What is my business worth anyway?
Ultimately, every business owner will want to know the resale value of their business. Even if they intend to pass it on to the next generation, it is important to be able to defend your valuation. Several criteria are needed to come to a reasonable valuation.
If there is real estate involved, and it is assumed that a new owner would continue the use of the property for the same or similar business, a commercial appraisal may be needed. However, lenders have some leeway on whether a fee appraisal is necessary, especially if the real estate value is less than $500,000.
A second consideration is whether the business will be sold as a "going concern" or if a new owner will be starting something new or a re-start of what was once there. A "going concern" will be valued based on historical profitability and how bankable those figures turn out to be. Most business acquisitions will involve financing, so it is important to avoid being too aggressive in write-offs in the immediate year's tax returns, otherwise a prospective buyer will devalue the business to comply with lender requirements. Saving some in taxes could result in even greater losses as it relates to the lowering of net income and thereby lowering the value of your business.
When a prospective buyer learns about your business, they will want to see two things right away. First, they will look at your website as it gives a first impression of how current your business is. Second, they will want to see your financials to determine the viability of the business.
If you're thinking a sale of your business is in the near future, contact Waking Girl Company. They have the resources to update a website and to give guidance on an independent evaluation.
Recently, a not for profit organization had a change of Directors. This change was not foreseen as the Director was diagnosed with a terminal condition that quickly took her life. The organization failed to keep a record of passwords and other pertinent information that were necessary to edit their website, check email messages and access bank and credit card information.
The Director probably had all that information saved somewhere, but where? So not only was the organization suddenly scrambling to keep up on the day to day activities the Director had been doing, they also found themselves in the dark as it related to all the technology that had been part of the organization. That is one reason to make sure the organization's website has a maintenance plan with your web designer.
Some businesses try to save a few dollars by having a staff person manage their website. Every owner or board of directors should consider engaging their web company to maintain the site and keep access for edits and changes even if the employee is making some edits. That is like an insurance policy against having an employee quit or otherwise leave the business wondering how to manage the site without them. At the bare minimum, a hosting and maintenance plan should be included with your web company.
There is no doubt that how we do business has changed dramatically since the world wide web presented itself. We have seen the demise of brick and mortar businesses all across our country. The last Blockbuster Movie store just closed as a good example. Changes in how we buy goods and services have impacted the traditional process. How we find companies to do business with has changed as well. Phone books and Yellow Pages have been replaced with web domains. Almost every business has some level of web presence these days if they want to stay viable.
When the time comes to sell a business, owners should consider part of the value of their company is their web presence. It is just as much an asset as inventory and real estate. That being the case, business owners that are thinking of selling should invest some effort in making sure their website is current and valuable and can be demonstrated as a generator of revenue. Some web designers do much more than host a site. Search Engine Optimization (SEO) efforts are a good example of additional services that drive traffic and attract sales. Social media posts and ads directed to a target market can be shown to prospective buyers that your business is viable and current with today's marketing strategies. A discussion with the web hosting company should be part of the selling process to determine what is owned and if there are any contractual arrangements that would prevent a new owner from assuming the website terms and conditions.
Your website can be modified to include a "hidden" page that can be shown to prospective buyers that give information not visible to the public that could include sales helps such as a history of revenues, profitability, cost of goods, recent evaluations of inventory, real estate holdings, etc. Tapping into the full potential of a website includes working with your web team to promote the value not only of your products and services, but your business as well.
When Waking Girl first started, we said YES to every customer who came through our door. Whether the project or client fit us or not, we made it work. Now, with a full clientele, we are limited on how much time we can dedicate to a client who struggles to be successful with us.
You may have just taken a pop quiz to see if you qualify to work with us. If you're curious about the answers we were hoping for, read on! You do not need to see your business and website the way we do. No pressure! :)
Q. A business must have a website to sell products or services:
We believe a business does not need a website to sell products or services. While a website can greatly increase sales and credibility, early deals and relationships can occur offline. Our most successful clients made their early transactions before ever having a website. We have found that many new business owners rely solely on their websites to generate sales. It is important to use multiple avenues to sell products and services, especially at the beginning stages of a business.
Q. The most important purpose of a website is to:
CORRECT: Generate leads and sales
We see business owners fail in their websites because they are more focused on making the website perfectly match their favorite color, than making it bring in $ales. This is a mistake! When clients follow our design direction, they generally see an immediate increase in sales and leads. Why? We have developed a method that make it easy for your customers to reach you!
Impress customers: studies continue to show that impressive websites don't always bring in new customers and sales. We want you to be proud of your website, but we also want your company to be approachable.
Display logo and brand: yes, we want to display your logo and brand. This goal is secondary to generating leads and sales.
Reduce my taxes: yes! Your website is a business expense! We love helping you reduce your tax burden!
Q. A business owner should take advice about web design from:
CORRECT: The web designer they hired
Intuition: can be super helpful. Let us know what your gut is telling you.
Business partner and/or staff: can be super helpful, but can also be distracting. Ask abstract questions of business partners, staff, family early in the process, like, "How do you want to feel when you visit our website? How do you want our new customers to feel when they visit the website?" Avoid specifics about design elements, colors, etc.
Articles: can be super helpful, but can also come across like you're micro-managing your web design team.
Q. A website is like a car and needs regular refueling and maintenance.
We believe a website is like a car and needs regular refueling and maintenance. Absolutely, yes! The trends of the web are changing faster than the rules of the road--and a website needs to be able to keep up. We utilize platforms and strategies that allow for easy updates and full site overhauls as the technological demands of a website, company and The Internet change.
Q. A business will fail if any piece of it is not running perfectly at all times.
We believe that growing companies do have a few failing pieces at any given time. Only the companies that have become stagnant have perfection in all areas of the business. To grow requires some trial and error. We access the knowledge base of hundreds of business owners to mitigate the risk of failure for our clients and decrease the time it takes to correct an error. We love working with growing businesses.
Q. My website budget is:
$1000/year to $1000/month
Programs also available for $1000/week website marketing budgets!
We believe it's important to have a budget for your website. While it doesn't need to be a major expenditure, a small, monthly amount of at least $100 can really help a website keep up with the changes in technology.
We strive to work with companies that we can help, by taking "web presence" off the plate of the CEO. We are a full-service agency and can handle everything from website rebuilds to maintenance to SEO and Facebook presence.
Do you qualify? We would love to hear more about your website--what's working for you now, what's not working; what's frustrating, and what about Waking Girl prompted you to reach out?