Buying and Selling Adult Sites, Part 11

Last time we discussed how to determine the value of a website, how to negotiate the sale and how to get to the point of drawing up an agreement. So, now you’re talking to your attorney and you’re having them draft an agreement. What should be in it?

Well, your attorney will guide you through the legal side, but here are some considerations to keep in mind from a buying standpoint:

What is the date you’d like to close? Make sure you know that you’ll have the money to either pay the deposit, if there is one, or the entire amount of the purchase by that date.  I’ve had buyers who aren’t ready and that just causes issues.

Make sure that all the assets you’re purchasing are in that agreement. Make sure you include details like a list of every domain included in the sale, information on the processing and payment accounts, information on relationships with vendors, all records including age verification records for 2257 compliance, license information on software to run the sites and any other assets and details concerning them as needed, such as ownership of the source code for the sites, if applicable.

Of course, these agreements should spell out any payment schedule in detail if there is one. Most deals are all cash at the time escrow closes, but some deals are done with the seller providing some form of financing of the balance after the down payment is made.

The agreement should also address questions like who’s responsible for closing costs, such as paying for escrow? In most cases it’s the buyer, but escrow can be paid by the buyer, the seller or split between the two parties. If applicable, be sure to establish what the seller’s participation will be after the sale.

Remember: everything is negotiable, so don’t leave anything in a ‘state of assumption’, so to speak. Iron out every detail you can think of, to prevent any confusion or misunderstandings between the parties after the agreement has been executed. Plus, there are always terms that are unique to yours and the seller’s situation – and those unique facets of the deal must be addressed in the agreement, as well.

This all assumes you’re the party responsible for drawing up the agreement. If the seller is drawing up the agreement, then it’s important that you express all of this to your legal representative(s) so they can check the seller’s agreement and see if any changes are necessary. Having a good adult industry attorney, someone who is experienced in the adult market and has a good understanding of the issues involved that are specific to adult sites, is a must.

So, escrow closes, and you own the website. What do you do now?

The first thing you should do is make sure you understand everything about the operation of the site. The previous owner will hopefully be available for a while to help you with this.

As I mentioned above, you should establish in the agreement what the former owner’s participation will be after the sale.

You’ll need to deal with production of new content, processing, paying affiliates and many other things.

If you don’t have experience in these things, you may want to consider our general consulting firm Adult Business Consulting. You can get more information on what this company does at AdultBusinessConsulting.com.

Through AdultBusinessConsulting.com, we help website owners project manage and guide them to the right vendors. Maybe the previous owner had all the right elements, processing, hosting, payments, production, scripts, etc. – or maybe they didn’t. We can help evaluate that for you.

Once it has been executed, now you are operating the website and you’ll be facing a whole new set of challenges. If you don’t have someone like our general consulting company to help, conduct your own rigorous evaluation of all the items and questions above, including an evaluation of everything on which the site is spending money and everything the site is using to operate on the back end.

Make sure you’re getting a good deal and that the companies involved are providing the right services, at a good price – and check to see if you can do better. Hosting is a great example on something where people are often both overpaying and not getting the right service. Many times, the server is just too slow.

If you have any questions about anything covered in this article series, feel free to reach out to us on our website. To contact Adult Site Broker with any questions about what you’re reading here, or about buying or selling adult sites or companies, go to our contact page.