Situation: A company has a domain name that they no longer use. They have been approached by a domain reseller that wants rights to sell the name for a percentage of the sale price. The reseller is talking big money for the name. What are the best options for selling a domain name?
Advice from the CEOs:
The offer may look interesting, but you want to compare it with other options. These include Godaddy.com or buydomains.com. Compare both the price for selling the name and the estimates of what the domain name is worth. Look at how each would market the name, and their record for selling names. Compare their responses with the offer from the reseller that contacted you.
Get an appraisal on the name. Valuate.com offers a free tool to appraise a domain name, or you can look at GoDaddy for assistance in valuing your domain name under their Support section.
Have a contract attorney look at the reseller’s contract for hidden traps.
Get references from this reseller and check them out before signing anything.
If you move forward, make sure that you choose the escrow company. One CEO recommends Escrow.com for domain name sales.
Situation: As business improves the Company needs to manage cash flow to support growth. How are you managing your cash flow in the recovery?
Advice from the CEOs:
This is a common challenge following a down period. You’ve reduced personnel and used up cash reserves to survive. As demand resumes, you may need to add resources as you increase production. It’s important not to let accounts payable get ahead of your receivables.
Ask customers for deposits on orders – giving you up-front cash. Give priority to those who do.
Redesign the work flow:
Add independent contractors on a project basis.
This requires good cost estimates and well-defined deliverables.
Work with your bank and Line of Credit:
An LOC should cover 1-3 months of operation.
Ask for a lot, and shop different banks for favorable lines and rates.
An LOC is a short-term obligation whereas debt may be long term. Watch your debt covenants for restrictions on obligations to assure that you stay in compliance.
LOCs are frequently Prime plus 1-2%
If you have a broker, see what rates they will offer on a business credit line to keep your brokerage business.
The best alternative is to plan ahead and develop a strong relationship with your banker – including a reliable credit history – so that when need arises, the banker will help you based on your past performance and the confidence that they have developed in you and your operation.
Key Words: Cash Flow, Recovery, Growth, Deposits, Contractors, Project, Estimates, Deliverables, Line of Credit, Bank, Covenants, Credit History