5 Keys To Selling An Internet Business

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selling an internet businessIf you had the foresight to create an online company years ago, you are likely ahead of the curve. According to Nasdaq, it is estimated that 95% of purchases will be through eCommerce by 2040. That means investors are motivated to get involved with eCommerce and internet business sales are booming. But what do you need to know when selling an Internet business?

The bad news is that a significant number of business sale transactions fall apart before closing. If you are considering selling your online business, it’s important to get informed so that you can maximize your profits and minimize risk.

Here are the top 5 things you will want to know when selling your online business:

1. Prepare your Internet business for sale

Before you publish your sale or start working with a website sales broker make sure your online business is actually ready for sale. Ensure you have written business contracts in place with key employees, suppliers, or contractors so they will remain with the business after the sale. Also make sure your intellectual property, spam, and privacy policies enable you to legally transfer information to the third-party purchaser. Have a professional look over (and supplement, if needed) your financial and tax information because you will need to divulge accurate and thorough financial information to potential buyers.

2. Determine your desired outcome

There’s more to selling an Internet business than simply deciding on a selling price. Determine how you would like to be paid (do you want to be paid a lump-sum or in installments?) and whether you will provide financing for the sale. Also, do you intend to stay with the business as a consultant or employee after the sale? If so, determine how long you plan on staying and what you want to be paid for your time (above and beyond the website purchase price).

Related Article: Sell An Internet Business – How To Avoid 3 Costly Mistakes

Do not make the mistake of offering ongoing consulting services without a solid agreement governing the terms of your consulting. Many internet business owners get stuck doing free work 90 days to a year post-sale just to keep the business afloat until the buyer is up to speed. You can avoid that.

3. Conduct a pre-sale legal compliance review

You will want to ensure your website is not violating any intellectual property, spam, or privacy laws before you even consider posting your business for sale. Legal issues in the business will reduce the value of your business, or worse, prevent a sale entirely.

4. Use the right professionals

There are plenty of well-versed professionals with respect to selling traditional brick & mortar businesses, but selling an online business is not the same. You will need to work with a professional with specific knowledge and experience in eCommerce business sales. An Internet business lawyer can help ensure you have the appropriate legal documents and field questions from potential purchasers to bring your deal to the closing table while minimizing risks.

5. Protect yourself against risks

Selling any business carries certain risks. Sometimes competitors act like a prospective buyer in order to gain confidential business information that they will use to compete with your business. Be wary of frivolous prospects by carefully reviewing letters of intent and seeking the advice of experienced internet business counsel. You also want to be cautious of contracts and legal documents provided by potential buyers, because those documents will be written in favor of the buyer, not you!

Also, if you plan on financing part of the sale, make sure you secure that part of the sales price with collateral to minimize the risk of nonpayment. Without collateral, it may not be financially profitable for you to pursue legal remedies in the event of nonpayment. By securing your financial agreement with collateral, you are protecting your ability to collect if issues arise.

While these are the fundamentals to selling an internet business, you will want to perform due diligence and learn as much as you can about this online business transaction process to ensure you get maximum value.

Do You Need Help Selling An Internet Business?

If you have a motivated prospective buyer and time is of the essence, it will be worthwhile to contact an experienced attorney right away. Attorney Young helps entrepreneurs sell their eCommerce business for a fair price while reducing your legal risks. If you are ready to sell your Internet business or simply want to learn more about the process, schedule a phone consultation with Attorney Mike Young and he will help you develop a road map to ensure you get what you want from the deal.

4 Secrets To Effective Search Engine Marketing Agreements

By | Business Contracts, Business Lawyer, Internet Lawyer | No Comments

search engine marketing agreements lead generationMore than 80% of shoppers do their research online before deciding which business to work with. As a business owner, you know you need to take advantage of search engine marketing (SEM) for lead generation so that potential clients can discover your business. A solid SEM strategy can help clients find you and can set you apart from your competitors. However, this type of marketing is complex and requires specialized knowledge. Rather than wasting hours learning and tweaking your own SEM strategy, it’s a wise business decision to outsource this important task to industry experts. This is where Search Engine Marketing Agreements become a necessity.

Like other business agreements, a written SEM contract is important for protecting your legal rights while reducing the likelihood of misunderstandings that lead to nonperformance and breach of contract. Here are four things you should know about SEM agreements before you start negotiating with a SEM agency.

1. Don’t assume free online templates will work for you

Internet Business Lawyer Mike Young has worked with numerous online businesses over the past 25 years and seen countless contract mistakes. One of the biggest and most common mistakes business owners make is using a free contract template found online. Because many free templates are not written by an experienced Internet attorney,they fail to address important topics that leave your business at risk. Even worse, none of the free templates you find online are written in your favor, based on your specific needs.

2. Don’t borrow someone else’s agreement

Another common mistake is to copy and paste someone else’s search engine marketing agreement you’ve found online. If you have not been given explicit permission to copy someone else’s contract, you may be committing intellectual property theft. Also, while contracts may look similar to the untrained eye, all contracts vary according to a party’s specific needs. Every contract is (and should be) unique. When you use someone else’s agreement, you’re using a contract that made sense for them, but that does not mean the contract will work for you or your business. The description of services, payment terms, intellectual property ownership, and warranties will vary in virtually every contract. Simply copying and pasting someone else’s agreement will not ensure that your business is protected from risks or that your expectations will be met.

3. Don’t forget the basics

There are some basic provisions you will want to include in every search engine marketing contract. You want to make sure you identify both parties to the agreement plus their contact information. You want to define the term (length) of the contract and whether any renewals will occur automatically. The services being provided should be described in detail along with the payment terms. You will also want a contract that clearly outlines how and when the agreement can be terminated for non-performance or other disputes.

4. Protect yourself from special risks

Marketing content and strategy are both considered intellectual property. It is important to address who owns the intellectual property created as a result of your search engine marketing agreement. The agency you choose to work with will likely want to maintain some form of ownership over their work product, but you may want to ensure you have a right to re-use certain marketing phrases if you decide to switch to another SEM provider. You’ll also want to ask if your SEM agency will be using any subcontractors or relying on any third-party services and discuss what will happen if their subcontractor or third parties make a mistake. Their answers to these questions should be committed to writing in your SEM contract to protect you in the event a dispute arises.

Likewise, you will want to include a dispute resolution clause that details how you will handle any disagreements (will you arbitrate or mediate before going to court?) and where you will handle any disputes and what laws will apply (preferably the laws of your state). Also, address warranties if your SEM agency plans on guaranteeing any results (be wary of guarantees if the agency does not want to confirm their promises in writing).

Lastly, determine who will be liable for the work product, especially in the case of intellectual property theft or infringement-you definitely don’t want to be held liable if your SEM provider uses someone else’s intellectual property.

As you can see, your SEM contract should be unique and tailored to your specific needs. While there are a number of clauses all SEM agreements should include, the terms of those clauses will vary according to your needs and expectations.

Do You Need Help With Search Engine Marketing Agreements?

An experienced business contracts lawyer can prepare a customized SEM contract template for you to use on one or more SEM projects. You can get an SEM agreement prepared by Attorney Young for a flat fee as part of our firm’s Business Contract Legal Protection Package.

Does Your Texas Gym Collect Member Biometrics?

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texas gym member biometrics collectionDo you own a fitness center in the Lone Star State? Then you’ll want to know about state law protecting Texas gym member biometrics.

4 Biometric Identifiers

There are four types of biometric data protected by Texas law:

(1) fingerprint;
(2) retina or iris scan;
(3) voiceprint; and
(4) record of hand or face geometry.

3 Popular Texas Gym Member Biometrics Uses

Some Texas fitness facilities are using biometrics for one or more of these member services:

(1) providing late night access to the gym when there aren’t employees working;
(2) tracking member location and fitness activities; and
(3) enabling members to easily make purchases of clothing, sports drinks, etc.

How Does State Law Protect Texas Gym Member Biometrics?

Texas law requires gym owners to notify members that biometric identifiers will be collected/used and obtain member consent to do so. The data must be kept confidential, cannot be sold to third parties, and has to be promptly destroyed when it’s no longer needed (e.g. membership ends).

Related Article – 7 Things You Must Include In A Texas Gym Membership Contract

What About Gym Employees and Non-Member Guests?

The Texas biometrics law also covers collection and use of employee and guest data too. However, it’s relatively rare that fitness centers collect biometric identifiers from guests.

Related Article – Does A Texas Martial Arts Studio Have To Comply With The Health Spa Act?

Do You Need Legal Help?

Of course, in addition to state biometrics laws, there’s also the Texas Health Spa Act that gym owners have to be concerned about.

If you own a Texas gym and need help with your membership agreements, waivers, or releases, set up a phone consultation with Business Lawyer Mike Young today.

3 Things You Should Know About Texas Gym Membership Agreements

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texas gym membership agreementsDo you own a fitness center, gym, or martial arts studio in Texas?

If you’ve answered, “Yes” then you need to protect your business (and yourself) from unnecessary fines, penalties, and lawsuits with proper agreements. You may not know it, but Texas strictly regulates the fitness center industry. Whether you own a health club, fitness center, gym, or martial arts studio, your business must comply with the Texas Health Spa Act.

1. What You Need to Know About the Texas Health Spa Act

The Texas Health Spa Act is a consumer protection law designed to minimize risks for gym members and prevent the use of shady sales tactics. While you may not consider your business a “health spa” this law applies to all Texas businesses that offer memberships for instruction in or usage of a facility for physical exercise.

The penalties for non-compliance with the Act are nothing to take lightly. Not only does the Act allow for civil penalties (including actual damages, equitable relief, punitive damages, attorney fees, and court costs) you can be charged with a Class A misdemeanor! You can also face an investigation, lawsuit, and penalties with the Texas Attorney General — something that could destroy your business and personal finances.

Depending on statements made in your marketing materials and sales pitches to potential members, you could also be liable under the Texas Deceptive Trade Practices Act. All of these risks are on top of the threat of losing your state gym registration.

There are a number of requirements you will need to implement in order to comply with the Health Spa Act. First, you will need to register your gym with the State and you may need to post a surety bond. Then you need to ensure all members sign a written membership contract. These membership agreements must contain highly specific statutory language. This language is discussed in item #3 below.

2. The Types of Contracts You Will Need to Protect Your Business

To comply with state law and protect your business interests, you will need more than one type of gym contract. You will want a standard membership contract that complies with the Health Spa Act, as well as a Waiver, Release, and Assumption of Risk Agreement that protects you from member lawsuits. Because exercise always involves some risk of injury (especially if your member is not using the equipment properly) you want to protect your business from unnecessary personal injury lawsuits.

You will also want your members to sign a Media Release if you plan on taking before/after photos or any pictures of your gym/studio “in action.” Chances are you will want to include images in your marketing materials, so you want to ensure you have the appropriate permission from members to use their photos in any capacity. If you use personal trainers, you may even need a personal trainer contract as well between your business and your trainers (and possibly between the personal trainers and your members).

3. What You Need to Include in Your Texas Gym Membership Agreements

The Health Spa Act is lengthy and highly specific. Fortunately, there are some common fundamentals that will apply to most gym and martial arts studio owners.

Your membership agreement must state the term (or length) of the contract and Texas law prohibits terms in excess of 3-5 years (the term caps differ based on whether membership is financed through a retail installment contract).

You must also permit cancellation and detail the procedures for cancellation using the appropriate statutory language and provide for refunds under certain circumstances. This should include an option for members to cancel within three business days of signing the agreement and outline how refunds will be handled in the event of gym closure or the death/disability of a member.

If you pass finance charges on to members, you must outline these charges in your contract and include statutory language regarding a member’s legal claims and defenses. You also must provide a comprehensive list of all available membership plans upon a member’s request.

Last, but certainly not least, if you are pre-selling memberships prior to the grand opening of your fitness center, you must include language in your contract about the member’s rights if the gym doesn’t open or closes within 30 days.

As you can see, free gym membership contract templates you find online could put your Texas gym (and you personally!) at risk. Contracts that work for gyms in other states likely won’t comply with the Texas Health Spa Act. Plus you could run into intellectual property theft issues if you copy other contracts without appropriate permission.

Do You Need Help With Your Texas Gym Membership Contracts?

If you are unsure if you’re following Texas law or need gym membership agreements drafted for your business, it makes sense to discuss your options with an experienced business lawyer. Schedule a phone consultation with Attorney Mike Young today to ensure your gym or martial arts studio is protected.

4 Things Every Business Owner Should Know About Digital Marketing Agreements

By | Business Contracts, Business Lawyer | No Comments

digital marketing agreementsDigital marketing is essential for reaching potential customers in today’s market because more than 80% of shoppers do their research online before deciding which business to work with. The good news is that digital marketing tends to be less expensive than traditional advertising and is more effective: providing your business with a high return on investment. The not-so-great news is that digital marketing is complex and you will need to work with a professional to see any real results. And that’s where digital marketing agreements become relevant.

However, before you jump into a relationship with a digital marketing consultant, there are a few things you should know:

  1. what digital marketing entails;
  2. what digital marketing risks you should avoid;
  3. what a digital marketing contract should include; and
  4. how to maintain a symbiotic relationship with your digital marketer.

1. What is Digital Marketing, exactly?

Digital marketing is an umbrella term that actually covers a multitude of different online marketing strategies. Your website is the foundation of your digital marketing strategy because it is your online storefront and will most likely be the first thing your potential customers see. This means the design of your website is a key component of your digital marketing strategy. Once you establish a website that’s optimized to attract and convert clients, you can dive into other forms of digital marketing. Content marketing and search engine marketing are two forms of digital marketing that will help your website rank high on search results. Social media and email marketing are ways to interact with and engage your ideal clients. Beyond that, marketing automation, inbound marketing, and affiliate marketing are more advanced (and more technologically-involved) ways of streamlining and enhancing your digital marketing efforts.

2. What are the Risks of Digital Marketing?

Like virtually everything in business, digital marketing comes with its own unique set of risks. Fortunately, you can avoid these risks with a little proactive planning. When you start working with digital marketing professionals you want to be careful not to use someone else’s marketing agreement. If you simply use the agreement provided by the digital marketing agency, you could be setting your business up for disaster, because their contract will be drafted to favor the marketing agency, not the interests of your business.

Even worse, using a digital marketing contract you haven’t paid an attorney to create specifically for you might mean you’re stealing someone else’s intellectual property. Yes, contracts are considered intellectual property, so copying a contract you haven’t paid for could land you in hot water legally and financially.

3. What Business Owners Should Include in a Digital Marketing Contract

Unless you choose to work with a digital marketing agency that handles every type of digital marketing, you will probably end up using multiple business contracts with different digital marketing professionals. It’s not uncommon to have a separate website design agreement, a content marketing agreement, a search engine marketing agreement, and a social media marketing agreement with different, unrelated professionals. In this case, you’ll want to have a sound template to use for all your digital marketing needs. While the scope of services, deadlines, and payment structure will vary from contract to contract, you’ll want to ensure each of these topics are clearly detailed in your agreement.

Related Article: SEM Contract – 10 Search Engine Marketing Agreement Essentials

You also want to include the term of your contract (how long will they perform the work, for a month? A year?). And how renewals will occur (will your agreement automatically renew each month unless you cancel, or will you need to personally renew your contract at the end of the term?).

Do not forget to discuss how you will resolve disputes (will you mediate or arbitrate disputes to avoid court? Which state’s laws will govern your agreement?) and how to cancel the contract if you are dissatisfied or choose to switch to another provider.

Clarify ownership of intellectual property that is created as a result of your contract (make sure you retain ownership of the design elements in your website; any blogs created for your business; and any marketing language used). Have a plan in place for how you can retain intellectual property even if you cancel your contract and switch to a different marketing professional. And last but not least, detail any warranties, defenses, and indemnification. Make sure you are protected in the event you get sued over copyrighted content used by your marketing professional!

4. How to Maintain a Symbiotic Relationship with Digital Marketing Professionals

The first step toward creating a mutually beneficial relationship with a digital marketing professional is to clarify expectations with a solid agreement. Most disputes can be avoided with proper planning and up-front discussion about what you are looking for in the relationship. Beyond that, a good business relationship needs to be built on quality results.

Related Article: 5 Things To Avoid In An SEO Services Contract

The good news is that it is relatively easy to track and measure the results of digital marketing efforts. This means you’ll want to speak with your consultant about how they will share their work product and metrics with you (and how often). By keeping an eye on your digital marketing metrics, you will be able to maximize the return on your investment: and a high ROI is good for the growth of your business.

Do You Need Digital Marketing Agreements for Your Business?

If you need a digital marketing agreement, you’ll want to speak with an experienced business contracts lawyer who understands online marketing. We help business owners craft agreements that protect their legal interests for flat fees so there are never any unexpected costs. To learn more, check out our Business Contract Legal Protection Package.