So, you are selling a website, you received an offer and have entered the due diligence stage. You’re home free now, right? Wrong! We have seen many deals fall apart due to the carelessness and laziness of a seller.

One of the main reasons a deal falls apart is the target internet business’ weakening financial performance. When a buyer puts in an offer and then sees the website’s revenues drop a considerable amount from the previous months, he will not surprisingly get cold feet. A large part of an internet business’ value is based on earnings stability and consistency. Thus, when the website’s numbers are off materially from recent months, the business naturally loses value. It is for that reason that we always advise our sell-side clients to continue working and growing their businesses as if they weren’t selling it.

Another major reason that a deal doesn’t get from due diligence to the closing table is inaccurate financials. A seller is only fooling himself if he provides erroneous financial numbers for the business. The buyer will due his homework to verify the accuracy of the stated financial performance. The last thing all parties want is a surprise popping up during this stage. Surprises lead to a lack of trust, and a lack of trust will likely kill a deal. This is easily avoidable as long as you take your time retrieving the correct information from your bank statements, merchant account statements, Adsense statements, etc. Therefore, when your internet business broker requests your financial performance it is important to provide him with precise numbers as he will not only be basing his free website valuation on these numbers, but will also portray them in his prospectus.