Drive Business Value and Growth with Online Visibility with Anna Lebedeva SEMrush

Drive Business Value and Growth with Online Visibility with Anna Lebedeva SEMrush

Anna Lebedeva is the Head of Growth Marketing at SEMrush. Her areas of interest are SEO strategies, brand awareness, start-up investment, public relations, and influencers trends. As an author, Anna has been featured in The Next Web, and contributed to Search Engine Journal, Foundr, Business 2 Community, PR Daily, Spin Sucks, and more.

Anna presented at The Exit the importance of online visibility and invest in the appropriate strategies to drive business growth and value to customers. Also, she shared an impressive marketing strategy case study where a dental services company increased its traffic by almost 5,000% and revenue by 100%.

“Even with a budget, it is so difficult to get found in a crowded market, you have limited online space and thousands of companies that will love to take this place and be present”

Mechanism to promote Growth

Marketing is the tool to drive business and promote growth. Companies invest an important part of their gross revenue, between 5% and 20%, on marketing initiatives throughout different channels.

The challenges of a Crowded Market and the Attention Economy

Elements such as limited online space, a large number of competitors, and a new scarce commodity called human attention make the allocation of resources in marketing a real challenge. With the right strategies, businesses can maximize their marketing efforts efficiency and target the proper audience at the right place with the optimal frequency.

Marketing is an Investment, not an Expense

To achieve the greatest return on investment, you must invest wisely by focusing marketing activities for your ideal customers via the right channels.

Customer Context and Efficient Brand Presence

It is vital to find the relevant online environment, understand the needs and search intent of consumers. To achieve this, marketers must have a clear vision about:
• Business type and the limits of the industry
• Search intent of target users
• Channels and sources customers use to find information
• Optimal offer according to intention and behavior

Case Study – UK-based Dental Service

Smileworks, changing their marketing strategy, achieved a revenue growth of 100% and multiplied their customer base becoming the leading dental practice. Their starting point was a 10% of revenue spent in marketing with paid ads with good coverage and leads but from an audience who was not genuinely interested or not ready to pay for their services. The actions they executed can be summarized in:
• Identified the needs of their audience and the relevant keywords with high consumer interest
• Changed the approach with an optimized site with users and search engines in mind to drive intent and get loyal followers
• Created useful content with most commonly asked questions to educate and show their expertise
As a result, Smileworks experienced an unprecedented turnabout in revenue, trust, and visibility, even reducing the advertising spending.

What Buyers are Looking for with Stacy Caprio, Ted Dhanik & Bryon Brewer

What Buyers are Looking for with Stacy Caprio, Ted Dhanik & Bryon Brewer

In this session, you will hear from three buyers who are actively on the hunt.

Panel introductions:

Stacy Caprio

Stacy is the creator of Her.CEO, a website that inspires entrepreneurs and shares website buying and selling experiences of her own and the Her.CEO audience. While still in a 9 to 5 job, Stacy got her start buying websites on Flippa, which is what allowed her to gain financial independence and break free from her corporate job. She now works for herself buying and selling websites as well as managing her current portfolio of sites. Stacy’s perspective is from the website buyer side, and she is happy to answer any questions related to the individual buyer perspective and what others in her position are looking for when purchasing a website.

Ted Dhanik

Ted is a co-founder of engage:BDR, Inc. Ted serves as Chief Executive Officer & Chairman of the Board, overseeing all aspects of engage:BDR’s businesses.
In 2017, Ted took engage:BDR public on an over-subscribed IPO, which has yielded successful acquisitions and more than $50M in capital raised. Prior to engage:BDR, Ted was with MySpace.com from its launch, developing strategic marketing initiatives. Working very closely with founders Chris DeWolfe and Tom Anderson, Ted was responsible for launching the brand in its infancy. Also, Mr. Dhanik innovated the business development practice at LowerMyBills.com in its early stages through acquisition by Experian; he was an integral part of the early development and launch of the consumer lending program at NexTag Corporation, a competitor to LowerMyBills.com and LendingTree at the time.
Mr. Dhanik has worked for or been a partner at several other companies in the areas of business development, sales, and key managerial positions. Ted sits on boards or advises other tech startups and is an active mentor to Los Angeles-based startups.
Ted is passionate about remaining a thought-leader in the digital advertising industry. His writings are regularly published in publications including Ad Age, Forbes, Fast Company, AdExchanger, VentureBeat, and several other top-tier U.S. publications. He contributes to the development of industry standards and positive change, sitting on IAB committees including Anti-fraud Workgroup, Anti-malware Workgroup, Traffic of Good Intent Task Force, Programmatic Counsel, Digital Video Committee, Mobile Advertising Committee and Performance Marketing Committee.

Bryon Brewer

Bryon is the CEO/Owner of Human Proof Designs. His company has been helping entrepreneurs start and grow online businesses since 2013. Bryon started his career in technology twenty years ago as a development engineer and spent many years providing technology consulting services for large U.S. based firms such as Microsoft, Accenture, Berkshire Hathaway, and Exxon. He started his first consulting firm 12 years ago and has since founded several online businesses. Bryon currently manages a remote team of 60+ professionals across multiple countries building and growing online businesses.

Q: Tell us what it is like to take a company public?

Ted: It’s very exciting. I’m a startup guy and going public means I am no longer a startup guy.

Q: What was the first thing you bought and did it work out for you?

Stacy: Unfortunately, the first thing I bought was not a success. Due Diligence is key. Make sure you get access to everything you can to verify it. Cross you i’s and dot your t’s.

Q: What are you looking to acquire and why that asset?

Bryon: Looking for opportunities where the site can be improved. Where can I save costs and where are there revenue opportunities that are being missed. It’s about finding those that have upside and can be improved.

Ted: I don’t want to inherit someone else’s problems. Accountability is key from the seller and looking for single points of failure and bottlenecks. Currently looking for Apps and websites with traffic either with or without ads.

Q: What do you want to acquire next?

Stacy: I’m looking for something that has a very strong brand. Not reliant on one source of traffic. For example, the website is reliant on Google search so if there is a Google update I want a lot of direct traffic so it won’t be as adversely affected.

Bryon: No blackhat practices. Give a lot of the information up front as we are buying 5 – 10 sites a month so we don’t have time for a lot of back and forth.

Ted: Just to add to that, there is this holy grail of organic traffic that doesn’t exist. A lot of the big sites out there it’s about content arbitrage and we love it. As long as you are buying traffic from the right places. Your only limitations are capital. We can grow a business fast just based on what media we are buying. That is where we think a business can grow. Being able to really demonstrate where your traffic is coming from. Demonstrate you know how to buy media.

Q: What do you think about conduct and how a seller should conduct themselves?

Bryon: Developing a personal relationship and get to know the owner. Develop a connection with the seller. Be realistic about what the market is saying it will sell for. A buyer will not pay 40x if they can only sell if for 30x in three months’ time.

Stacy: I agree with Brian and how the market sets the pricing. You do have to be able to sell at the same rate. Responsiveness is key as a seller.

Q: Is the expectation that founder and/or owners stick around?

Ted: I don’t want to buy anything where someone leaves. I’m not buying commodities I’m buying businesses that require people to continue to run them until knowledge transfer has happened. We set that tone from day one.

Q: Are you structuring earnouts?

Bryon: Typically if the deal is more than $20k we have some form of earnout that guarantees successful transfer or training that the seller has to participate in.

Ted: Just one thing to be careful of projections perspective because that is what your earnout is going to based on.

Q: What does a good deal look like?

Ted: I think it depends. I’m not in the business of repairing things. We tend to take things that are marginally losing money and optimize if through resources being removed. The bottom line is that our valuation is based on a multiple of EBITDA. We base it on that.

Stacy: When you can see something in the site that the current owner doesn’t. If you buy a site for 20x multiple, I look to earn that back in 10 months.

Bryon: The biggest one is financials. Lots of businesses we encounter are not tracking financials correctly. Likelihood is that if you don’t have clean financials, we will get it a discount.

Ted: Get a real accounting firm involved. These are tech businesses, so all your development can be capitalized and they go on your balance sheet and removed from your P&L. Now you are profitable. All the money you spent building the site is now on the balance sheet and removed from your expenses and that could be the difference between being profitable and a valuation standpoint. That is a big win I normally find.

Understanding Due Diligence with Brian Diener from Centurica

Understanding Due Diligence with Brian Diener from Centurica

Brian Diener is the Director of Operations at Centurica. He has worked on over $50 million dollars in deals with buyers and sellers. Strong knowledge of Analytics, paid search and is a search engine optimization specialist. Experience operating and managing a portfolio of eCommerce and content websites.

“The goal of Due Diligence is to verify all of the information that has been presented. The offers that a buyer has made on a business is based on what has been claimed. During due diligence, the aim is to verify all of that information”.

In Brain’s talk, you will hear about what to expect as a Seller and he will walk you through a sample Due Diligence process.

Due Diligence takes place after the LOI has been signed by the Buyer and right up to the time of closing. This timeline can range from 1 – 2 weeks on the shorter side right up to 6 – 8 months on longer deals.

What is the purpose of Due Diligence?

  1. Verify Claims
  2. Identify Potential Risks
  3. Assess Opportunity

What’s involved in Diligence?

Typically it is broken down into a few key stages:

  1. Kickoff / Requests
  2. Financial Verification
  3. Operations Review
  4. Sales/Marketing Assessment
  5. Transition Planning
  6. Growth Plan
  7. Closing

There will be a lot of people involved in the process and it’s critical to keep it organized and start with a call between the buyer and seller. This sets the right expectations going forward.

“One thing that kills due diligence is when a buyer is send over an email every three hours. Keeping it all organized will ensure you don’t miss anything and move through the steps in a methodical process”

Key Tasks

  1. Confirm P&L data
  2. Show key financial trends
  3. Explain operations by task and role
  4. Breakdown key sales and marketing channels

What tools are used for Due Diligence?

There are hundreds of tools out there to help perform due diligence. Here is a link to a list of 60 tools that Centurica use for all of their DD clients.

Further to this, it’s really important to realise that there are still human interactions, people selling and people buying. A lot of times (more often than not) the potential buyer has not even purchased the product from the company. Often they have never been to the website and signed up for the email newsletter, talked to customer support, interviewed any of the employees. Tools are critical, but the human side of due diligence is more valuable than any tool.

Here is a link to a list of 60 tools that Centurica use for all of their DD clients. It’s really important to realise that there are still human interactions, people selling and people buying. A lot of times (more often than not) the potential buyer has not even purchased the product from the company. Often they have never been to the website and signed up for the email newsletter, talked to customer support, interviewed any of the employees. Tools are critical, but the human side of due diligence is more valuable than any tool.

Top 5 Due Diligence Issues

It is very rare that you get through a diligence process where no issues have come up. If nothing has come up, the due diligence process most likely has not been digging deep enough. All small businesses have issues that are potential risks. Here are the top 5 issues Centurica see when

1. Lack of bookkeeping/accounting

There are so many million dollar businesses that don’t use any accounting software. Xero does a fantastic job of this. Categorisation and verifiable transaction items is super important. If you have more than business make sure they are not commingled and it’s clear. Keep things clean for each business makes the sales process much easier. If you can hire a bookkeeper and let the experts take care of it.

2. Undisclosed violations or warnings

A lot if not most businesses have issues. This is ok. The issue arises when you are not forthcoming and do not talk about it with the buyer. If you get three weeks into the dd process and the buyer uncovers an issue, the buyer will start wondering what else you have haven’t told them about. Make sure people are aware of these issues so the deal doesn’t fall over at the 11th hour.

3. Transferability Issues

Some accounts with supplies can be difficult to transfer so make sure you have this in order being going to market.

4. Legal / tax issues

Make sure there are no outstanding tax issues that will roll over to the new owner. Work through this with the seller. Ensure taxes are registered and properly collecting taxes where you should be. Always check for trademarks. Some factories overseas have started to trademark American brand names and register a trademark overseas in China. If you are selling and you are an established brand Centric recommend doing a search overseas and registering trademarks in Europe and anywhere else you think you might trade in the future.

5. Loss of trust

This is the most common due diligence issue. All of this can be resolved by being upfront and transparent with the buyer. As soon as this is gone, it is the number one deal killer. You very rarely recover from this.

Due Diligence Tips

  1. Let someone else represent your interest
  2. Maintain open communication and transparency
  3. Prepare for potential issues and questions
  4. Share both positive and negative experiences
  5. Provide operational guidance and support

Resources

For a more indepth checklist vist this post 
Brain’s tools list
Ecommerce Crew Podcast 274 How Due Diligence Helps Sell Your Business

Deal Structures and Financing with Olivia Kim from Guidant Financial

Deal Structures and Financing with Olivia Kim from Guidant Financial

Olivia Kim is a small business financing expert and has now been at Guidant Financial for 5 years. She has led her External Financing team for a majority of that time and primarily specializes in consulting clients on SBA loans when it comes to business financing solutions. She has successfully helped numerous clients get funded through SBA, with loan amounts ranging from as low as $50,000 to as high as $3 Million, so she knows a thing or two about this stuff! Today, she will go over what sellers can expect if they have buyers going through this process.

Quote: “Tax returns are key. I can not emphasize this enough.”

Who is Guidant Financial?

What is an SBA loan and what are the rules around SBA loans?

SBA loans are small business loans that are guaranteed by the Small Business Administration. They are government backed product so there are a lot of rules and regulations.

SBA Rules

• Must be U.S. based business
• Loan range is $25K – $5m
• Business cannot be passive

Borrower Rules

• Borrowers must bring in a minimum of 10% Equity Injection
• Borrower must be a U.S. Citizen, or have a green card
• Borrower cannot have caused loss to the government

By injecting a minimum of 10% cash into the business it shows lenders that the borrower is committed by having some skin in the game.

What are the SBA benefits for Sellers?

• Borrowers must meet certain standards to qualify for the SBA loan. This saves the seller from wasting time with unqualified borrowers.
• The application process doesn’t require much initial work from the seller.
• Fees associated with the SBA loan is the buyer’s responsibility.
• Seller gets paid upfront for purchase price.

How to pre-qualify your business for an SBA loan?

There is great value to getting an SBA pre-qualification letter. Highly recommend this.

Pre-qualifying Your Business

• Getting a Pre-Qualification letter from a lender can increase chances of selling your business.
• Lenders will need financial information to issue a Pre-Qual letter. Tax Returns are key, or Profit & Loss statements, Balance Sheets, and etc.
• Getting a Pre-Qual letter doesn’t mean an automatic approval. The buyer also needs to look good and qualitfy.
• You can go the extra mile and get a Certified Appraisal to get an accurate reading of what your business is worth.

It’s important to note that getting a pre-qualification letter doesn’t automatically mean that the deal is done, but it can really help speed up the process.

Common Questions

What is a typical deal structure?

For business acquisitions, the average Equity Injection the Buyer is responsible for is 20%. The maximum loan amount is $5m.

SBA are typically 10 year terms loans.

What are other important criteria to get a loan approved?

• Access to financial information on the business. Tax Returns are key.
• The business must have adequate historical cash flow, and no signs of significant losses year over year.
• Satisfactory personal credit score & histories for all guarantors of the loan – this being the buyer(s).
• No recent bankruptcies, foreclosures, or misdemeanors & felony charges.

Quote “No lender is going to go in blind to approve a loan without seeing how the business itself is doing.”

SBA are a very powerful tool for both buyers and sellers. It helps buyers achieve their dreams and sellers move forward with their next business venture.

If you would like to find out more about SBA loans and connect with Olivia you can do so using the details below:

Connect with us at:

[email protected]
guidantfinancial.com
888-472-4455

Buyer Insights with Blake Hutchison (Flippa CEO)

Buyer Insights with Blake Hutchison (Flippa CEO)

Blake Hutchison is an accomplished entrepreneur and the CEO of Flippa.com. Prior to Flippa Blake was the general manager and chief revenue officer of Luxury Escapes and head of strategic partnerships at Xero. Blake was also the founder of GOOD44, a venture capital-backed specialty food marketplace helping small business owners target a new customer base.

50,000 online businesses have listed with Flippa in the trailing 12 months. Over 60,000 buyers. This is a dynamic and growing space.

BUYER INSIGHT #1 Content sites are, currently, king.

Content-based websites are hot. 51% of buyers, surveyed by Flippa, recurrently hunting for websites monetized by ads and affiliates. The benefit of these business models is that there is less volatile/seasonal revenue bass, less intensive and there is simple revenue-generating add ons readily available.

BUYER INSIGHT #2 – Experience

Buyers are experienced. Sellers are less so. 55% of buyers actively searching Flippa.com own 3 or more websites, whilst for most sellers, the experience of selling will be there first.

BUYER INSIGHT #3- Ready to purchase

Our buyer community is highly active and ready to purchase. 61% are in the market now and want to acquire within the next 12 months. There’s never been a better time to sell.

BUYER INSIGHT #4 – Deal terms

Buyers often want to offset some of the risk of the deal to the seller. 15% of buyers want to acquire on Seller Financing terms or a combination of cash + debt. The debt to be held with the seller. Seller financing provides cash flow and risk benefits to the buyer and allows buyers to get access to bigger deals without having to look to institutional/bank financing.

So when selling, being flexible and having knowledge in how to structure has never been more important.

BUYER INSIGHT #5- Distressed inventory.

78% buyers are looking for businesses that are somewhat underperforming. For buyers creating operational efficiency is a path to growth.

BUYER INSIGHT #6 Strategic vs Lifestyle

There is a 50/50 split for buyers looking to acquire for personal vs business/strategic reasons.