1st thing to consider when BUYING/ SELLING your online business

1st thing to consider when BUYING/ SELLING your online business

1st thing to consider when BUYING/ SELLING your online business

When you buy a business you need to understand if you are also buying the intellectual property 

What we’d like to talk to you about today is why copyright makes the online world a more interesting place. I know that’s difficult for some people because there’s a lot of people out there that say, “Hey, I can find it available for free. Why should I have to pay for it?

Well, copyright started originally to protect the people who create education and entertainment for us to encourage them to continue to do so. You can imagine that if people didn’t receive an income for creating the things they create, we probably wouldn’t see a lot of them. Think about the big movies, touring musicians or best selling books for example.

Another thing about copyright is that there’s no copyright in ideas.

Consider this – there are an awful lot of videos, TV programs, movies about zombies. That’s because zombies are not a protected idea; it’s just a concept.

There is however, copyright in each motion picture, the script behind each motion picture, the music that goes with the motion picture, the stills that can be created out of the motion picture.

All of that kind of information attracts different rights under copyright.

There’s a whole lot to this topic, and we do want to share a lot more information for you, check out or article about using copyright material, but that’s enough for today. 

How can Onyx Legal help you?

Do you need heads of agreement or a contract for buying an online business or selling an online business? Does it cover copyright materials or other intellectual property? There are lots of basic templates around that simply do not protect your interests. If the transaction involves more money than you can afford to lose, contact us to help with your contract and the transaction.

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.