QuickBooks Online is now integrated with Flippa

QuickBooks Online is now integrated with Flippa

With Flippa you can now connect your financial data. This can be done by uploading documentation or effective immediately, customers of QuickBooks can ‘one-click’ connect. Assuming your business is in a good operational state, there are two main determinants to a sale – price and financial health. As it relates to financial health, this is about giving a prospective buyer comfort in what they are acquiring. Think of it like buying a used car — one wouldn’t spend the money without first looking under the hood, viewing accident and incident reports, and taking it for a test drive. Viewing your financial data is analogous to taking a car out for a test drive.

Quickbooks is one of the leaders in this space and we are delighted to announce our integration. With this service, Flippa is making it easier to list and faster to sell.

 

So, how does it work?

 

  1. Start Selling with Flippa
  2. Merchandise your business
  3. Look out for the Quickbooks connection

 

Once you have connected the following will auto-populate:

  • Annualized Revenue and Cost data
  • Prior 3-month performance as a means to assess your current state of operation
  • A P&L covering the prior 12 month period

 

Why is Flippa doing this?


It’s quite simply the most important verification point when considering a business’s value. We know that businesses with access to verifiable financial records sell faster and are more trusted.

Flippa’s integration with Cloud accounting software is an industry first. Buyers can now benefit from increased transparency into financial verification to assess the performance and viability of a business prior to engaging in conversation with sellers. With this integration, sellers can now connect and reveal their financial information to buyers much faster, with less work.

Check out the video tutorial below for more information.

 

Update to asset and business definitions on Flippa

Update to asset and business definitions on Flippa

At Flippa we are continuing to evolve our platform and seek to improve the experience for both buyers and sellers. Over the last month, we have changed the definitions of an asset and business on our website. Below we will explain the changes and showcase Flippa’s updated and more detailed pricing model, which outlines exactly what each service has to offer.

Pricing your Asset

Asset listings are priced at $25. This has not changed. The Flippa Success Fees, where you successfully sell your asset, are 10%. This has not changed.

So what are the changes?

From February 1, starter sites and apps have a maximum reserve – your reserve cannot be greater than $50,000. You also will not be able to set a minimum offer requirement of greater than $50,000 and this will be the Buy it now limit. This does not relate to domains. Domains can be priced at any amount.

Why? Buyers have become increasingly frustrated with unrealistic price points. Ultimately, anything with strong traction should really be listed as a business rather than an asset.

The pricing matrix which appears on the Flippa homepage and throughout the onboarding process clearly explains the key differences.

If you do have additional questions please direct enquiries to [email protected].

 

Listing your Business

Broker Matching requirements

Flippa have lowered the minimum annual gross profit amount that your business needs to qualify for broker matching from $200,000 to $100,000.

Dedicated Account Management

Both self-service for selling your business and broker matching now include a dedicated account manager. The account manager will be on had to assist sellers throughout their journey.

Data Based Valuation Guidance

When listing your business we have provided data based valuation guidance. This feature utilises historical sales data to assist you to accurately price your business in a reasonable range. The feature is available and useable when listing your business.

We’re excited by the progress we’ve made in recent months. We are proud of our history as an asset and business marketplace and we will continue to evolve as we listen to feedback from both sellers and buyers. Our vision is now to service buyers and sellers of businesses globally by connecting all parties, key services, and facilitating the end-to-end business exchange in a trusted and efficient environment.

What sellers need to know about valuations

What sellers need to know about valuations

There is no shortage of motivated buyers on the lookout for great online businesses. While the stock market is highly volatile, there is increasing enthusiasm for investment or purchase of online businesses. So, the potential appetite for buying is enormous. However, by far the major brake on buyers committing to a final purchase decision is their uncertainty about pricing. There is little understanding of sound valuation principles and buyers are wary of what they see as pricing based on an arbitrary multiple of net profit. Not to put too fine a point on it, buyers believe that sellers generally over-value their businesses and they find it hard to define a reliable and objective valuation method. The outcome is that too often an enthusiastic and highly motivated buyer fails to follow through with a final purchase because of the understandable anxiety about paying more than the business is worth.

How to value an online business

Typically with an online business, there will be little or no inventory to value and only a very limited if any physical asset base. Accordingly, the business will generally be valued almost entirely on the projected profits, calculated on the basis of current and relatively recent past profits.

While there are various alternative techniques for valuing an online business, including the traffic valuation method for sites with high traffic as a business asset but with no or incomplete monetization, many of these methods are highly technical and yield disputable outcomes. They are often suitable only in highly specific situations, depending on a precise definition of the particular revenue model, current and projected OR you are the next Facebook which is highly unlikely.

For that reason, online businesses are almost always sold on a negotiated value based on an earnings multiple or a price to earnings ratio. While it is very common to define the ratio in terms of a multiple of average net monthly profit, it is simpler for most purposes to quote the ratio as a multiple of annual net profit. Using this basis, average asking price multiples have increased from 2.4 in 2010 to around 3.4 now (sourced from our good friends at Centurica), with final selling prices typically at around a 10% discount to the asking price. This suggests that generally speaking sellers who value their businesses realistically can expect to achieve a sale outcome within reasonable range of the asking price. But putting a realistic value on the business is complex and there is an understandable tendency of business owners to over-value their business.

The average net profit multiple varies markedly from one kind of online business to another and also depends greatly on the specific market niche. However, the absence of highly consistent profit ratios can cause buyers to be both surprised and sceptical about the valuation proposed by a vendor. On objective grounds SaaS and e-commerce businesses sell for a significantly higher profit multiple than content-based or media businesses, because of the higher reliability of recurring income in the former models and the generally much higher operational time demands in the latter cases.

As an example, a currently listed relatively small SaaS business (not on Flippa) with a claimed $55k net annual profit has an asking price of $250k, a hefty earnings multiple of 4.55. You would expect that ratio level to make any buyer hesitate. Let’s assume it doesn’t have rocket ship growth (doubtful because they are selling) a buyer simply will not pay that amount.

Vendors who are seeking to sell at an earnings multiple above the prevailing average need to factor in the understandable buyer nervousness and be sure that the audited income and expenses figures are going to stand up to serious interrogation. While there is never an absolutely guaranteed success in any investment decision very few buyers overall, and virtually none in the six and seven figure range, are interested in taking a wild gamble on getting value for money.

The valuation factors that buyers will weigh up

Because it goes without saying that buyers generally regard sellers’ asking prices as inflated, it’s important that the vendor has realistically priced the business having regard to all the considerations which the prospective buyer will be factoring in.

The income figures must be accurate and cover the duration of the business operation, including only those income streams which will fully transfer to the new owner with the sale. Gross and net income trends will be crucial to the buyer’s assessment. All expenses must be transparently declared in detail, including all payments made to service providers and suppliers of goods and expertise. It is vital to new owners that they will be able to maintain all of the necessary business operations within the same cost structure, or ideally achieve some savings where possible. Any outstanding expenses or other debts transferring with the business obviously must be declared.

Absolutely all operating expenses need to be disclosed, not disguised, by the seller and discoverable by the buyer. Often overlooked, the full value of any unpaid work which has been invested in the operation of the business will be accounted for in the buyer’s own valuation of the business. The predicted cost of the new owner’s time, and any specific technical expertise required, will significantly affect the buyer’s business valuation. It is absolutely essential to the prospective buyer to be able to rely on an honest declaration of the time and expertise required to manage the business, as the new owner will need to put a dollar value on this expense.

The prospective buyer will need to analyse all the financial indicator trends over the longest time frame for which the figures can be produced. Sources of customers and the cost of gaining them will be important factors for the buyer, as will the effects of any changes to attracting traffic such as Google algorithm changes or even penalties which may affect search traffic.

The buyer will need to assess how competitive the niche is and whether there are barriers to the entry of competitors, which raise the business valuation, or the likelihood of increased competition in the absence of any significant barriers to entry, which will lower the valuation. It is crucial to the buyer to ensure that any licences required are fully transferable, or readily obtainable by the new owner, and that any branding, trademarks or other unique advantages will transfer with the sale.

The seller needs to appraise the business through a buyer’s eyes

The seller will be keenly aware of the time, energy, money and vision which has brought the business to its current status and positioned it for a successful sale. Naturally the vendor wants to achieve the highest possible price. However, seller over-valuation is the prospective buyer’s biggest turn-off. It really enables the sale process if the current owner evaluates the business using the same valuation indicators that the buyer will be applying.

It is worth mentioning that some buyers will apply a discounted cash flow (DCF) measure in their valuation. This is a somewhat less relevant consideration in an era of low inflation as at present, but put simply the principle is that a dollar of profit now is worth more than a dollar will be in the future, so a formula is applied to compensate by lowering the notional future profit value, given that the buyer will be paying in advance the equivalent of some years of projected net profit.

The bottom line for the buyer is that the online business acquisition must be fully transferable, it must be sustainable, it must have scalability, and above all it must be purchased at a reasonable earnings multiple. While it is still relatively unusual for an online business to be bought using funds from an institutional lending source, lenders may place a ceiling on the multiple, determined by the actual business model and specific market niche.

Overall, to achieve a reasonable pool of potential buyers interested in undertaking onerous due diligence and finally negotiating a fair sale price, sellers need to keep their initial asking price close to buyer expectations. Avoid ambit claims with the view that eventually you will negotiate down. The process of carefully considering a purchase is time-consuming for the prospective buyer. The factors outlined above will determine where the buyer expectation sits in terms of an earnings multiple. There are so many variations in play that the ratios will vary between around 2 and 4. There would have to be exceptional circumstances taking a selling price outside this already wide range.

Know exactly why you have decided on your own seller valuation, and understand what the buyer will be factoring in. Your initial asking price should not be more than 10% higher than you believe on reasonable grounds the buyer will consider fair after all due diligence and consideration of all the factors covered here.

It is very clear that a reasonable seller valuation is always the key to a successful sale.

 

Video Marketing is the new trend in business

Video Marketing is the new trend in business

People are now watching 100 million hours of video content on Facebook on a daily basis while 10 billion videos are viewed daily on Snapchat.

These figures are mostly due to using video content for marketing purposes. We can’t deny the fact that video marketing is the new trend in business.

We take a look at the latest trends in video marketing and see if the medium is all hype or effective. Parham Azimi, CEO of Cantemo gives us his insights.

The average consumer would find it hard to avoid watching some form of video in a day.  The social media explosion has given us a platform where billions of people can get easy access to free video distributions.

Cisco predicts that 82% of internet traffic will come from video by 2021.

Amateurs do much of the video content we see for different reasons. A growing number can be linked to video marketing.

Social Media Examiner shared a report that shows 60% of marketers use video with 73% of them planning to increase their use of the format.

One of the most significant trends is that companies are now starting to build video marketing strategies. Tactics are now being formed to take advantage of social media as a means to promote video content.

It does not come as a surprise that more brands are beginning to produce videos because 73% of marketers believe that video impacts ROI.

By nature, videos are more engaging than static text and imaging. Social video gets 12 times more shares than text and images put together.

The top two benefits of video marketing in social media are higher traffic and business awareness. 75% of internet marketers give positive reports from video regarding getting more traffic.

We take a look at Buzzfeed’s Tasty Facebook page which has more than 93 million likes.  The posts on this page are bird’s eye view videos of meals and snacks made by an unknown chef.

The most watched video is a 1.44-minute video called ‘sliders four ways.’ which shows four recipes for tray cooked burgers. This video has been viewed 203 million times, has 5.5 million shares, 1.4 million interactions, and 289,000 comments.

If you think about recipes and cookbooks, only a few will read them for fun. Tasty took advantage of video to make these same topics engaging and lively.

They are using the same video platform to promote other products like custom cookbooks and an induction cooktop.

The company has hit the right spot when it comes to engaging consumers. They have separate pages that cater to different countries and cultures when it comes to cuisine. A page that offers healthier recipes was also added. Tasty videos are short and easy to follow. They also mastered the footage without sound tactic. The angle that they used for footage also gives the user the feeling that they are participating. These techniques have been proven effective with quantifiable results.

New Technologies

We can expect an increase in competition for viewing time. There are new technologies that can be used to boost the effectivity of video marketing.

Virtual reality, augmented reality and 360-degree videos are some of emerging tech that can be used to enhance current tactics.

A new category has come up due to AR and VR tech called immersive video. This is going to get popular soon which makes the competition fierce among marketers.

Ultra HD resolution is slowly becoming the standard although file sizes are still a challenge.

A 360-degree video ad from Hong Kong Airlines has proven to be 35 times more effective than the same ad in the 2D version. The University of Sydney has also featured a 360-degree tour of the campus. This decision is based on the 20% international student population in the school.

The travel industry is also reporting great success from VR and 360-degree marketing content. Allowing prospects to experience a destination before making a purchase increases the chance for more sales.

Thomas Cook introduced VR videos to promote specific tours in ten of its New York offices. This resulted in a 190% increase in the promoted tours and 40% ROI.

Michael Santiago - Author

Michael is an experienced leader and innovator with a long track record of successfully developing brands online. His proficiency in growing as platforms, generating web traffic and global team building has aided in driving Newswire’s rapid growth. Michael strives to make press release Newswire the disrupter in the PR and Marketing space, allowing businesses to attract media attention without the need for high-priced agencies. For more info.CLICK HERE

 

Flippa adjusts pricing and adds key services as it evolves to service high value digital businesses

Flippa adjusts pricing and adds key services as it evolves to service high value digital businesses

At Flippa, we are always looking for ways to add value and we will always add new features to support our growing ecosystem of business owners, buyers and the brokers who often support them.

Over the last few months we’ve been working on several ways to improve our seller and buyer experience. This has included the introduction of Flippa Escrow, high value business sales, dedicated account management for both sellers and buyers and the introduction of a broker program. Moving forward, we’ll also be investing for efficiency and to protect the integrity of the marketplace. This will include:

  • ID verification to assure buyers and sellers
  • Seller declarations to pre-qualify business inclusions
  • In-platform buyer / seller messaging services
  • An easy to use profile creator

And today, we are announcing new pricing plans designed to better suit our three core services. The new plans take effect effective immediately – Monday 5th November 2018 and are as follows:

  • Asset Sales including the sale of a domain, app or starter site, i.e. something not generating any revenue, can be sold for a listing fee of $25 and success fee of 10%.
  • Self Service Business Sales  is best suited to profitable businesses with a minimum six month trading history. Sell for a listing fee of $200 and a success fee of 10%.
  • Broker Supported Business Sales will match you with a specialist broker. Best for those with annual profits of 100k+. Sell for a listing fee of $200 and a success fee of 15%.

The 10% success fee on Asset Sales and Self Service Business Sales is a reduction. This was previously 15% for Credit Card payments and 12% when using Flippa’s escrow service. Flippa still absorbs the escrow transaction cost.  

 

Note: Pricing and fees are in USD. Your sell price should always be in USD.

New Services – Buyer and Seller Management

We’re pleased to announce that Flippa has introduced Buyer and Seller Management services. These services are free and designed to streamline the sales process for you.

  • Buyer Management takes the hard work out of the search. If you are looking to buy a business over $25k, simply schedule a call with one of our buyer managers here. They’ll learn about your needs and explain the matching process. They’ll then search for businesses on your behalf and will act as matchmakers.
  • Seller Management takes the hard work out of the matching process. This service is designed for businesses priced over $25k. You’ll be matched to an account manager post listing and your account manager will ensure your profile is optimised and that buyers are verified before they are put in touch. They’ll be by your side every step of the way.  

Coming Soon

We’re excited to announce that we will soon introduce two new services designed to improve the integrity of the Flippa platform – we take the security of our customers very seriously:

  • ID Verification. Flippa has partnered with the award-winning Jumio to ensure that both buyers and sellers are verified before listing or making an offer for a business. This service will be released in November 2018.
  • Platform Messaging / Negotiation. Flippa is working on improvements to the existing messaging functionality. This will enable in-platform messaging and negotiation to ensure buyers and seller private contact details remain confidential and that all communications are confidentially and securely stored. This service will be released in January 2018.

Helping to support the thriving business sales ecosystem

We’re excited by the progress we’ve made in recent months. We are proud of our history as an asset marketplace but we have evolved. Our vision is now to service buyers and sellers of businesses globally by connecting all parties, key services, and facilitating the end-to-end business exchange in a trusted and efficient environment.

 

Flippa Partners with Digicert for SSL Certificates

Flippa Partners with Digicert for SSL Certificates

Whether you’re operating a small boutique eCommerce or a full-blown enterprise business, having a Secure Socket Layer (SSL) certificate on your site can be all the difference between making a sale and losing out on it.

SSL certifications protects users identities by establishing secure connections from the web browser to the server the website is hosted on. By having an SSL certificate on your website (usually noted by the green lock symbol to the left of the URL), users are more likely to trust your website and inputting their personal informational.

Digicert is one of the leading SSL Certificate providers and is trusted by many of the Global 2000 companies. For more info on SSL Certifications, you can view their plans here.