Google Answers Logo
View Question
Q: Buyers for a women's network ( Answered,   0 Comments )
Subject: Buyers for a women's network
Category: Business and Money > eCommerce
Asked by: get_better-ga
List Price: $40.00
Posted: 29 Sep 2004 23:29 PDT
Expires: 29 Oct 2004 23:29 PDT
Question ID: 408252
We own and operate a women's network - consists of a network of sites all
related to women. We got close to a million page views a month (I think).
This is one of our portfolio companies. We are not able to focus our attention
on this property and I feel that any other company with the right
interests can make the most out of this. I am inclined to sell this to
the right buyer with the right price. How do I go about achieving this
Subject: Re: Buyers for a women's network
Answered By: aliciadenney-ga on 30 Sep 2004 07:38 PDT
In the most simplistic terms imaginable, please consider the sale of
your e-business no different than selling a home.  There are a few
ways in which a  home seller can go about doing such--the for sale by
owner route as well as the use of a realtor route.  Both have their
pros, and both have their cons.  In this answer, I am going to outline
the steps necessary to successfully achieve your goal (which is
obviously selfless--it is really cool that you think that someone else
might do a better job with the cause of the business if it was their
focus), as well as give you some well thought out sources for
arguments behind selling it yourself vs. selling through a business
brokerage firm (the equivalent of a realtor).

The VERY first thing that you have to do after deciding to
sell...PAPERWORK out the wazzoo.  Here is a list of documents
considered necessary to facilitate the first steps:
Three year's financial statements
- Tax returns for three years
- List of fixtures and equipment
- Approximate value of inventory
- List of employees
- Customer lists (or, in your case, e-leads)
- Copies of the lease (or in your case, domain agreement)
- The franchise agreement (if applicable)
- List of loans with balance and payment schedule
- Copies of equipment leases
- Names of outside advisors (business broker, lawyer, accountant...)
"Even if you have prepared your own financial statements in the past,
you should consider having an outside firm prepare or review them for
the sale. This will increase the value of the business in the eyes of
potential buyers and the likelihood of making a sale."
Is your company's accountants and lawyers up to the challenge to
prepare these documents in a totally accurate manner?  If you are
trepidatious about this, perhaps considering a broker mught just be
your best route...which leads us to the next step:

The second step that you must take is deciding whether to do the sale
"by owner" or through a broker.
After researching this and reading up, I have come to the conclusion
that both are feasible, especially for an e-business, but EVERY
article (sourced) that I have read have really pushed for the would-be
seller of a business to, at the VERY least, have an advisor on-hand
during the sale period.  Here are some excerpts on an especially
inspired article that I read:

This is what one guy decided to do--a combination of both:
"I handled all the contacts with potential buyers myself, which was
really an exercise in networking but very important in getting it all
done right. Then I relied on an investment banker to help me hammer
out the best structure for the transaction."
Brendan Burns, the president and CEO of the original company and now
CEO of the new venture, AdOne LLC, headquartered in New York City.

In some situations, all that a sale-oriented adviser adds is more
expense and an unnecessary level of bureaucracy. In other situations,
though, it's tough to imagine how a deal could get done well without
an independent expert equipped with a Rolodex full of networking

Do you already KNOW all of the potential buyers in this niche?  Consider this:

"One very big consideration is the kind of industry you're in -- and
how knowledgeable you are about it," says Marc Rubenstein, a partner
in the Boston law firm Palmer & Dodge LLP. "In some industries,
business owners know all their competitors. They run into them all the
time, and they're the most likely purchasers. Or there are only a
handful of financial firms that invest in a business's niche, and
again, the owners know them all."

Chances are, with an e-business, this is not the case.  This same
article alludes to the fact that, if you already know everyone, why
not go for it yourself?  You would have the same resources that a
broker has, without all of the extra cost and beaurocracy:
"In some situations, all that a sale-oriented adviser adds is more
expense and bureaucracy."

Even if you are leaning towards the do-it-yourself method, as I stated
above, EVERYTHING that I have read alludes to the fact that you are
going to need some type of professional assistance.  Consider this
 "Especially in those deals where the owner is going to stay on for a
while, either working as a consultant or as a high-level employee of
the buyer, it can be very difficult to go head-to-head in bloody
negotiations and then plan to show up for work for the next few
years," says Layne. "It's better to have an adviser handle that kind
of negotiation for you, so that you can maintain good relations
throughout the whole experience."

Having a broker around might be a good idea because there are so many
facets and logistics behind this process:
"Having an investment banker involved helped a great deal at a couple
of points," he recalls, "when we needed to defuse the tension and just
step into the background for a while. I'd say that he was instrumental
at those points in moving things along in the best possible way."

Before deciding consider the following factors:
Don't decide to sell your company by yourself before you answer these
four questions:

1. Do you have a fairly good sense of how much your company is worth?
If not, it pays either to get an independent appraisal or to rely on a
business broker or investment banker. Otherwise, you risk underpricing
the company or discouraging potential buyers by pricing it too high.

2. Can you draw up a list of likely buyers?
Depending upon your company's niche, your prospects might be
competitors, suppliers, strategic partners, or customers. Don't cheat
here. If you really don't have a clue, you're better off relying on a
professional who has already gone this route.

3. Do you really have the time to do this?
"It's incredibly time-consuming to do the networking yourself, so
you've got to have the internal organization to support you,"
emphasizes Brendan Burns of AdOne. "The important thing is to keep
your company moving forward through the whole process." If you know in
your heart that you (and your staff) won't be able to manage both the
sale and the company's operations, don't try to go it alone.

4. Can you do a better job than anyone else?
If you're articulate, passionate about your company, and -- above all
-- not self-conscious about pitching it for sale, then the answer is
probably yes. But if you suspect that your emotions or anxieties could
get in the way, step aside.

I think that the above is GREAT advice for, if you
DO decide to utilize help, there are two routes that you can take:
1.  A business broker
2.  An investment banker

Below is an article that outlines the differences between the two:
In sum: 
?Business brokers and Investment Bankers serve two very different
markets. Business owners thinking about selling a business should
consider the size of the company involved, the complexity of the
transaction, and the probable location and sophistication of potential
buyers when choosing a suitable advisor..

Generally speaking, Investment Bankers concentrate on assisting
clients with the acquisition or sale of mid-sized or middle market
Note, though, that this company is an obvious proponent of the
investment banker?they are exactly that!

Here are some statistics on how businesses are sold in this post 9/11 market:
Companies with Annual Sales less than $100 Million 
With an intermediary 10%
Without an intermediary 90%
Companies with Annual Sales more than $100 Million 
With an intermediary 90%
Without an intermediary 10%

1. Without an Intermediary:
	Your company is sold using your lawyer and accountant.
2. Business Brokerage Method:
	A brief book is prepared on your company. 
	Your company is offered to all prospective buyers. 
	A specific asking price is stated. 
	Your company is marketed via ads, Internet, and word-of-mouth. 

3. Advanced Business Brokerage Method: 
	A book with more information is prepared on your company and industry. 
	Your company is offered with no specific asking price. 
	Your company is offered to both target buyers and other interested buyers. 
	Marketing of your company via ads, the Internet, and word-of-mouth
may or may not occur.
4. Investment Banking Process 
	A very comprehensive book on your company and industry is developed. 
	The book serves as a foundation for the buyer setting a value on
your company prior to a visit. Later, after the Letter of Intent has
been signed, the book serves as a foundation for the buyer's due
diligence on your company.
	No asking price is provided. 
	Your company is offered only to target buyers selected after
extensive research and only to those who meet your confidentiality
	Buyers are required to make multiple bids; one of which is prior to
a visit to your company.
	Your company is marketed worldwide to select buyers. 
	All buyers adhere to a strict timetable for the entire process. No
buyer is permitted to move ahead in the process unless he/she wishes
to make an unusually attractive pre-emptive offer after other letters
of price indication have been received.
?We have learned that 9 out of 10 businesses in the U.S. with annual
sales under $100 million sell without an intermediary (investment
banker or business broker).?

Here is yet another article that really points to the necessity of
help in selling, but it is also a nice step-by-step guide:,4621,289171,00.html

Once you have decided on which route to choose, the following steps are necessary:
 3.  Structuring the sale:
4.  Financing the sale:
5.  Completing the deal:

If you choose to use assistance, they will guide you through all of
these daunting steps.  Don?t worry!

If you choose to do it yourself:

Selling your business yourself online, you have the ability to utilize
classified-like sites, such as this one:

I hope that I have shed some light on this process.  If you need
further assistance, please do NOT hesitate to request clarification. 
We are willing to do anything to make you a happy customer!  J

Google Answers

Request for Answer Clarification by get_better-ga on 30 Sep 2004 20:05 PDT
Hello there,

I have a couple of clarifications. Your answers are exhaustive and they
cover the areas that I have covered like:
a. I don't want to use a business broker
b. I don't want to use an investment banker

I am looking at some specific steps I can take to 
a. Identify the potential buyers
b. Get the right value for the business
c. Marketing to these potential buyers

Would you be able to shed some light on that?


Clarification of Answer by aliciadenney-ga on 01 Oct 2004 07:19 PDT
Hello Again!
I am going to do my best to shed some light on this.  I wish I would
have known that you had already gone through that process. I had no
idea that this is what you wanted. I apologize, and hope that this
clarification helps you out!
Good.  Marketing is one of the fields in which I do consulting.  

You first have to realize that the dollar figure placed on your
business is practically arbitrarily assigned!  That is to say, what
may be an astronomical figure to one buyer is perfectly reasonable to
another.  We want to hit up that latter group.  The primary way that
you go about doing this: You MUST create the perception of OPPORTUNITY
in your business.  To do this you must market, market, market.  But,
before we go into that, I wanted to give you a list of the types of
buyers that are out there, and why some are better than others.
Type One: The Strategic Buyer. These are the very best Buyers. They
almost always pay cash and buy at a premium. Typically public or very
large private companies, their decision to buy usually revolves around
considerations of economies of scale, new channels of distribution,
new technologies or other integration considerations. To be attractive
to a Strategic Buyer, your company should fit most, if not all, of the
following criteria:
	Sales in excess of $10 million
	Proprietary product or process
	Unique market presence or share
	Synergistic fit with the acquiror
	Suitable management willing to stay
Sometimes a business that does not meet these criteria can be the
target of a "strategic buyer." A good example might be a small
business that an buyer believes could be franchised or expanded into a
chain of similar locations.
Type Two: Sophisticated Buyers. This group of Buyers emerged as a
force when the "merger mania" of the late 80s ended and Buyers began
to recognize the opportunities in the private sector. Lower interest
rates have also spurred the growth of these Buyers by encouraging the
formation of investment groups whose purchases are made using a
"schooled" approach. There are two distinct types of Sophisticated
Buyers and the acquisition criteria they use are as follows:
Investment or holding company
	Revenues from $10 million upwards to $100 million 
	Earnings of $1 million
	Investment of considerable cash or equity
	Pay 3 to 7 times earnings
High Net Worth Individuals
	Revenues from $2 million upwards to $20 million
	Expect 6 figure future earnings
	Expect to leverage a part of the purchase
	Expect the Seller to finance part of the buy
	Pay 3 to 6 times earnings
Sophisticated Buyers sometimes buy companies smaller than the outlined
criteria. A good example of a business attractive to the sophisticated
Buyer is quick printing, a light manufacturing business expandable
into multiple locations through good marketing and solid management.
Type Three: Financial Buyer. By far the largest group of Buyers,
Financial Buyers are the most common Buyer for Main Street and Upper
Main Street businesses. These Buyers tend to focus solely on present
and past earnings and will not typically pay a price based on future
earnings. The Financial Buyer is buying a job and will consider a
price fair if the transaction meets the following criteria:
	A living wage typically commensurate with the initial investment
	A modest return on the cash investment with P/E ratios of 1.5 to 3 times SDCF 
	Seller financing 
	A good fit with their skills and the opportunity to make the business better
Many small businesses are purchased by Financial Buyers.
Type Four: Industry Buyer. The Industry Buyer is almost always the
Buyer of last resort. If you have to sell, the Industry Buyer is
usually the only Buyer you will attract. The difference between the
Industry Buyer and all others Buyers is the value of goodwill:
Industry Buyers won't pay for it. The Industry Buyer typically will
	Liquidation value
	Book value
	Adjusted book value
All too often business owners who are attempting to sell their
business on their own say, "Why not? I know everybody in the
industry." Unfortunately, 99 out of 100 times, a sales to the industry
Buyer means a deeply discounted sale.
Obviously, the quality of buyers appear in descending order above, and
you should ultimately shoot for types one-three, even if you believe
that your business does not meet the stated stipulations.

How do you get types one-three to be interested?  You market your
business to them!  But first, you must come up with a nice, thorough,
appealing business profile:
First, you must assess the POTENTIAL value of your business, and this
daunting task, I regret, is not one that should be tackled alone.  If
you plan on going solo for the rest of the trip, it is CRUCIAL that
you have a professional appraiser do an assessment.  Their word will
have an air of third-party credibility that you simply could not
attain if you were to attach the value to the business yourself.
I found this great excerpt on  this:
?he fair market value of your business is the value it would have to a
prospective buyer - someone whose primary concern is its profit
potential. Determining that potential is a specialized task and one
that calls for the skills of a professional business appraiser. By
investing in an expert appraisal, you can save yourself a great deal
of time, money, and grief. Without it, you run the risk of either
underestimating your business's worth and accepting too low a price
for it - or overestimating its worth - and wasting valuable time
trying to reach an unrealistic goal.
There are full-service firms, as well as individuals, that specialize
in business valuation, appraisal, and consultation services. The
advantage of a full-service firm is that it has the resources and
expertise to properly value all the various components that determine
the worth of your business. it also has access to information on
current appraisal and legislative requirements. Anyone using an
individual appraiser should make certain that the individual is a
member of the American Society of Appraisers.
A good way to find a reliable professional is to obtain referrals from
people who have sold their businesses, or ask your financial adviser.
You will want to retain someone who not only has access to a large
database of comparable sales, but also knows how to analyze that
information correctly as it may relate to your business.
An appraisal that merely cites transactions that appear to resemble
yours will not prove terribly useful; it should integrate data about
comparable sales with information about your business. The end result
should be a comprehensive statement of your business's worth.
An appraiser will need to examine your business's books in detail and
to review financial statements for the last five years, including
balance sheets, income statements, and sources and uses of funds. in
addition, the appraiser may analyze local, national, and worldwide
conditions that affect the business. An appraisal from a full-service
firm may include valuations of real estate, machinery, and equipment.
the entire process may take anywhere from three to eight weeks.
In valuing your business, an appraiser is likely to recast past
financials to determine the business's maximum earning capacity.
Owners of privately held businesses often utilize a wide range of
operating styles, from aggressive to conservative, producing wide
ranges in earnings. Owners and their families may have aggressive
salary plans and equally aggressive retirement and benefit packages.
An experienced appraiser will recast these numbers to reflect more
accurately what a prospective buyer could expect the business to
generate as profits.
Valuing a business is a highly customized rather than a highly
standardized process. After discussions with you, your appraiser will
be able to develop a thorough understanding of your business and the
environment in which it operates.
Numbers will ultimately be analyzed according to well-established
disciplines, but determining those numbers - formulating the
assumptions for the calculations - is a matter of professional
judgment. That includes judgment about the past performance, current
capacity and competitive situation of your business, as well as the
demographic and market trends that will affect its performance.
Finally, a good appraisal should be convincing to you, as well as
indicative of what a potential buyer will pay.
An accurate valuation puts you in an excellent position to negotiate a
sale of your business on the most advantageous terms.?
Once you have had your business appraised, it is time to start
marketing!  The first step in a good marketing campaign is to draw up
a good ?Professional Business Profile,? which should include the
  history and nature of the business 
  financial overview (five years) 
  the business's operations 
  business' management and employees . 
  the competitive situation 
  industry and market expectations 
  business' strategy and projections
Here is a good site that gives you, in detail, what they think should
be included in your ?seller?s book:?
And since you are doing this yourself, as petty as this might sound,
you need to present the report in a way that exudes ?done
professionally.?  If you do not, you are sending the message that your
business is not successful enough to warrant a professionally done
report, or that you do not have the financial means.
I think that it would also be a good idea to include your mission
statement, vision, etc.  Adding these things will make your business
stand out from the textbook profiles potential sellers are so used to
reading.  This is the key.  Stand out.  Be different.  Be
anti-generic, which brings us to the next step.  How to market the
Most pertinent to your needs would be marketing your business on the
Internet and in print, both in trade journals and newspapers.  I
suggest Wall Street Journal, Los Angeles Times, San Diego Union
Tribune, Orange County Register and North County Times, because of
relevancy to the e-market.
Here is an article that gives many cost-effective options for getting
yourself out there.  While this article is meant to help someone
market their business with the intention of keeping it, I also find
these to be cool, unorthodox ways to sell your business.
There is also a great community called Craigslist, on which you can
post whatever you want for free.  It is the BEST online marketplace
ever.  The original is in San Francisco:
I think you  have to pay on that site, but on most of the others, it
is totally free.  Check it out.
Here is a Website that I researched and trust enough to refer you. 
You can post your business on here:
I really hope this clarification has been beneficial.  
Have a wonderful day!
There are no comments at this time.

Important Disclaimer: Answers and comments provided on Google Answers are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. Google does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in answers or comments. Please read carefully the Google Answers Terms of Service.

If you feel that you have found inappropriate content, please let us know by emailing us at with the question ID listed above. Thank you.
Search Google Answers for
Google Answers  

Google Home - Answers FAQ - Terms of Service - Privacy Policy