6 Essential Software Upgrades When Buying & Selling Websites

6 Essential Software Upgrades When Buying & Selling Websites

These days, many of the most popular companies across the globe are entirely web-based, meaning all of their products and services are offered over the internet. Like real estate in the real world, websites are now thought of as investment opportunities with the potential for their monetary worth to grow substantially over time.

The marketplace for website transactions is constantly growing, with both buyers and sellers looking to get in on the action. No matter what side of the trade you are involved with, you will want to be sure that the website up for sale is a valuable property with strong technology behind it.

In this article, we’ll discuss several software categories that matter most when buying or selling websites. Upgrading to new tools will show a commitment to growth and stability.

1. Cloud Hosting and Storage

software upgrades chart for cloud hosting plansImage courtesy of Hello2Hosting.com

Today’s website investor is only interested in properties that are hosted in the cloud. They don’t want to have to worry about setting up and maintaining their own servers or managing a data center. With the cloud, those responsibilities are outsourced to a hosting provider and paid for at monthly rates.

To show your website in its best light, it needs to be optimized for speed and performance. If not, the value of the website can sink due to the fact that visitors are unlikely to spend much time or money when pages don’t load reliably.

Different cloud hosts specialize in different types of websites. If your property is primarily a blogging enterprise, then it makes sense to use a platform like Kinsta, which was specifically designed to manage the WordPress content management system and provides support for migrating WordPress content across hosting solutions.

The bottom line is that, depending on your present hosting arrangement, an upgrade in this area may significantly drive the value of your website up.

2. SEO Optimization Software

 

seo software upgrades lifecycle chartImage Courtesy of TemplateTrip.com

Website buyers want assurance that the property they are investing in has a good reputation and looks strong in Google’s eyes. This is what makes search engine optimization (SEO) so critical before and during website sales. Though not cheap, options like a subscription to Ahrefs or SEMRush should be mandatory.

Poor or inattentive SEO will leave the website floundering on the second or third (or worse) page of search rankings, meaning fewer visitors will find it and – all together now – driving down the value. A new website owner may feel forced to spend more on advertising to try to attract users and that expense is coming out of the sale price. Strong SEO metrics does the exact opposite, acting almost like free marketing and making the site a more valuable asset.

In the early days of the internet, improving SEO was as simple as researching good keywords in the content for search engines to index. With the considerably stiffer competition these days, more expertise is required and upgrading to a pricey keyword tool can help reduce the time and increase the effectiveness of the process.

3. Marketing Tools

During negotiations of a website sale, often the most critical factor is the marketing performance and related metrics. Buyers want to see strong return on investment (ROI) and conversion rates, which track how often the content results in a desired action by a customer or visitor – we’re talking about clicks, purchases, or email list signups.

Third party tools like Sumo can help to strengthen marketing efforts and make websites more appealing in transactions. It’s important to show growth, as investors want to have confidence that any website they purchase is on an upward trend rather than flat-lining or dropping.

Website investors want to see modern, proactive strategies in place when it comes to marketing. Active email campaigns (which need their own tools to be done properly – MailChimp and Mailerlite are leading solutions), a strong social media presence, and content that includes video can make a property more valuable as it points to growth rather than decline.

4. Cybersecurity: Firewall, VPN, and Security Suite 

cybersecurity software upgrades to protect your business
Image Courtesy of LehighValleyChamber.org

Cybersecurity is no longer an esoteric topic reserved for high level computer science classes at the local university. The incredible growth rate of hacking attempts and successes has created an environment that forces any website owner to make security a priority or suffer the consequences. The bad news is that there isn’t much demand for a site that’s infected with viruses, malware, or has recently suffered a data breach.

The good news is that you don’t have to be a cybersecurity expert to put into place strategies that incorporate effective security software that make it harder for hackers to compromise the website. The three critical areas to pay attention to are firewalls, a virtual private network (VPN), and an anti-virus/anti-malware security suite. And don’t forget to install new updates as soon as they become available. The following is a quick review in case you’re not familiar with these security software tools.

Firewall: A firewall sets up a sort of perimeter defense that separates trusted from unknown traffic and filters out the latter. Actually, it does a lot more than that but here’s a quick rundown on why you want one.

Virtual Private Network: If the website collects or stores any sort of private data (and most do), recent GDPR regulations related to privacy make choosing a VPN any time you connect to the front or backend almost mandatory. The bottom line is that the encryption and IP address cloaking are an excellent defense against the rash of continuing data breaches.

Security Suite: There are a handful of effective choices in this part of the online security industry, any of which provide solid anti-virus and anti-malware protection. To choose not to use one is virtual website suicide. With the average small business site being probed by hackers 44 times per day, an infection is almost certain if you don’t take this precaution.

5. Customer Service Software 

Acquiring new customers is a great way to grow an online business, but unless you keep those users happy, you will not build a valuable property. The goal should always be to retain current customers and find ways to boost their activity on your website. Poor customer service will hurt a company’s reputation. Nobody wants to buy into a bad service experience.

When it comes to online stores and service providers, customers expect fast, accurate answers to any questions or issues they encounter. A tool like Intercom helps to funnel all customer communication into a single stream so that you can manage it from a central location. Intercom offers real-time chat solutions that can be easily integrated with your existing platform.

6. Activity Tracking Tools

When a website if first put up for sale, potential buyers want to see fundamental data about past performance. If key metrics like unique visitors per month are not available, then it is very unlikely that a deal will be done. So before trying to sell any online properties, make sure to have an activity tracking solution in place. The further back it goes, the better.

Third-party tools like Crazy Egg take care of most of the grunt work. You simply add a few lines of code to your website and let it track all of your visitor activity, making it one of the easiest software upgrades on this list. Crazy Egg also leverages machine learning algorithms to automatically make suggestions on how to improve your website performance and retain more users.

The Bottom Line: Essential Software Upgrades

Websites can be great investment opportunities. It’s like a store that’s open for business 24/7/365. But in order to take full advantage of this business strategy, you have to understand what drives the price of a website up or down. As we’ve just discussed, some factors include marketing performance, SEO metrics, and customer service reputation.

Like a house flipper, you want to seek out opportunities to boost a website’s value in a hurry. Upgrading the software behind a website can prove to potential buyers that there are significant growth opportunities. You don’t need to find the next Amazon or Netflix in order to make a nice profit on a website sale; you simply need to identify a property with high potential and strong marketing fundamentals.

 

Dan Fries is a freelance writer and full stack Rust developer. He looks for convergence in technology trends, with specific interests in cybersecurity, micro mobility, and smart cities. Dan enjoys snowboarding and is based in Hong Kong with his pet beagle, Teddy. His website is danfries.net.
Risk vs Reward of Buying Web Properties on Flippa

Risk vs Reward of Buying Web Properties on Flippa

When the average person thinks about building wealth they often follow what they’re taught in school and what their peers or family are doing with finances.

The majority of the time that means go to school, get a well paying job, save money, invest in stocks, invest in mutual funds, and retire one day.

This is a very well trotted path and if you’re interested in having an average amount of “wealth,” that is the safest path ahead.

However, if you want to build substantial amounts of wealth giving you and your family financial freedom, you will need to move off of the beaten path.

You will need to get comfortable with higher levels of risk, begin to understand the importance of cash flow, and do what you can to cover your expense with income generating assets.

I have never met a truly wealthy person that reached their financial independence by not taking risks.

All that being said, taking calculated risks are a healthy middle ground for smart investors looking for alternative asset classes.

Accumulating as much data as possible to support your investment into a newer asset class is the strongest approach to measure your risk.

With web properties like e-commerce, content sites, mobile apps, domains, SaaS businesses, and many others available on the Flippa marketplace now being considered a bona fide asset class for buyers and investors available data is in abundance.

This makes calculated risks easier.

Before I allocate any capital to a new asset, I always weigh the costs and benefits for both long-term and short-term allocation. These are the first three (of many) questions I ask myself before finalizing a deal for a web property on Flippa:

  1. How long until I reach 50% return on my investment with this web property? How long till 100%?
  2. If the web property fails immediately how quickly can my portfolio make up for the loss?
  3. What are additional revenue streams I can add to de-risk this web property?

By answering those questions and a few others I’ve weighed the rough costs vs benefits of NOT buying a quality web property at a fair monthly multiple of revenue. Asking basic questions like those builds confidence, helps with your mindset, and significantly de-risks the investment overall.

The majority of the time while doing my due diligence, I operate in worst case scenario. Dozens of other buyers and seasoned investors I’ve met over the years in this space do the same.

To give a rough average of the returns that can come from acquiring web properties, over the last 3 years, I’ve seen more than half of the web properties in portfolio yield a 100% return on investment (ROI) within 12 months of buying them, after expenses.

That level of return on investment is only available through taking risks on a newer asset class that other investors aren’t as familiar or comfortable with.

This would be considered investing off the beaten path.

Following what everyone else is doing will give you the returns everyone else is getting.

Taking calculated risks on web properties on Flippa using large amounts of public data has proven time and time again to outperform the majority of assets I’ve ever owned.

Investors I know and respect all take risks on alternative asset classes multiple times per year to test the waters with higher returns.

Fortunately, it’s still extremely early in the landscape of buying web properties and with Flippa you have the ability to freely communicate with sellers directly.

If you are searching for a way to change the trajectory of your life and accumulate true wealth, take a risk on by acquiring a small web property on Flippa to test the waters.

Spread your allocation out across multiple niches and business types, and make sure you’re collecting as much data as possible to de-risk your investment.

Also, be sure to have fun with the process.


Author bio: Steve McGarry

Steve is host of The Sound Money Podcast and spends most of my days talking about blockchain startups, dApps, coffee, and influencer marketing.

 

Buy and Sell Websites – I Spent $35,700 on Sites – What Did I Learn?

Buy and Sell Websites – I Spent $35,700 on Sites – What Did I Learn?

Authour bio: Stacy Caprio

Stacy is an entrepreneur who has bought and sold several profitable websites, and learned a lot of lessons along the way. Her background is in online marketing and one of her favorite things in the world is helping websites and companies grow.


 

I was trapped.Or at least I felt trapped. Anxious. Smothered.

Sitting in a spacious white cubicle, in a beautiful office complex, inside a building filled with free coffee and tea, sunlight streaming in nearby windows and friendly coworkers stopping by to chat.

I may have looked free to any onlooker, but inside I knew the truth.

There was an invisible chain hooking me to my cubicle, 5 days a week, 8:30am to 5:30pm, and it didn’t matter how much value I provided, or how much work I did, all that mattered was that I sit in my chair during that entire time every day, every week, and every year.

If I did not stay seated that entire time, I would not have any money to live on.

I could not even walk outside, other than on my lunch break, without attracting unwanted attention.

All I could think about was how to break free, but nothing I tried was working.

One of my favorite past-times was, and still is, reading income-report blogs and how other people make money online. One day I was reading a blog post about website investing, and it clicked.

I thought, why not?

I had already tried to start several sites on my own but none were making any money. I wanted to try buying one that was already working and then build on it.

My thought process was, let’s give it a try and see if we can build on an already successful and profitable site and learn to make an income like all my favorite online bloggers are already doing.

I’ll take you through the lessons I’ve learned from buying 4 sites for a total of $35,700, all purchased through Flippa.

My current working view, in large part thanks to Flippa, I’m no longer inside of a fluorescently-lit cubicle, instead able to work outside on my balcony in the heart of Chicago.

 

Lessons Learned From Buying Websites 

 

Good judgment and experience can come from making mistakes yourself, which I have done, and is where my experience comes from.

It can also come from reading about other’s mistakes, and avoiding them, and then reading about other’s successes, and emulating them.

My hope is that you can learn from my failures, but also my successes, in website buying and selling.

 

Avoid my Mistakes: How I Lost Money Buying Sites

 

1. Never trust data unless you verify it

 

I had just bought my first site and I was more excited than I could remember since Christmas morning when I was a little kid.

The seller had listed the site as making $350/ month, and I had paid him only $1,300 for it.

Of course, it was too good to be true.

If a site is really making $350/month, no one in their right mind would ever sell it for only $1,300, so that should have been red flag number one for me right there.

At a minimum, a site making $350 profit a month would be going for 20X $350, around $7,000 or more, depending on what the site owner was looking for.

The mistake I made buying this site was not only ignoring the price red flag, but going into the deal with blind faith and trust without even attempting to verify any analytics or revenue. 

 

Flippa has a great Google Analytics traffic verification feature and a great Google Adsense revenue verification feature, and after that first purchase, I now never even consider a looking at a site unless the seller has enabled both forms of Flippa verification.

Additionally, I now always request access to the site’s Google Analytics as well as proof of income including video screenshares and income screenshots.

I also use something I call the common sense test.

In the common sense test I combine Google Analytics, average RPMs and conversion rates to determine what the income numbers should be if the site owner is telling the truth. Then I compare the common sense estimates to the numbers the site owner provides and see if they are in the same ballpark.

Learn from my blind trust mistake and always verify traffic and revenue before purchasing a site.

Not everyone is an honest fairy God-mother and some people will try to cheat you out of your money.

 

2. Don’t buy out of desperation

 

When I was ready to buy my second website, I was desperate for another income stream.

My life may have looked nice and comfortable from the outside, but I was anxious and desperate to start having more freedom.

This desperation led me to spend a lot of money on my second site.

I had a lot of confidence because I had verified the site’s revenue, the lesson I learned from failed site purchase #1.

My newfound revenue-verification confidence combined with my desperation lead me to spend a lot of money, $10K, on a high-revenue site without really thinking about if the business model was sustainable.

The first few months were amazing and I was even able to more than double the monthly revenue. I was ecstatic, to say the least.

My happiness was short-lived.

The site traffic plummeted when the “fad-site” I had bought turned out to be a short term trend based on an app, something I could easily have spotted if I had been buying out of a calm, measured mindset instead of my overly confident and desperate mindset, possibly the worst mindset to make any decision in life with.

Learn from my lesson and never buy out of desperation. Or worse, desperation combined with over-confidence.

 

Copy My Successes: How I Made Money Buying Sites

 

3. Test Ad Networks & Make Partnerships

 

My third site was my first success. You didn’t think I’d give up after two expensive failures, did you?

I bought it for less than what I’d paid for site #2, because I was still wary that anything could happen.

It was a great deal I found on Flippa with a price of only 20X the monthly profit.

Quickly I was able to test different ad networks and monetization methods until I found ones that were making around double the original.

Then an ad network rep reached out to me and wanted to advertise on the site for a flat monthly fee that was more than double what I had already doubled the site to, so of course I accepted.

For the next few months revenue was 4X what I had bought the site for, since I was still running the better ad network and had an ad partnership that was paying me a flat fee monthly.

This had worked out better than I could have ever imagined, and I made back what I had paid within 10 months, and was making pure profit each month after that.

 

4. Keep going when you find something that works

 

My fourth site I used all the principles I learned from my previous mistakes and successes.

I verified the analytics and revenue before buying.

I was not completely desperate, not overly-confident, and used as much common sense as I could, all keys to making a well-informed and level-headed purchase.

I used the ad networks I knew already worked and leveraged my ad partnerships.

Using these approaches, I was able to buy a second successful site, my fourth website purchase total, from Flippa, and build on its success.

This site I also made back the purchase price within 10 months and have been able to grow revenue substantially since then.

The key on my fourth site was buying an online site that was already successful and that I could build on by producing more content.

I worked with adding to what it already had and was able to grow the revenue that way.

The lesson to learn here is you don’t have to start from scratch if you’re looking to own a profitable business or website. You can buy something that is already working and then build on it.

Even more important, once you find something that is already working, run with it and help it grow. To do this, you can produce more content and help it grow in the direction it is already growing successfully to increase profit and revenue over the long-term.  

Hopefully this website buying and selling article helps you avoid some of the mistakes I’ve personally made as well as helps you emulate some of the successes I’ve also been able to have.

 

I am forever grateful to Flippa for being the catalyst that helped me transition from being the girl at the beginning of this article who felt trapped and chained in her cubicle, to the girl I am now, living in my dream apartment overlooking the bean and Lake Michigan in Chicago, with the freedom to set my own hours and run outside by the lake any time of any day without feeling even a little bit guilty.

Let us know your own website buying and selling mistakes and successes in the comments below.

The 10 Best Shopify Apps for 2019

The 10 Best Shopify Apps for 2019

Author bio – Whitney Blankenship 

Content Marketing Manager for Omnisend. When not writing awesome content, Whitney is reading up on the latest in digital marketing, eCommerce, and social media trends. Obsessed with pop culture, art, and metal. Powered by coffee. Fastest Googler in the West. 


 

If you are in the process of growing your eCommerce business, then you are probably turning to Shopify for assistance.

There are no two ways about the fact that Shopify can help you achieve great results in a lesser amount of time.

It’s clear to see why. Shopify negates all the hassle involved in launching an online store and automates the whole process — from sales to shipping to marketing activities.  

Many Shopify merchants build up their stores to sell them and start over with a new one. With how easy Shopify makes creating a store, once an entrepreneur knows the right formula, this can be a profitable way to build and sell businesses.

I am sure you have devised some strategy. That said, along with your own marketing and sales strategy, you can get more bang for your business if you use the right  Shopify tools and apps.

And that’s why today we have rounded up some of the best Shopify apps to help you grow and sell your eCommerce store.

 

Omnisend grabs the first position in this list, and rightly so. But don’t take our word for it, Omnisend is indeed ranked as the number one email marketing automation platform on the Shopify App Store.

However, it is not your regular email marketing tool. Instead, it is an omnichannel marketing automation platform that helps you integrate all your marketing functions under one single roof.

Omnisend offers other prominent features, such as:

  • Brings you closer to your customers through channels such as mail, SMS messages, web push notifications, Facebook Messenger, and more
  • Helps you determine your customers’ behavior and send personalized messages that automatically react to that behavior
  • Sends laser-targeted automated messages which drive more sales

 

All in all, you can start selling on your eCommerce store with Omnisend without worrying over daily tasks like messaging, email capture, etc., as this Shopify App does everything on its own.

Pricing Details: For starters, you can try out Omnisend’s 14 days trial package to see whether it fulfills your specifications or not. For basic email marketing, Omnisend offers a free plan that lets you send up to 15,000 emails per month. After that, their paid plans start off at only $16 per month. 

If you are looking for an acclaimed printing and warehousing Shopify App, Printiful is just the app you need.

This Shopify app not only offers easy and customized drop shipping services but also allows you to track every step of your order delivery.

One of the greatest things about Printiful is that they don’t take any credit for their warehousing services. The parcel will reach your customer with your brand name, which makes it look like you carried out the warehousing process in-house

Just like Omnisend, they also integrate with plenty of famous eCommerce platforms other than Shopify, including Weebly, Woo Commerce, Ecwid, BigCommerce, and more.

Printiful is especially a favorite among eCommerce store owners for shipping merchandise such as tote bags, cups, t-shirts, and basically every other item that they avoid storing on their own.

Pricing Details: This Shopify app doesn’t have a rigid pricing policy. The pricing depends solely on your product.  

 

I hope you know that one happy customer spreads the word around to at least nine more people. So, if you are not leveraging these referrals, then you are missing out on a huge number of sales

And this is where ReferralCandy comes into the game.

If you want to give a nudge to your customers to refer your brand to their friends by giving them incentives, then ReferralCandy has you covered. This Shopify App allows you to choose a reward of your choice so as so gain unlimited referrals.

Some of its most important features include automatic reward delivery to the customers, regular referral reminders, a dashboard that allows you to keep track of your referrals, and so forth.

Pricing Details: ReferralCandy offers a generous trial plan of up to 30-days, which can be canceled anytime. The paid plans start at $49 per month and range up to $3999 per month (billed annually).

 

When it comes to driving traction to your eCommerce store, you have to work on your search engine optimization (SEO) strategy.

But how do you start building your SEO plan?

Go to the app store and install “SEO Manager.” With this Shopify App, you don’t have to worry about tedious tasks such as keyword research, advanced meta-setting, etc. SEO Manager will automatically find a way to make your eCommerce store rank higher in search engines. It does the hard part on its own, and you only have to supervise whether everything is on track or not.

Some of the most attractive features include:

  • Offers comprehensive help documents to navigate easily through the app
  • Gives real-time feedback pertaining to the success or failure of your eCommerce store and your SEO efforts
  • Advanced and intelligent analytics and reports
  • Runs a mobile-friendly test to ensure that your eCommerce store is optimized for mobile phones

 

Pricing Details:

SEO Manager is priced at $20 per month, but you can initially try out their 7-day free trial.

 

Collecting positive reviews is one of the most essential parts of your sales process — especially if you want to shorten your sales funnel.

In fact, statistics suggest that 72% of consumers trust online reviews as much as personal recommendations from friends, and 90% of consumers claim that positive online reviews excessively influence their buying decisions. Thus, it makes no sense to not leverage reviews and testimonials.   

Yotpo Reviews lets you easily integrate your customers’ reviews to your Shopify store. Now when your prospects visit your eCommerce store, they feel more assured before buying your product as your reviews can vouch for its credibility.  

Key features to look out for:

  • Automatically collect ratings, site reviews, and product photos using the review widget
  • Showcase ratings, reviews, and Q&A throughout your website along with all your social media channels.
  • Easy to set up and no coding hassle.

 

Pricing Details:

If you are a beginner, you can use Yotpo’s base version, which is completely free. However, if you want to access more advanced features including coupons, carousels, and up-selling options, you can opt for the paid plans that start at $29 per month.

If you are indulging your customers through social media engagement, then I am sure you wish you could keep an eye on all your social media accounts at once. Social Media Stream fulfills this wish!

With this Shopify App, you can now view your posts from various social media platforms including Facebook, Twitter, Instagram, Youtube, Pinterest, and Tumblr onto one widget. This easy to set-up app is especially helpful if you are keen on growing your social media followers and make your website more dynamic at the same time.

Pricing Details: While this app offers great services, but the greatest thing about it is that it is completely free of cost. Yes, really!

Has it ever happened to you that you liked a pair of jeans so much that you decide to buy it right away? Reeling with excitement, you start to fill the signup form to finally place the order. But the signup form is too lengthy, so you exit the web page and start browsing for better options.

Don’t let your prospects face the same issues for they won’t think twice before abandoning your website.

The easier you make it for customers to create accounts, the better will be your ROI.

That’s why we highly recommend you integrate One-Click Social Login.

This Shopify App lets your customers create accounts by simply logging in with their existing social media account details. Apart from simplifying your login process, it also allows you to be socially connected with your customers. Two birds, one stone!

 

Moreover, One Click Social Login integrates with Facebook, Twitter, LinkedIn, Pinterest, Amazon, and many more. You also get access to an admin panel to keep track of customer signup activities.

 

Pricing Details:

 

One Click Social Login’s services start at $4.99 per month. However, if you want premium features such additional customizations and the ability to track your customer’s social profile, then you will have to upgrade to higher packages.

8. Smile.io

Persuading people to make a purchase for the first time is hard enough – retaining them for a longer period of time makes salespeople break out in a sweat.

That said, customer retention isn’t as difficult if you do it right away and using the right tools.  And this is where Smile.io enters the picture. This popular Shopify app integrates an attractive loyalty program to your eCommerce store to help you retain your customers.

Key features include:

  • Integrates various attractive and engaging programs with your Shopify store, such as loyalty points, referral, and VIP programs
  • Allows you to customize your programs as per your preferences

 

Pricing Details:

The free plan is sufficient if you want to run a simple program, while the paid packages, starting from $49 per month, offer customization options, robust analytics, and more.

9. Oberlo

Recent years have seen a rise in people getting involved in the dropshipping business – in other words, selling other companies’ products to your customers. If you are also planning to start a dropshipping business with Shopify, then you should definitely try out Oberlo.

This popular Shopify app assists you in determining the items that are best suited for your business, add them to your eCommerce store, and start selling without any hassle.

Key features include:

  • Helps you keep your prices and inventory up-to-date
  • Automatically starts the shipping process as soon as you confirm an order
  • Allows you to track every step of your shipping process

 

Pricing Details:

You can try out Oberlo’s free plan that supports up to 50 orders per month. Paid plans, with more capacity and features, start from $29 per month and go up to $79 per month.

10. Loox

If you want to increase your conversion rate using photo reviews, then Loox is the Shopify app you need. It automatically sends out emails on your behalf, seeking positive feedback from your customers. Positive reviews allow your customers to shop confidently at your store, without worrying over quality.

Pricing Details:

You can use Loox’s free trial for up to 14-days, and should you wish to continue, you will have to pay $9.99 per month.

 

Conclusion

 

Selling your eCommerce business sounds difficult. However, if you are armed with these Shopify apps, you can get more traffic and optimize your eCommerce store with substantial ease, which will make it that much easier to find success. A successful eCommerce store is an easy sell. While there is no shortcut to success, your path will still become more optimized.

Flippa Pricing Update – Reduced Listing Fee of $15

Flippa Pricing Update – Reduced Listing Fee of $15

This month Flippa has again demonstrated a commitment to building out a frictionless sales experience with the world’s largest network of buyers. Did you know that 4250 new verified buyers join Flippa each month?

Adding to our Quickbooks online integration launch last month we’ve added a new Google Analytics integration, Non-Disclosure Agreement functionality for higher value listings and free syndication to a network of partner sites.

 

Google Analytics Integration

With one-click connection to GA, business owners can now publish traffic data on their listing and in-turn assist buyers with verifying the health of a business.

How does it work?

 

Step 1

Simply choose to list your website or online business with Flippa, step through our simple listing builder and choose to connect your Google Analytics account. You’ll be asked whether you wish to connect your traffic data. When prompted, log in to GA and choose the account associated with your website.

Step 2

Once you have connected and launched your listing, a pop-up box will be visible to buyers that your business has connected your site traffic from GA. 

 

 

There will also be a table displaying your websites monthly page views and number of users to the site. 

 

Non Disclosure Agreement for Higher Value Listings

High-value listings can now protect sensitive information with a simple to use Non-Disclosure Agreement.

 

Buyers that want access to key confidential data, like your business name or profit & loss statement will now have to register as buyers, create a profile, go through Identity Verification, accept the NDA terms and finally, identify why they are interested in your business. This replaces the old NDA functionality on Flippa.

 

Free Syndication

Flippa will now syndicate your listing to multiple directory businesses for free. Simply ask your account manager. This is available for listings over $50,000 only.

 

So what is the new pricing scheme?

It’s simple. You pay a listing and a success fee. The listing fee is due on all listings and the success fee is payable when you sell.

 

All listings, regardless of type, size or location, are charged at a $15 per month listing fee. While we are the only true marketplace and platform to buy and sell a business this also makes Flippa less expensive than the mainstream directory websites.

Of course, you can choose to cancel your listing at anytime.

As it relates to Success Fees. These are payable by the seller or designated owner of the account. These fees are now variable and are based on your final selling price. For further detail, refer to success fees

 

The breakdown:

If you sell a website, domain, app or business between $1m to $5m your success fee is now 5%

If you sell a website, domain, app or business between $500k to $1m your success fee is now 7.5%

If you sell a website, domain, app or business between $1 to $499k your success fee remains at 10%

 

Finally, Flippa also partners with a network of brokers. Instead of owning the sales process yourself and working with a Flippa account manager, you can choose to work with one of our network of partners. These brokers will manage the sale for you and you will still get the benefit of the Flippa platform and the world’s largest network of buyers. If you do choose to partner with a broker the success fee is 15%. This is shared between Flippa and the broker.

 

We currently do not charge buyers for use of Flippa.

 

We are committed to building out a frictionless sales experience and we think we are making good ground. That said, we are always looking for feedback so if you require clarification or would like to provide feedback feel free to get us on [email protected].

 

Instead of loan financing consider a ROBS

Instead of loan financing consider a ROBS

For prospective buyers in the U.S. with substantial assets lodged in a 401(k), 501 (k), IRA or other retirement fund, Rollovers as Business Start-Ups (ROBS) may provide a means of financing with some very significant advantages.

When we say ‘substantial’, that means a minimum of $50,000 to roll over. Otherwise, the set-up and monthly maintenance costs for the quite complex ROBS arrangement will be too great a proportion of the investment to justify using this scheme.

However, for significant investment amounts the costs are entirely viable and quite advantageous. Set-up fees paid to an experienced ROBS provider are normally around $5000 upfront, with an ongoing annual administration fee of up to $2000. Legally speaking it is actually possible to do all the work yourself, without using a ROBS provider, but that would be foolhardy with many IRS and DOL compliance complexities ready to trip you up.

In fact, the steps are much too complicated to cover comprehensively in an article such as this one. However, here is an introduction to the world of ROBS, what it is and basically how it works.

Age is no barrier

You don’t have to be any particular age to roll-over funds from your eligible tax-deferred retirement account. It doesn’t matter how young or old you are. You just need to have the funds in credit and then work systematically through the rollover process. The great advantage is that this is not a loan at all, so there are no loan fees and no interest to pay. At the end of the day, it’s your money. You are simply accessing it for business investment purposes. The funds cannot be used to service personal expenses or to acquire purely personal assets. ROBS is for business investment only. As one potential source of finance to be considered, it can be used in parallel with other financings, including loans

In essence, you will be rolling over your money from one retirement fund into another new one, which your business will set-up. If you are buying an existing business you will put the necessary structures in place for the roll-over prior to the transfer of the business. The modest set-up costs cannot be covered by the ROBS itself. You need to cover these separately up front.

How does it work?

The first step is creating a C corporation (C-corp). This is obligatory and cannot be circumvented. However, this part is actually very easy and quite inexpensive, although specific details will vary slightly from State to State. The more complex step is then setting up an employee retirement plan, most commonly a new 401(k), for the new entity. At this point, you roll over the amount you have decided on from your existing personal 401(k), 501(k) or IRA into the new corporation’s retirement plan. The plan purchases stock in the C-corp, acquiring a shareholding on behalf of all employees, as will be explained shortly, and that purchase amount is released as your business capital. The ROBS rollover is now completed. There is no loan of any kind involved to repay. Of course, the retirement fund earns its share of the profits for future distribution and takes its share of any hit if the business loses money.

In the next stage the C-corp, of which you are the part-owner and also technically an employee, uses the capitalization from the ROBS to build a new business or buy and develop an existing one. The funds can be used for any normal legitimate business purpose, but not for personal expenses that only you benefit from and not for over-payment to yourself of any inflated management or director fees. In fact, any salary payment to yourself must not come from the rolled-over funds directly but must come only out of operating expenses. As we said, it’s your money – but in return for the release of investment funds, the new C-corp retirement plan retains its shareholding in the business and receives its share of all profits after reasonable expenses. The retirement fund will be a significant or even the major shareholder (depending on what other financing sources were used) and as director, you are required to the best of your ability to operate the company to the financial benefit of the fund and its members. You will be covered by the C-corp retirement plan and profits accrued by the fund will ultimately benefit you when drawn down.

Administration of this complex legal arrangement is demanding and really needs to be outsourced to an expert ROBS provider, although this is not legally mandatory. Ongoing monitoring for IRS and the DOL, and other statutory compliance including managing the annual IRS Form 5500 return is definitely no work for the business operator. However, the fees for this administration are actually minuscule compared to the loan costs on a comparable amount of financing from traditional loan sources.

Remember it’s still a retirement fund

ROBS advantages come with some complexities. One of these is that all employees of your new business have the right to join the C-corp retirement fund which you have set up. Note that you yourself must be classified as an employee managing or directing the business. There is no legal specification of the number of hours you must actively work on the business or how much you may pay yourself from the business operation, except that payments to yourself must be deemed ‘reasonable’. Otherwise, they will be treated as a ROBS prohibited transaction. This means that using a ROBS arrangement may not be quite as suitable for buying businesses with a ‘passivity premium’ because of requiring very little owner presence or investment of time.

All employees of the business will have the right to join the retirement fund and legally must be invited to do so. The ROBS provider routinely oversees this notification as part of the ongoing monitoring of the arrangement. For smaller businesses, this is unlikely to be an issue as the definition of ‘employee’ is quite restrictive. Contract service providers and casual workers are not covered at all. Eligibility varies slightly from State to State but essentially an employee must be at least 21 years of age, have worked for the business for twelve months or longer, and have worked a minimum of 1,000 hours during the preceding year. Processing the employee contributions and employer liabilities under the plan is quite onerous and is best handled through the ROBS advisor. However, many smaller online businesses will actually have few or not even any additional employees.

Winding up a ROBS arrangement

Often people enthusiastically enter into an arrangement in the excitement of a new business venture without working through what the eventual exit will entail. With a standard business loan, with all the associated costs and often punishing interest rates, paying out the loan when the business is eventually sold is very straightforward even if financially penalizing.

By contrast, exiting a ROBS provision is inexpensive but a little more complex. If the business is sold then the C-corp retirement fund as a shareholder receives its due share of the sale price, minus funds required to wind down the business and pay out existing liabilities. The retirement plan is then wound up and its assets distributed proportionally to all employees who have contributions in the fund. As the business owner and director your own closing balance in the fund is simply rolled over into a new or existing personal IRA for your (highly tax-effective) benefit. Essentially, through ROBS you have used your assets in an eligible retirement plan to finance business for as long as you operate the business, maybe for many years. At no point through this arrangement have you taken a loan or drawn down cash, and hopefully the ROBS has saved you lots of money.

However, it would be remiss in this article not to cover the implications of a less positive scenario in which the business makes a loss or even totally folds. Simply put, if the business has lost money and is sold for a lesser value than it was set up or acquired for, then the retirement fund and all of its beneficiaries, including you, take a hit. In the event of a total business failure, the assets you originally held in your original retirement plan will have been wiped; but as the ROBS is not a loan there is no financial liability to repay. Formally unwinding the ROBS must still be done according to law and the C-corp retirement plan is then closed out. Any other employees covered by the plan must have their situation and options explained to them. The ROBS provider would attend to this.

ROBS presents a positive opportunity

The ROBS scheme, while it may sound a bit daunting from the explanation provided above, is actually a very innovative business-backing initiative. It enables entrepreneurs to access money which is locked away in a retirement fund for business ventures, without the burden of normal business loans and with the prospect of strong profit returns on personal investment.

Start-up businesses and online businesses which have been bought and built up using some capital from ROBS arrangements actually have a significantly higher success rate than businesses relying more heavily on business loans for the primary financing. This may possibly be because business buyers who are backed by both retirement fund assets and the sophistication to understand the ROBS provisions are likely to have the capacity and the necessary perseverance to develop financially successful business outcomes.

ROBS arrangements are not for everyone. If you have $50,000 or more locked away in eligible retirement plan assets, make some time to talk to an expert ROBS provider. A substantial one-off first-time advisory consultation is generally offered totally free and without obligation. Be aware that the adviser will have a vested interest in talking up the arrangement, but you can always walk away. It’s a fascinating and potentially highly lucrative financing option to explore.