How To Have Success In An Online Business

Developing an online business mindset is critical to the success of an online business. Your online business mindset truly sets the course of your business from day one.

People join an online business expecting HUGE results in 2 point 3 seconds and that is NOT how a business of ANY kind is started and grown. A true business takes time to grow and build. There are no shortcuts of ANY kind. So in order to develop the right online business mindset, you have to take a step back and see the grand picture, especially online. Not developing their business mindset causes a lot of errors

What you see a lot are people who join an online business, they begin marketing it, and find no success. So then a couple weeks later, they quit that business and join another business, to find the same result. Those I call jumpers. The go from one business to another, only finding pretty much the same result. Maybe the have limited success with one business. But that was not the goal they wanted to achieve.

But is that really what the problem is?

Not only could it be that your online mindset is out of skew, but it also could be that one does not have the proper skills, know enough marketing methods or the strategies to use them. But rest assured that all comes from your core philosophies about online business.

There is a psychological flow of how a mindset is developed, and it goes a little like this. Your core values or philosophies dictate your attitudes, how you feel or react to certain situations. Your attitudes then control what you do, or your actions. Then the actions you take control the results you find out of those action. Then your results dictate your lifestyle or your goals.

Philosophy > Attitudes > Actions > Results > Lifestyle

Most times people jump in mid stream at the actions step and short circuit the entire mindset flow. Why, because they are too eager to get what they want…a different lifestyle. So they get in at the actions step and expect certain results. But as any business person knows there are bumps in the road that will derail you from growing your business. And because of that, eventually, because of bad results, they fall out of the online business entirely.

What really has to happen is that they have to take a couple steps back and change their philosophies, their core values, to follow the flow properly. If you do not have your philosophies in the proper format, everything else that follows will fail.

When you come into the flow at the actions stage, and you hit a bump in the road, and trust me there will be difficulties in an online business; the step before that, attitude, will dictate how you handle that situation.

For instance, if you get in a business and you don’t get the results you want, based on your attitude, how likely are you to stay in the business, let alone be active at all?

And that is the reason you see the “jumpers” out on the internet.

So one has to get back to their philosophies or core values in order to have online success. Core values could be….

Treat this like a business. This is not the lottery. Building an online business takes time, just like any other “real” business.

Or since this is a online business, maybe I need to learn more about how to market online properly. Because online business is very much different than a “tangible” business. There are different ways to grow it for success.

So if you do not see results in 2 seconds online, that does not mean that the entire online business industry is a scam. That attitude is a result of your core values or philosophies. If one had their philosophies in order, they would know that it takes time to build a business.

Importance of Terms When Buying or Selling A Business

In the initial stages of listing a business for sale, all the attention is placed on getting the business in shape so it presents as strongly as possible, sometimes doing a business valuation to arrive at the most appropriate listing price for the business and discussing the tax implications to the seller of the business. Tom West is the owner of Business Brokerage Press and he has a great saying that most sellers and buyers don’t understand until they get into the negotiations of the transaction and it is – You name the price and I’ll name the terms.

In other words, price is important but the terms of the deal are much more important. And here are some thoughts why.

If a buyer made an offer for all cash and to close the sale in 30 days and another buyer made the offer subject to getting a loan and to close the sale in 60 to 75 days and you are the seller of the business, which offer would you want to accept? If they are both offering the same price for the business it would be a no-brainer to accept the cash offer.

Using the same scenario as above, but the cash offer was 5% less than the offer from the second buyer and you are the seller, which offer would you accept? Your answer would probably be – it depends. Some sellers may be willing to accept the cash offer and close the sale. Some sellers may be willing to accept the higher offer as the price difference of 5% could be more than enough to offset waiting 60 to 75 days to close the sale. Most sellers, I would think though, would include other factors into their decision. Which buyer do they think is more qualified to buy and operate the business? Which buyer would be able to get approval from the landlord to take over the lease? Probably the most important question the seller would want to know, however, if they accepted the offer from the second buyer, is what are the chances the buyer will get their loan application approved? If the seller is not sure the buyer would be qualified, taking the cash offer at a 5% discount may be much more attractive.

In the current economy, the seller must be willing to carry a note for part of the purchase price. Very few buyers have the capacity to pay cash for a business. Also, in simple terms, it’s ‘good business’ for the buyer to use cash as a down payment on the business but then leverage the rest of the purchase price via loans as any interest paid is tax deductible. This also allows the buyer to buy ‘more business’ which means if the business is performing well and throwing off the right cash flow, the buyer can get more cash flow for each dollar of down payment. This is obviously attractive to the buyer.

The terms of a deal don’t just swing on the price and whether or not the seller will carry a note. These are both very critical questions but whether a deal works or doesn’t work can include many things. These include how much free training the seller is willing to provide, if the seller is needed to provide paid training after the free training, what costs are incurred for the business to change ownership and who pays them. For example, using a title company to handle the escrow will incur fees, the landlord may charge a fee to process an assignment of the lease, if the business involves a franchise there may be a franchise transfer fee, how long should the covenant not to compete be in terms of distance and time, and there are many other items.

Buying and selling a business involves many complexities. The longer both parties take to reach agreement on the complexities the greater the chance the negotiations will fail as one or both parties burn out from the inability to reach an agreement.

Andrew is a 5-time business owner that helps entrepreneurs exit or enter business ownership. His services include helping owners sell and/or buyers purchase an existing business or consult on purchasing a franchise. He also provides certified machinery and equipment appraisals and business valuations.

Andrew currently holds the Certified Business Intermediary (CBI) designation from the International Business Brokers Association (IBBA), the highest credential awarded by the IBBA and the Certified Business Broker (CBB) designation from the California Association of Business Brokers. He also holds a Brokers License with the California Department of Real Estate, is a member of the Sacramento Metro Chamber of Commerce and the Chair of the Sacramento Chapter of the California Association of Business Brokers.

5 Tips When Selling A Business

A business that is available for sale is often handled like selling a residential property or house – except they are totally different. In some states in the United States, for a professional third party or a broker to represent the seller of the house they are required to have a real estate license. That real estate license allows that person to sell a house, a commercial property, and in some cases, provide mortgage loans and assist in the transaction of selling a business.

As I mentioned above, however, all have similarities but there are major differences. When selling a house both seller and their broker want everyone to know the house is for sale whereas with a business, the sale is kept confidential to protect the business, the employees and other parties.

Here are 5 tips to help an owner thinking of selling their business.

First, most businesses rent their facility. However, if the business includes commercial real estate it should have a separate value and not be included in the purchase price of the business. It doesn’t mean the same buyer cannot buy both, it means that a separate value should be struck for the real estate in its own right and a separate value done for the business taking into account the fair market value of renting or leasing the real estate. It is wrong logic to value the real estate, value the business and not allow for fair market rent and then add both together to arrive at one listing price for everything.

Second, bring together a team of advisors or at least have them identified in case they are needed. The team should include an accountant and attorney while there is room for a personal financial planner.

Third, the most important components to a buyer are cash flow and potential. If the business doesn’t have a cash flow, the buyer may as well start the business from scratch and do things their way. The exception would be where the assets of the business are already in place such as for a restaurant, manufacturing site or other asset dependent business.

Fourth, an extension of the above point is to make sure that whatever price is asked, it has been properly valued. Most businesses being sold by the business owner are overpriced. A business owner becomes attached to the business and what it took to get it where it is. They therefore think it’s worth more than it is. The best approach is to have the business or its assets valued by a professional independent third party. There are different professional appraisers for different types of valuation. For example, there are different appraisers that specialize in valuing a business as opposed to valuing hard assets such as machinery and equipment versus someone who appraises intellectual property or commercial real estate.

Fifth and finally, make sure it’s clear who the buyer is and any down payment they are bringing. If the buyer says they are buying the business and have an investor, the first thing to do is ask to meet the investor. As a matter of course, it should be the investor making the inquiry as they have the money and will therefore make any final decision. Be careful how much you share until its clear the buyer has the potential to buy the business; not just dream about it.

Selling a business comes with complications. It is rarely a simple and straight forward process. One of the most important things to do is for the seller to put themselves in the shoes of the buyer. Being able to do this will greatly improve the chances of success in selling the business.

Andrew is a 5-time business owner that helps entrepreneurs exit or enter business ownership. His services include helping owners sell and/or buyers purchase an existing business or consult on purchasing a franchise. He also provides certified machinery and equipment appraisals and business valuations.

Andrew currently holds the Certified Business Intermediary (CBI) designation from the International Business Brokers Association (IBBA), the highest credential awarded by the IBBA and the Certified Business Broker (CBB) designation from the California Association of Business Brokers. He also holds a Brokers License with the California Department of Real Estate, is a member of the Sacramento Metro Chamber of Commerce and the Chair of the Sacramento Chapter of the California Association of Business Brokers.