Internet Marketing | Lead Generation

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

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

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.

Criteria for reviewing a website will vary from industry to industry but generally speaking most websites succeed or fail in their objective based on the following:

· Does it communicate the website owners message / brand effectively?
· Is the website easy to use, is it “intuitive” or does the surfer really have to think in order to work out how to surf around the site?
· Does the website effectively sell it’s product?
· Does the website produce enquiries? (Get leads)
· Does it entertain? (Yes, some websites are purely for entertainment purposes)

Now in the case of most home improvement websites there really is one main criteria – and that is: does the website produce leads?

It is important I feel to emphasis that in the majority of cases the purpose of a conservatory or double glazing related website is not to actually SELL a product, but to SELL a surfer on the idea of making an enquiry.

why disabling right click is not a good idea….

As a website owner, it is always a bit frustrating when you find other websites cloning or copying your work. The most common of these is of course STEALING images.

I had an interesting experience the other day when I found a website with several images that I own on it - including an image of my own conservatory at home. (Yes, the conservatory on my own home) Interestingly - the thief after stealing the image from me had decided to disable RIGHT CLICK on this website. When you right click on the image a notice came up that says “© Copyright!”

The cheek of it!! In theory they were trying to stop someone stealing my image of their website.

Despite the legalities of this situation - what this thief did not realise is several things:

1) It is actual very easy to get around “disable right click” - takes literally seconds to do, so for a determined thief, no protection at all. (I am not going to explain here, but try a search in any search engine, and you will soon find out)

2) Many people use right click in their normal surfing activity - not just for stealing images - and frankly it is an insult to those people, to offend them by having silly COPYRIGHT WARNINGS popping up al the time.

3) It actually does you harm in other ways also. The following is the BIG ONE for me as it actually lowers your user friendliness. I am the editor for several web directories - who’s job is to review web submissions or find additional websites to add to the directory. Now I am not saying I’m lazy - but it is common for editors to copy and paste some website copy prior to editing and adding to a directory. (A directory, which if you are listed in it, will bring you more traffic). Most editors I know, if they find Right Click is disabled, which prevents them copy and pasting, will just move on to the next website and not bother to list the “offending” right click disabled website

Do you see websites like Google, Yahoo, Amazon etc disabling RIGHT CLICK? Of course not! Now if they are not doing it, perhaps there are good reasons for that.

Frankly when I find websites disabled - I think Amateur / Gimmick - and someone who is pretty naive - if they think that stops their content being copied.

Of course stealing content is wrong - but using Disable Right Click to stop it is not the way to FIX it.

Another day, I may just talk about more effective ways to enforce copyright protection - but for the moment, unless you want to be considered an amateur - do not disable Right Click.

A reliable way to measure website traffic

HITS, PAGE VIEWS AND UNIQUE VISITORS!

One of the most widely misunderstood issues on the Internet is the difference between hits and unique visitors. If you asked people which is the more impressive statistic - 500 unique visitors a day or 100,000 hits a week? - Most would choose the latter. The answer is that both these figures could in fact represent the same thing.

Hits
If anyone who isn’t a network engineer mentions ‘hits’ to you, they’re probably trying to pull the cyberwool over your eyes. Hits are the individual requests a server answers in order to render a single web page completely. The page document itself plus the various images on the page and any other media files embedded there all represent individual requests to the web server. Each of these requests is called a hit - a hit is a request to the server for a file not a page. So to summarise each file sent to a browser by a web server is an individual hit.

Hits are not in my opinion a reliable way to measure website traffic

In other words, the more images used in a page, the higher the hit count - so while hits may be a good indication of a graphics heavy webpage design, it doesn’t tell you much about traffic.

To give you an example of how misleading ‘hits’ are, consider a web page with 10 images (graphics) on it. One individual request to view that page would count as 11 hits - one hit for the HTML code that makes up the page and 1 hit for each of the 10 images ‘called’ from the server.

Page views
Similar to hits, page views are files requested from the server but are limited to the web pages themselves (i.e., HTM or HTML files, or Hypertext Mark-up Language files). While a little more concrete than hits, page views do not give specific information about surfers or their behaviour, for example, the length of time that they remained on a specific page. It is, however, a good indication of how well your site is received. If you are averaging more than 6 page views per unique visit you can consider yourself to be doing well.

Unique Visitors
I believe that a count of ‘unique visitors’ is the best way of determining your web site effectiveness. Unique visitors are tracked not according to the files they have requested but by their unique IP (or Internet Protocol) addresses, which are much like online fingerprints.

For example
If we have a site averaging 500 ‘unique visits’ a day and each visitor views four pages which each consists of seven images and one HTML file (representing eight hits) you will have a site ‘claiming’ 112000 Hits a week!!

500 visitors x 4 page views x 8 files (hits) x 7 days = 112000 HITS

As you can see, web design and Internet technology can be fraught with obstacles for the uninitiated. Armed with these facts you will, I hope, be able to make a more informed judgement about the services on offer and the claims made by potential suppliers.

Selecting a Website Design Company - My top tips for ensuring a trouble-free web site design.

When it comes to selecting a website design company keep the following in mind and you just might get the WESITE YOU ALWAYS WANTED

1) What are your objectives? Do you want to sell directly from the web site
or do you wish to use your web site as an online brochure - producing leads
to sell in a more traditional way?

2) Determine a budget. You don’t need to spend thousands of pounds on your web
design - but clearly a budget of £5000 will create more than a budget of
£1000 or £500. Be realistic about what you are trying to achieve. Don’t
expect an all-singing, all-dancing site if your budget is limited.

3) Become familiar with the web. Spend some hours ’surfing’ the net and
‘bookmark’ sites you like the design of. Show these to your proposed
designer. I find a surprising number of business owners have commissioned
web sites when they themselves have little or no idea of the Web and how it
works. They have left this all to the web designers - often with disastrous
results. It’s no coincidence that these are the same people who often
mistakenly think that the Internet doesn’t work - just because their first
attempt did not prove successful.

4) Local or Global? If your strategy is more local than global then clearly
the Internet will work differently for you compared to organizations
operating nationally or internationally. Top search engine positioning will
not be such a great priority as most of your web visitors will come via
local more traditional advertising. However, please don’t make the mistake
of assuming a ‘lower quality’ site will do. Your visitors will still ‘judge’
you against all the sites they visit - so you still need an easy to use /
navigate web site with a professional feel.

5) Determine a deadline. Be realistic - if you want a site urgently make sure
designers you speak to understand this. Also be prepared to work with the
designers and provide feedback / approvals as quickly as possible. I have had
websites up and running within the week - however 3 - 4 weeks is a
more realistic time scale.

6 ) Search Engines. Ask your web designers for evidence of their success in
placing sites they have previously designed high in the search engines. Web
design and web marketing / search engine promotion are quite different
skills. Ideally they should be carried out by separate people /
organizations. (working together) A lot of web designers do not even know
how to design a site that both looks good and is search engine friendly. If
they can’t show you proof or fill you with confidence on this issue - don’t
use them. Also their ‘proof’ should be from one of the major search engines
/ directories (Yahoo, MSN, Google) - not one of the many smaller engines
that now exist but which few people actually visit!

7) Graphics Avoid the extensive use of graphics on your site - they take
longer to download and spoil the viewing pleasure of your visitors who are
likely to ‘click away’ if the page takes too long to load. Better to have smaller images, which load quickly, along with
interesting well-written text that catches the visitor’s interest. The
smaller images can be ‘thumbnails’ which visitors can click in order to view
a larger image if they require. It’s also worth remembering that it’s mainly
the text within the ‘body copy’ of the web page that search engines ‘read’
(index). If your home page, in particular, consists of one or two large
graphics and very little text it’s unlikely to rank high in search engines.

8) Plug-ins Special software or ‘plug-ins’ that needs to be downloaded in
order to view a site should be avoided. They tend not to be search engine
friendly and will often take quite a while to download. (My only acception to this may be: Macromedia Flash 8 Player - which is increasingly useful for viewing video content)

9) Frames Please make sure your web designer avoids using ‘frames’ to design
your site. Frames are a method of displaying two or more separate web pages
on your browser screen at the same time. I will not go into a detailed
explanation here of why you should avoid them - suffice to say that any
designer ‘worth his or her salt’ should know they are not particularly
search engine friendly. If they don’t know this, avoid them.

10) DIY Of course you can design your own web site. Simple software to do this
is readily available to download on the internet and is often given free
with computer magazines. However, unless you become a very proficient user
(which takes time) your sites will tend to look ‘amateurish’. In my opinion
it is much better to use a professional. The DIY programmes are often just
‘too simple’ (a bit like desktop publishing) and will not give you the
editing features necessary to create a search engine friendly web site. Also
beware of the many so-called “friends of friends ” who have suddenly become
web experts and claim to design sites. They could be using this free simple
software. Ask them the same questions that you would ask any web designer
and in particular ‘what about the search engine successes?’.

11) Final approval Before ‘approving’ any final web design insist on viewing
that design online. Often designers will present their ideas on a laptop -
where the proposed web design is stored on the hard drive. That’s fine - but
be aware the hard drive will deliver the images much faster than the
Internet. You don’t want to find that this design you like on the laptop
‘takes all day’ to download when it’s on your web site.

12) My final tip So often we find that the design of the company web site is
‘relegated’ to the IT department. While I wouldn’t suggest that the IT
department shouldn’t have an input, - I would point out that this is
primarily a marketing issue. After all, you would rarely consult the IT
department over the design of a new brochure. When you start getting those
web enquiries you need to make sure they are responded to as quickly as
possible. You should at the very least respond with an email
acknowledgement. In our experience those in sales / marketing are best
placed to do that.

How to get more leads from your home improvement website

Everyone wants leads - but you know it is an amazing thing - lots of companies build websites, even spend some money on Pay Per Click Advertising (such as Google Adwords) and perhaps even paid to be listed is some directories such as
Conservatory Buyers Guide
and then wonder why they don’t get leads, or don’t get as many leads as they would hope to.

Often they have spent significant sums on the website - and frankly a lot of these web designers can build you nice looking websites (with all the bells and all the whistles) - but many don’t build the web sites to CONVERT visitors to leads.

Sometimes home improvement companies even write of the Internet as “not working” - failing to realise that they actually control their websites destiny and the fact the site is not producing leads is that NINE TIMES OUT OF TEN - they don’t make it easy for their website visitor to give them a lead.

As an Internet Marketing Consultant I am often asked to review websites - and come up with some ideas for improving the conversion ratios (usually - leads to visitor ratio)

Perhaps I really should not give away a “trade secret” like this - but really this one point is so OBVIOUS that I am surprised web designers are still building websites with this “built in fault”

To increase your leads - MAKE IT EASY FOR PEOPLE TO CONTACT YOU.

Often a website will have a “contact us” button tucked away in some far corner that is not easy to find.

Please, PLEASE, put your contact details on each page - and also ideally - strategically within the website copy.

Better still - change “Contact Us” web form to a “Free Brochure” or “Free Info” or “Free Information Pack” and you will see a significant increase in sales leads (as much as 50 - 100% increase sometimes)

You should also have clearly - and in large TYPE have your phone number at the top of each page.

You should have both a form to fill in and your contact phone number showing.

Far too often salespeople and sales managers worry about the tyre kickers and the brochure hunters - and try to qualify their leads too much. The point of most contractor based, supply and install home improvement websites is not to SELL a product but to sell visitors on the company and encourage them to request more information.

I spoke to a sales manager the other day who complained how bad business was and the economy was all wrong blah, blah…..

A little later we are talking about web leads and he declares he only wants leads of his websites from people who want to have one of his sales people out for a quotation. (hense why his website only had a request a quote link)

Clearly he had not considered that some people may wish to make a “softer approach” first - to find out more about his company before asking a sales person to quote.

Sad for him, sad for his sales people and sad for his company

Please don’t make this mistake

Good Selling To All

Barry