If you have advanced along the business acquisition process to the point of contract signing and funding escrow then it’s likely your attention will be focusing upon the practical challenges of transferring an online business. There are many components to an online business and buyers can often be caught off guard by the logistics when the process begins. As with many things in business, preparation is key. Below we summarise the key parts in transferring an online business with best practice guidance on how to smoothly execute on each one.
Transferring Online Business Ownership: The Complete Checklist
Domains & Hosting
Domain(s) – If the domain is being transferred to you, be sure to set up an account with the same registrar that the seller is currently registered with. This will significantly expedite the domain transfer (from days to minutes). If you have a preferred registrar you can always transfer the domain later on your own time. Make sure the seller chooses the option to ‘keep nameservers the same’ to avoid a nameserver reset and downtime on the website during transfer.
Hosting – All buyers have their own preferences when it comes to hosting arrangements, the key is to ensure that the planned new hosting environment has the same or more power than the current setup. Often it can be easiest to open an account at the same hosting provider as the seller (to facilitate an intra-host transfer) or take direct control of the seller’s account if they agree to it. If the seller is facilitating the transfer, make sure they know what the new hosting arrangements are. In a heavy hosted environment (e.g. SaaS businesses) it is usually advised that the buyer inherits the existing infrastructure rather than attempt a migration of hundreds (or thousands) of users.
Email Lists
Most major email management tools (e.g. Aweber, MailChimp) are very flexible with transferal of email lists so be sure to create an account with the same provider and get the seller to push the list(s) over.
Accounts
This is where some buyers fall down in their preparation. In general it is good practice to take an ‘account audit’ with the seller before starting the transfer to ascertain all accounts that the business currently uses. This may include:
- Affiliate (e.g. Amazon, Commission Junction)
- Lead generation (e.g. QuinStreet, Consumer Media Network)
- Merchant processor (e.g. PayPal, Stripe, BrainTree, 2Checkout)
- Advertising (e.g. AdSense, Say Media)
- Email (e.g. MailChimp, Aweber)
- Social media (e.g. Facebook, Twitter, LinkedIn)
Once a complete audit is made, ask the seller which accounts you can take full control of (i.e. inherit) and which you need to make copies of and have the existing data transferred over. Start making preparations to open accounts as soon as funds are in escrow.
Note: On subscription-based businesses with recurring billing the transfer process can be more involved and will involve the buyer providing proof of business ownership, photo identification and proof of address.
Contact Information
Make sure you get contact information for anyone associated with the business and its day-to-day operations. It’s a good idea to have the seller introduce you personally within 48 hours of the transfer. Business contacts may include:
- Employees / VAs
- Advertising and/or affiliate account managers
- Third party developers
- Fulfillment center and drop shipping partners
Other Items
Often there are some miscellaneous bits and pieces that can be forgotten in the transfer. Below are a few that have cropped up in transactions with FE International that are worth thinking about if relevant:
- Toll-free telephone number(s)
- Contact information for old business partners
- Unreleased products or services (included in the sale)
- Details of growth plans (if mentioned)
- Past clients
On e-commerce businesses it is often the case that the buyer will be inheriting inventory so you should take care with details of storage etc.
Final Thoughts
If you’re taking over an online business of five, six or seven-figure scale then it’s very likely there will be tasks to take care of from day one of ownership. Make sure you understand from the seller exactly what tasks are required for the first 72 hours of ownership, how they are done and who has responsibility for them. This will ensure business continuity during the transfer process and minimise any disruption to the business’ operations. Asking the buyer to prepare a detailed operating manual often saves time for both parties and avoids the need for continued questions or reliance on the seller post-sale. As a buyer, always ensure you are comfortable with everything provided and make the most of any (ideally pre-negotiated) support the seller has committed to.
At FE International we provide all buyers with a Handover Manual for the business which will instruct on the above issues and help anyone to transfer business ownership and operations smoothly.