Recently we have seen several of our clients purchase additional businesses or be purchased by another company. My first question to my clients is "What is going to happen to the web site?" This is often followed by a "Huh?" and a statement like "We buying a business and not a web site." and that is where I reply you are buying both.
In many cases people know how to value a business but not how to value a web site or even understand how a successful web site plays into the success of a business. So what do you look for and questions should you ask to better understand what you are buying?
There are some key items you should review and ask when doing your due diligence. By getting answers to these questions you should have a better understanding of how important that web site is to their business and maybe how important it may be to yours.
Questions to Ask:
How many domain names does the business have?
What is the main url for the business?
What percentage of clients come form online (web) verse offline (traditional advertising)?
Do you have a two year history of online leads from the web?
Do you have two years history of online media expenditures?
Ask to see how they spent that money online, paid links, banners, pay per click, SEO services.
Do work with an Internet Marketing Company? If yes who?
How long have you worked with that Internet Marketing Company?
While this doesn't go into how to strategize the site or what to do with it, that will be another article, it will start to give you an idea of how reliant the business is on the web.
It is important to know whether you are buying something that is sustainable and solid or if the business was built to look good and be sold.
These questions should give you insight into how this company has used the web, allow you to learn how to maybe use the web better and validate that you are making a smart purchase.
If you need an outside perspective and insight into the data, contact Sales & Marketing Technologies and we will assist in getting and analyzing that data for you.
In a future article, we will discuss what to do with that web site once you have purchased a business.
Tags: web site valuation, mergers, acquisitions, business web sites