Suncoast Web Solutions

  • 10th Jun, 2014
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We are often told how important it is that you complete your due diligence when buying a business and that you need to make sure that every i is dotted and every t is crossed. Sure it makes sense that everything is double checked.

Each day, week and year we hear of terrifying stories where new business owners find out that they do not have email’s or a website after buying a new business. For some unknown reason it is one of the things that is never checked. If it is then the person buying it is generally what I would like to call “Web Aware”.

In today’s age it would seem more and more that buying a business, its stock and customer list is primary and the communication in and out is secondary but honestly it should be that stock and customer lists is secondary. The reason I say this is the first thing that you need to be able to do is communicate. If you cannot then it is one fundamental thing that can stop any business.

Last week we heard from a long term client who wanted to purchase another business (which they did) that their new business website was offline and they were not receiving emails. As a natural reaction we asked them whether they had got the domain name transferred when they bought the business. The response we got was “Sure we did. We got it when we bought the business.” From there you can imagine that is where things started to go wrong.

The truth was that they hadn’t even brought up the domain name or the website ownership side of things in the sale. The client then asked what could be done and we advised them how we could help recover and assist in the transfer of ownership. The client was clearly happy with this and rightfully so. The sad thing was that by this point the old owners had left the country and the hosting provider the old owners used would not help. This is understandable due to the nature of privacy and security.

The client was then left with no other option but to go through and contact the broker to find out if the old owner would help out. It so happens that the old owner was still corresponding while overseas with the solicitors and brokers on a few other issues. As a result the client was able to get the old owner to transfer the domain name in to the clients name. This process still took a couple of days to complete but it didn’t stop there. The next issue was that the hosting provider was actually leasing hosting space to the old owners developer and therefore they wouldn’t help the client.

The client managed to contact the old developer and the developer advised them that they would have to pay them a further $1,000 to use the site design, the website and get access to it. The client had no option but to pay the developer the amount as the website was accounting for about 15% of the monthly sales for the business.

Naturally after going through this expensive and painful process the client went back to the broker and the solicitors and asked for the old owner to be reimbursed. The response they got back was “No the old owner is not liable for this. Sorry.” The biggest reason from what we can gather is there is currently no legislation that caters for online components of any business.

As this is currently the case in Australia with ownership of a business you really need to make sure that when you purchase a business you add to your checklist “Domain name, Website, E-Mail Accounts and associated social media accounts”. Without it you may find yourself in a costly and painful process of trying to recover and get access to one of the most crucial tools within the business you have bought. The other two big issues you may face is unexpected bills for recovering the website and a loss in sales.

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