Why You Should Invest in Web Properties

Investing in websites

If I could show you how to get a 25%+ annual return on investment, would you be interested?

If you could have control over the performance of that investment, would you be interested?

Of course you would!

Please forgive the sales tactics — I had to get your attention.

I discovered a new alternative investment when I started working with Latona;s Web property brokerage. Let me just reveal that I am working in the capacity of a business analyst for Latona’s — I am not a sales rep. However, I get to look at each website that is listed by the company. I get to ask the probing questions. I get to view all the weaknesses and identify the opportunities.

And I am impressed by the potential websites have as investments.

Here are some things you need to know:

  1. Many websites make their money primarily from the advertising displayed on the site. Yes, you know websites have advertising, but did you realize how much money?
    1. I recently worked with one site that had advertising revenues of more than $1 million with approximately $800,000 left over after expenses. The site attracts more than 1 million unique visitors each month and has been chugging along very profitably for nearly 2 decades.
    2. Average sites that attract 1,000+ unique visitors monthly often earn $50,000 to $100,000+ annually with expenses lower than 10%
  2. Most websites sell for between 2X revenues and 4X EBITDA.
    1. That means your investment can pay off in 2 to 4 years, if you just maintain the status quo.
    2. Most of these Web properties can be improved to increase traffic and advertising revenues.
  3. There is a growing population of venture investors who are investing in and improving Web properties — and they are making big money.
    1. The investment benefits of Web properties has not been recognized by the mainstream — yet.
    2. The investors operate portfolios of Web properties, keeping some for revenue, improving others and then selling them at higher prices.
    3. Investors either outsource management to inexpensive offshore companies that do excellent work, or they maintain an in-house management team — usually fewer than 5 contractors for the biggest portfolios.
  4. Online advertising is growing.
    1. Here is the headline from the IAB’s October 2014 press release announcing the results of the first half 2014:

      Digital Ad Revenues Hit Landmark High in First Half — High of 2014, Surging to $23.1 Billion, According to IAB Internet Advertising Revenue Report — Mobile Jumps 76% Year-over-Year & Overtakes Banner Ads

Yes, there are caveats. Working with a reputable Web property brokerage and doing your due diligence is, as you would with any venture investment, is the best way to protect your money.

Financing is often available, but the process of buying a Web property is negotiable. Often the current owners will accept payments over time. The asking price is negotiable. The terms are negotiable.

This is a young investment marketplace, which means that there are plenty of opportunities! As mainstream investors continue to seek alternatives to bonds and stocks, they will eventually find Web properties. When that happens, these properties will become more expensive.

If you have questions about investing in Web properties, or selling your developed website, please feel free to contact me through LinkedIn.

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The Easiest Way to Go Into Successful Business – Buy A Web Property

gold bars

I am seeing the birth of an entire new industry … and an entire new investment vehicle.

Those of you who know me know that I know investment vehicles. (If you don’t know me, look at my G+ profile.)

Anyway, what would you say if I told you that I know of a solid stock that pays a 50% dividend? You would say I am either crazy or don’t know what I am talking about.

However, you can’t deny it would be a great investment if it existed.

Not so fast! Consider this …

If you buy an online store that does a reliable $15,000 a year in net income, it would require you to work a maximum of 2 hours a day, and it costs $30,000 to buy. And

  • it’s a good store that hasn’t done much SEO so there is opportunity to drive more traffic,
  • has a good size mailing list so you can promote specials,
  • happy returning customers and
  • hasn’t done any advertising and doesn’t sell ads on the site so it has undeveloped revenue sources …. well, that’s pretty much the same thing as a stock that pays a 50% dividend.

If you hired an SEO service, started an affiliate program, sold ad space and pushed it on Facebook, you would probably see an improvement in revenues and profits while spending very little money.

This is not an unusual opportunity.

And most websites sell with a small amount down and a buy-out from revenues over a certain number of years. 

That’s right.

There is a growing market in web properties and, while the market is still very young, great bargains can be had.

It won’t last forever.

Some sites are made to sell. There are lots of people out there who are creating game sites, driving traffic to them through SEO and social media at very little cost, and make fairly good money off selling ad space. Now, these aren’t much more than formula money makers but you might just be going to one of those sites to play Bejeweled for free amid ads that pay the site owner well. And the site might be for sale.

Lots of people find themselves in need of selling their websites. If you started a site that became popular, and you need money to buy a house or a car, or you have an idea for a different business or you are just sick and tired of your current blog or e-commerce site, you might just be interested in selling your site. It happens.

It happens all the time.

I can suggest a reputable place to start your self-education: Latona’s 

The reason I say “reputable” is you want to deal with people who are professional enough to turn away the websites that use Black Hat techniques to make it look like they have a lot of traffic, and I happen to know Latona’s does identify and refuse to broker those sites because Latona’s is a client of mine.  (Did you notice that was a disclaimer?)

There are some great opportunities to be found now  —  before investing in web properties is discovered by the masses.

And don’t kid yourself! There are a lot of savvy investors out there investing in multiple sites and hiring people to run them. They are making a lot of money doing this. In fact, there are private equity funds doing this right now.

I will continue to post about this subject because I believe the marketplace for websites will grow and prosper.

The Advantages of Buying a Company

The Advantages of Buying a Company

Enthusiasm and optimism are qualities most entrepreneurs share. This drives us to think we have to re-invent the wheel each and every time. Actually, finding an old wheel and just fixing it costs much less in outright costs and potential mistakes, and it frees your time and effort for the task of driving that wheel to new and exciting experiences.

Rather than try to start a business from scratch, look around to see if there is a business for sale that you can develop into a real winner!

Why All Companies, Public and Private, Should Write Annual Reports

An annual report isn’t just for shareholders.  Writing an annual report forces you to look deeply into the activities of the past year and see what worked and what didn’t. Those insights are vital to planning your next 12 months.

An annual report also creates a history of your decisions and their outcomes that can be used for future planning and dealing with unexpected problems. Being able to find an answer to a current problem by looking back through your annual reports for that similar situation you remember from eight years ago is a big time-saver and can help you dig into other records that you used to create that annual report.

This article gives you an idea of how to write a good annual report:

Simplified Structure of an Annual Report

An annual report is necessary if your company is a corporation with shareholders or limited liability company with members. Even if you have a sole proprietorship or a one-person corporation, writing an annual report can be a beneficial exercise. If you apply for a loan or hire professional services, you may be asked for a copy of your annual report. A simple document of a few pages in length is adequate.  MORE

How to Write a Vision and Scope Document

You should be doing this whether you are just starting to plan your new business, working on your plans for the new year, or preparing a presentation for funding.

Sitting down to write a vision document and a scope document helps you see holes and inconsistencies in your business activities and can give you a great new idea …

http://smallbusiness.chron.com/write-vision-scope-document-73586.html

Vision and scope documents define what your customer or company has in mind as well as describe the work process necessary to reach that vision. For example, entrepreneurs benefit from writing a vision and scope document to define their business ideas and list how to develop them into reality. Project managers use such a document to identify the expected result of the project and to set forth the methods and activities necessary to achieve that result.

Time for Caution …

A friend sent me the following chart and part of an article that claimed moderation of margin rate of change is an indication of continued rally in the S&P 500.  I added the notes in the yellow text boxes

Image

This is what I think of the claim that moderating margin debt might be an indicator of a further rise in the S&P 500 — First, computer trading has been in the market since the mid-1990s and if you look closely you can see the Crash of 1997 and the rise in margin debt as the Fed pumped money into the system. In 2000 it was the demise of the dot-coms followed by 9/11 and cautious use of margin following a peak. Well I think the peaks are retail investors and some less-than-bright hedge funds driven by greed to get into the market for what they expect to be a big rally [I feel claims of potential rally conditions are “jaw boning” – a Wall Street term for spinning things to draw in unsuspecting investors]. Right now the professionals are being careful and if the rate of margin increases, I would think that is the ‘stupid factor’ coming into the market, which signals a coming crash.
 
Look at the above chart in conjunction with another article that I believe supports what I am saying about conditions in the marketplace. CNN’s Fear-Greed Index:
 
What this all means to entrepreneurs, and anyone else for that matter, is BE CAUTIOUS.
 
 
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The Jaws of Death – Entrepreneurs Beware!

The Jaws of Death - Entrepreneurs Beware!

This is an article from Kitco everyone should read!
http://www.kitco.com/ind/Taylor/2013-10-11-The-Jaws-of-Death.html

It shows a likely stock market crash on the way, and that brings on very difficult times for everyone. In this case, on top of the most sluggish and prolonged recovery from recession I have ever witnessed, it could quite easily create a situation much worse than the Great Recession.

I know you get sick of hearing me warn about over-expanding before you know what is around the corner … well … this just might be the monster around the next corner.

I know you are also tired of me warning about taking on debt at this time, but if things look like like what this chart is showing, debt will strangle you!

And, although I no longer carry my mountains of securities industry licenses, and I can’t give investment advice, I can say that you might want to read up on the subject of “Protective Puts” if you have any investments in the stock market.