end, that was the main reason I did not proceed with buying his site. And I was more than happy to pay additional for that consultancy.

Think of it from a buyers point of view, you are the seller, make it as easy as possible for them to do the deal. Offering to help out, to assist, gives them more confidence in you and helps get the deal done.

Also, as another side note, if the new management are raising funds from Banks or VC’s they will almost certainly want to see some ongoing commitment from the previous management.

I hope this helps. If there are any more questions you consider I can help with or give an opinion on, please ask away

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Some Tips for selling an above average portfolio of websites (a web business) - that has sites making significant yearly profits over a period of time.

When buying and selling “lower division” websites valuations of 6 - 10 times monthly income are currently considered fairly normal. However, when it comes to selling a High Profit Web Business - especially one that is uniquely positioned in the market place, then it is an entirely different kind of game - and significant valuations - based on a multiple of yearly profits is possible. When I refer to high profit web sites - I mean sites making net profits of in excess of $250,000 PA

Firstly if you are selling this kind of the business - the following is I believe essential:

A Non-compete ( and NDA) is essential, simply because you will have to reveal a lot of intimate data about your business and your strategies in order to get a firm offer. The buyers and their team of professional advisors will ask you questions you could never even imagine in my experience. There is no point in hiding anything because sooner or later as the sale progresses you will need to REVEAL even more information and I dare say give some warranties about what you have claimed / said. (i.e. they can claim back from you the seller, if at a later date they can prove that something you said was not true or that you neglected to let them have appropriate information).

This process is usually referred to as DISCLOSURES - and if you leave anything out, there will be problems later. When I sold a business recently, I ended up disclosing things that may not really have needed to be disclosed, on the basis, that if I disclose it now, the buyers cannot at a later date come back and say I failed to tell them.

In the DUE DILIGENCE - You will be asked for details of any current or past litigation you may have been involved in? Details of bad debts, Details of employee’s contracts, details of sub-contractors contracts - the list will go on and on. (For a professionally run business - It is not really a big deal any of these)

In my experience, you will get more money for the business, the better and cleaner your systems are. Basically everything about your business should be documented. Imagine you got run over by a bus tomorrow - and someone had to pick up the pieces after you had gone, would they be able to that?

If a business owner does not have all of this covered at present - then I would suggest they put sometime aside ASAP to concentrate on it. One day, when you do eventually sell - you will need this documentation and of course it will give the potential buyers more confidence in your business if they can see you have this information.

Finally, selling a company costs money - and it will often cost you money, even if you don’t sell. When I sold my company, the professional fees exceeded $60,000 - and in the UK the owner / shareholder personally pays this money, not the company.

Having said all this - if you are looking at these sums of money - either as a buyer or a seller - my main advice would be to get a Business Attorney / Lawyer onboard and advising ASAP.

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I am afraid that I must now state the following:

BARRY DUNLOP DOES NOT GIVE LEGAL OPINIONS

DISCLAIMER
The material contained in this web site is provided for general information purposes only. The material is believed to be accurate although no representation or warranty is given (express or implied) as to its accuracy completeness or correctness. The author accepts no liability or responsibility whatsoever for any loss suffered by any use of the information contained on this web site. By continuing to use this web site you are deemed to accept the above terms and conditions.

I recently made a new online friend (Dean Hunt) - who interestingly had some similar ideas to me about buying websites.

Turns out we both have issues with this magic word that sellers like to use called: Potential

Dean has made a great posting on his Blog which frankly says it all a whole lot better than I can.

Read it at: Web site POTENTIAL

Excellent reading for both sellers and buyers of websites - the examples used are some what UK based - but whatever country you are in I am sure you will be able to draw similar comparisons

Read Deans Blog at: Deano’s World - Internet, Marketing, Madrid, Life, Humour & More.