Get it in Writing

January 15th, 2007 by Chris

One of the happiest days for a website publisher is when a buyout offer comes. Even if you do not accept it, even if it is far lower than what you would sell the site for, it is nice to know that others do value your site. However, before answering any purchase proposal, ask for it in writing.

The reasons for getting it in writing are many. If you do end up accepting it you will have a document showing the original offer if they try to renegotiate. However, this post is not meant to be a primer on purchase negotiations.

Rather, it is good to keep proof of what you have been offered for your business.

If you ever need a third party to value your business, perhaps for a credit or loan application, for instance if you were to open a business line of credit, then having a document showing a value for one of your websites or your business as a whole is a very good thing. I wish I had done this as I recently opened a business line of credit and trying to get these stuffy bankers to appropriately value my business was a huge pain. I had been offered $250k for one of my sites in the past, which was just barely over 12 months earnings at the time so I turned it down, but still, that small amount would have made a big difference to the bankers.

Also, you must think of your family. Often it is discussed in forums about what would happen if you died. You’re probably a one man business, or at the very least, you’re the only man (or woman) in your business that knows how to keep everything running. Many website publishers leave files of instructions on how to keep the business running, or how to dismantle and sell it. With a document such as described above you’re leaving your family a ready made buyer to contact about the purchase of your sites. It will make it that much easier for them if you are not around anymore.

Finally, if the day comes when you do sell your business, having prior offers that you can easily prove could help you negotiate a more favorable price. You may even contact the past bidders and try to get them to bid against the new one.

So next time someone emails or phones you about buying your business, ask for their offer in writing before giving an answer. You don’t need to justify your request, it isn’t that odd and they’ll merely assume you want to be legally thorough. Plus, if they balk, they probably were just jerking you around anyways.

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Posted in: Business Management, Website Management »  by: Chris

One Response to “Get it in Writing”

  1. Steve  Says:
    January 15th, 2007 at 2:23 pm

    I never though of that have it in writing in terms of when you need a valuation for credit. That makes a lot of sense (also the family thing but not something I need to worry about quite yet).

    Thanks

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