It can take a long time to build a successful website, but no time at all to sell it. Kristopher Jones started off with a hobby and after years of building a leading affiliate marketing network and landing on the Inc. 500 list, he was able to tell to his ideal buyer. His advice—create a short list of who you would sell your business to, even if you selling isn’t on your radar. He also shares more of his advice with Plan for the Sale, an interactive, online educational tool strategically tailored to prepare entrepreneurs for the possible sale of their businesses.
Jones started off selling his grandma’s famous spread, PepperJam, online with his brother. Once more and more people started to strategically use the Internet, he learned how he could make money from his acquired talents.
“What I found was that while we started to sell our gourmet food product, that what I really started to figure out and get excitedabout, was how I could build a business, outside of a gourmet food company to basically help monetize web traffic and make money online,” says Jones.
In 2009, he sold his matured site to GSI Commerce, which was later attained by a web giant, eBay. A few companies confronted him to sell, but he always hoped his buddies at GSI would be interested in PepperJam ownership.
“So, we were aware of these guys. In the back of my mind, as we were building PepperJam Network,” says Jones, “I always thought to myself, ‘How am I going to close a partnership with this company?’”
Out of his artillery of advice, Jones recommends making a short list of ideal buyers. He is a professional sales consultant with other tricks he shares with Plan for the Sale. His experiences selling to GSI started his skills in forming employee and post sale agreements. He had two goals for his PepperJam team—to make sure they were taken care of by their new boss and to share some of his payout with them. His experience positively impacted his employees, who are still employed by the new owner.
“We were able to help them identify key players and make sure that those key players were taken care of, everything from stock and salary bumps, and titles and stuff like that,” says Jones. “We made sure.”
GSI was publicly traded, but Jones had full ownership of his venture. This helped for a smoother sale transition. He didn’t need the help of an investment banker.
“Even though I didn’t end up having a banker sitting at the table when we sold to GSI, I actually very strongly recommend to friends who reach out to me because I’ve done it, built and sold my company. I have friends reach out to me quite often and ask me that. Here’s my advice. My advice is to find a very, very reputable banker, like at RBC Capital, who works on a performance basis so you’re not taking cash out of the company to pay for them — they take a percentage of the deal — and bring them on board,” says Jones.
Experiencing the due diligence process with a publicly traded company emphasized professional assistance. He learned that outside help can improve valuation results. A sales team can help you organize your books and know every aspect of their pages. Some important players are third party auditors and appraisers. Building a company based on good books is key. Most Plan for the Sale users are doing just that—planning for a sale. They need to know what they can do today to be ready for a future sale.
“If you’re building a company and you anticipate potentially selling it one day, there’s a right way to do things and there’s a wrong way,” says Jones.
He officially phased out of his site’s operations in 2010, which allowed him to focus on building other business opportunities. Jones created his angel investments firm, KBJ Capital, and also start ReferLocal.com. Learning from experts like Jones shows other businesses owners what they could do today to plan for a fast and profitable sale later in their business’ life. Visit Plan for the Sale to hear more sales stories.
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