Buying and Selling Online Businesses

Buying and Selling Online Businesses

Buying and Selling Online Businesses

The process for buying and selling online businesses is very similar to buying and selling a bricks-and-mortar business. However, online businesses add in a few extra complications that buyers and sellers should consider. Valuation, in particular, may be difficult to determine for online businesses.

Buyers:

  • Consider the business’s online presence. One of the first things that you want to do if you are considering buying an online business is to consider its reputation online. Are you going to keep the name and services? Will that negatively affect the business in the future? Check review sites or talk to customers directly. Consider whether this market will still be there in the long term (is the business catering to a fad?).
  • How much is this business actually worth? Check the financial records, including assets and liabilities. Check legal information and tax issues. This will help you determine whether the business is worth the asking price. Accountants and business advisors who specialize in online businesses can help as well. There are accepted methods for valuing websites based on earnings or traffic that are different to the valuation methods traditionally used for offline businesses. Contact us to help you with valuation issues.

Sellers:

  • Gather your financial and legal information. Find financial statements for the past three years (if possible) and details about all assets—physical and other assets like goodwill or intellectual property. Gather leases, insurance policies and all registration details associated with the business, online or offline.
  • Value your business. Once you have all of the information you need, then you can begin to determine what your business would be worth to a potential buyer. What you think it is worth and what the market will pay are not always the same thing. There are different valuation methods that can be used depending on whether you are selling physical assets or just an online business. . Valuation can be complicated, so give us a call to help with this process.
  • Find potential buyers. The traditional methods for attracting buyers still apply, although if your business is purely online, you now have a potential global market. Consider where you might get the best result including advertising online, through your existing networks, trade publications, word of mouth or through specific customers. There are some dedicated platforms that have been established specifically for the sale of purely online businesses. We can help to point you in the right direction.

For both buyers and sellers:

  • Negotiate the sale. Negotiations for online businesses need to involve the basics like sale price, deposit amount and settlement period. However, sellers also need to consider handing over things like domain names, passwords, logs, customer contact information and databases. Selling an online business is much more about selling information than its brick-and-mortar counterpart. The buyer may also require some training to continue to the run the business.
  • Prepare and agree a contract. We can help prepare the contract so that all of the relevant information of the sale is addressed. For example, the right to use names and customer information will probably need to be specifically included in the contract.
  • Prepare the transfer documentation. Transferring a business can also mean transferring registrations, permits, licenses, etc. As a seller you may wish to cancel your ABN, notify the ATO of ownership changes and deal with any tax-related issues.

How can Onyx Legal help you?

Whether you are buying or selling, talk to us first so we can walk you through this complicated process.

5 Ways To Check Whether Questionable Email Is Spam

5 Ways To Check Whether Questionable Email Is Spam

5 Ways To Check Whether Questionable Email Is Spam

check if junk email is spamAre you one of those people who can’t help opening emails, even when you don’t know who they are from and suspect the email might be spam? Or worse, do you actually waste your time responding to people and telling them not to bother you any more with their offers to get your website on the first page of Google, send you cheap pharmaceuticals or get you a date?  

Don’t waste time responding to emails that you should just delete.

With a little practice you can get your delete button working much quicker, saving you time and aggravation. Some spam is obvious and your junk mail filter will pick it up. Other emails somehow get through the filter, but are just as obvious from their title and you can simply run through the list and delete. But what do you do with those that look like they might be legitimate? The Australian Communication and Media Authority is the government entity responsible for monitoring anti-spam compliance in Australia. Despite the difficulty in navigating their website, they receive an average of 27,350 Spam Act breach complaints per month (ACMA Spam statistics January 2015). 100% of complaints currently under investigation relate to lack of consent.

100% of complaints about junk email or SMS investigated by ACMA are about

lack of consent.

You can add your spam complaint to ACMA’s ever increasing list simply by forwarding spam-SMS to 0429 999 888 or emails to the Spam Intelligence (oxymoron right there) Database at report@submit.spam.acma.gov.au. Unfortunately that isn’t going to solve the problem. Of all the complaints received, only about 1 investigation per month gets finalized. An average of only 570 informal warning letters per month are sent out to offenders. Since the beginning of 2015, ACMA has only taken formal action against two companies – Club Retail and GoDeals. Club Retail has been required to establish a double opt-in system for adding people to their email lists and GoDeals have been warned to ensure their unsubscribe system does work and people who unsubscribe don’t continue to receive their emails. Under the legislation, ACMA can issue informal warnings, formal warnings (which require a business to take action in a specified time-frame, or else), enforceable undertakings (the alternative to being fined), infringement notices (fines) or start court action. Fines can be as high as $1.7 million for repeat offenders. What this means for your inbox? Unless the company sending you spam SMS or emails is doing it at a high volume and there are lots of complaints to ACMA, or they have a big enough business to make it worthwhile to threaten them with fines, your most effective course of action is to mark the email as junk mail, block the sender and hit delete. So, how can you tell whether an email is Spam or not?
how to check if email is spam, and example email from Sarah David

Junk email that is not anti-spam compliant.

Do You Know Who Sent You The Email?

If your email system shows that you’ve received an email from ‘Hugh Jackman’ you might suspect that its spam. But if you get an email from say ‘David Thompson’ or a name of someone you think you should know, then you might be more inclined to open it. Have a look at the email I received recently from Sarah and Creative AUST Pty Ltd. Sounds like someone I could know, fairly innocuous and looks official with the company name alongside. If you have any hesitation, a quick online search of the sender will bring up Facebook and LinkedIn results and a bundle of images associated with the name. If it really is someone you know, or should know, you’ll find out quickly. No time wasted in deciding whether or not to take the message seriously. I recently received an email from Jade Capital, a company that sounded legitimate and who’s email looked like something I might possibly have agreed to receive. When I searched the name of the sender, I couldn’t find any details linking them with the company. Nothing. Delete. Funnily enough a week later I received another email naming both my husband and I. So I took a moment to write back and suggest they implement some spam-compliance into their system. Things like:
  • let the recipient know where you got their name (in that case through buying another company)
  • if this is a first communication, provide an opportunity to opt-in to regular communications instead of automatically adding people in
  • clearly identify the company and its contact details
  • make sure the sender is identified as part of the company, particularly if it is a sales manager or other person who might not appear in the ‘About Us’ page of your website
  • ensure you have an unsubscribe facility on the email
It was a useful conversation, for both of us.

Does the email address match the Sender Name?

The first thing I check is whether or not the email address next to the name is even remotely related. In this example, the alarm bell starts ringing immediately because the email is a fairly stock standard gmail address rather than a proprietary site address. What is worse is if the email address has absolutely no relation the name of the sender, like dgirl49@weirdclub.com *ding ding ding* Depending on what email system you are using, you might also be able to hover over the email address of the sending and check the hyperlink to see that the listed address and the actual address are the same. This is easy in Outlook but not straightforward in Gmail. If it the hyperlink is different – delete.

Who was the email addressed to?

If your name or one of your usernames appears in the salutation of an email, there is a good chance you signed up to receive communications somewhere along the line, even if you don’t remember it now. If the name is just what comes before the @ in your email address, it could either be something you signed up for, or it could be spam. It is possible that your email address was picked up by a robot scraping email addresses from different sites across the internet. If the salutation is generic, ‘Dear Friend/ Business Owner’ or simply ‘Hi/ Hello’ or no salutation at all, then there is a higher chance that it is spam.

Is the company sending the email legitimate?

DO NOT click on any links in the email. That is possibly the quickest way to get a virus into your system. If you want to check a company, open a browser and search it! I have seen some rather clever operations that have established company websites to support their scamming emails, but they are relatively easy to spot. The language on the site tends not to read well and other search results don’t tend to support the business details. You may need to do a little digging with international companies. If appears to be a registered business and I’m really not sure, I would generally check government sites like the Australian Securities and Investment Commission (ASIC) and the regulatory site for checking Australian Business Numbers. It depends on how obvious the fake is. In this example the company name looks a little unusual and an ASIC organisations and business name search doesn’t show an exact match

Are contact details listed?

The quickest way to check a company out is to call a telephone number listed in their email. If it is a legitimate business and you get through, at least you know. They might even appreciate the feedback that their emails look like spam. Next check the address. In this attached email you can see that headquarters are identified as a Sydney address. A quick search of the address shows that it doesn’t even exist. Yes, there is a Foveaux Street in Surrey Hills, but there is no number 30. At number 28 there is a college listed, and then another business from number 38. Any legitimate company will include an appropriate address in their emails. If the address is not real, the company probably isn’t either. Just be aware that in Australia the use of PO Boxes is legitimate and accepted. In the US, their anti-spam compliance seeks a street address. For a lot of small businesses set up by people working from home, that just didn’t work, so there are companies in the US that provide bulk site addresses rather than proper street addresses. So this search might not give you a definitive answer.   And if you are still worried about whether or not the email you’ve received is legitimate? Perhaps you should ask yourself how the message helps you in your business and whether or not it is worth your time. If it is potentially an incredible lead, or something you do want to follow up and you continue to be concerned, we can help investigate further. For more information on working with us to protect your online business, please contact-us or book a short advice strategy session.

How can Onyx Legal help you?

What Should I Do When a Client Won’t Pay?

What Should I Do When a Client Won’t Pay?

What Should I Do When a Client Won’t Pay?

Any business, whether it is online or otherwise, will inevitably run into a situation where a client refuses to pay a debt owed to your business. How you respond may depend on the amount of the debt, type of debtor and specific regulations in the State or Territory in which you are seeking the money.

Some people have great difficulty asking for payment, even though they know the money is owed. If this is you, create a process that you can follow, or delegate to someone else to follow, to avoid the emotional hesitation attached to asking for money.

You might create a fictional admin person in your business with their own alias and email address and use that identity to follow up payment if it is confronting for you to do it by yourself. If you use a system like Xero or MYOB, you should be able to set up automated reminders in that system so you don’t have to do it manually. 

Although the process varies, the general outline for collecting on money owed is as follows:

1. Follow up

A quick, non-judgemental phone call might be your quickest way to get paid. It is possible that someone has simply forgotten to pay your invoice.

Follow up with a polite reminder within seven days of the overdue date. If you get no response, you can either call to ask about when the debt will be paid, or follow up with a slightly less friendly reminder.

Keep a record of all communications, whether via email, post or telephone. If reminders and phone calls don’t get a response, persist with a more personal form of communication, like a phone call. 

2. Letter of Demand

Whether you are seeking to recover a debt from an individual or from a company, start with a Letter of Demand. The Letter of Demand states that the company or individual has until a certain date to pay the debt. It also explains that failure to pay by that date allows you to initiate legal proceedings to collect the debt (usually without any further notice). The Letter of Demand is the customer’s last chance to pay on the debt, and it shows the court that you attempted to collect the debt before going to court.

3. Statutory Demand

If the debtor is a company, a Statutory Demand can be used if the company owes more than $2,000. The Statutory Demand gives the company 21 days to pay. You must make this type of demand to trigger the appointment of a liquidator or administrator to the winding up of the company if the company fails to respond within the 21 days. A Statutory Demand is a specific legal form and if there is no response, means that the company is presumed insolvent. You will need legal help to manage the specific legal requirements of this process. You don’t want to start out and get it wrong. There are very specific rules and time frames involved in that process.

Once the time limit on a Statutory Demand expires, that demand stays in place until the debt is paid and you can use the failure to respond to start court action to wind up the company. The whole process of getting to hearing of the application costs upwards of $7,000 on average and there is no guarantee that you will recover the funds you owed on top of that cost. So think carefully before starting this process.

4. Going to Court

If the customer does not respond to your demand letters, then the next step is to initiate legal proceedings. These proceedings vary a great deal depending on the type of debt and the debtor. Please contact us to discuss you situation.

5. Collecting on a Judgement

If you have won in court, you probably won’t just get paid. You are more likely to need to take steps to enforce your judgement. So, where the Court has made an order that the other party pay you an amount of money within a certain time frame and they don’t, you have to go back to the Court to take further steps to make them pay.

Your customer might be ordered to attend court and explain their financial situation and why they haven’t paid.  It is possible to get an order that a sheriff seize your customer’s property and sell it to pay you, although this is uncommon.  The court could also issue an order where the customer’s funds (including wages) are garnished and given to you instead—this includes accounts payable if the customer is a company.

REMEMBER: ALWAYS KEEP GOOD RECORDS OF ALL COMMUNICATIONS AND ANY PAYMENTS THAT ARE OWED TO YOU TOGETHER WITH ANY STEPS THAT YOU TAKE TO ATTEMPT TO COLLECT THE DEBT. THESE RECORDS WILL BE HELPFUL SHOULD YOU NEED TO USE THE COURT TO COLLECT ON A CUSTOMER DEBT.

How can Onyx Legal help you?

For debt recovery we usually recommend the ‘CollectMore App’, which you can purchase for around $6.99 on iOS or Android. That App includes processes for debt recovery and a series of templates all written by a debt recovery expert whom we know and respect.
We don’t profit from this recommendation, we simply believe it provides you with an inexpensive option that is immediately available.
If you don’t want to do it yourself, we can also review your circumstances and write a specific letter of demand and follow up the debtor on your behalf.