Buying & selling websites and businesses

Making and getting payment safely

Your money is important. Nobody cares about it more than you do (unless you are married, of course). How do you ensure that you don't get duped into parting with your website without getting paid? Or, when buying a site that you don't pay the money and end up site-less?

Answer: Use an escrow service. No, they don't set a pretty girl over. That's "escort". Escrow acts as an intermediary. They take payment from the buyer, tell you when they've received cleared funds, you then transfer everything to the buyer, escrow pays you the money. Should the transaction fall through escrow won't return his money till you confirm that you have the site safely back. The obvious protection it offers buyers is that they don't hand money over to a party they hardly know till the site is safely in their hands. Should the seller not deliver on time the buyer is refunded his money (less the escrow fees).

And Escrow companies charge less than escorts.

Sure, there are other ways of paying. There's Paypal, Western Union, cheque, bank transfer, and the favourite of politicians all over the world - the brown envelope. And all of them are fine IF you are being paid before the goods are transferred.

As stated escrow companies charge for their services and the charges vary based on the value of the transaction and the method of payment. Escrow.com has a calculator and you can work out the charge before entering into the transaction (more later). Some forms of transfer, like Paypal, do levy a percentage charge too. This could be quite onerous on larger transactions. You may want to discuss with the buyer how that fee will be paid. It's quite common for buyer and seller to split the costs.

Choosing an escrow company: Read this guide to choosing an escrow company and you can't go wrong.

Capital Gains Tax on selling a website:

Don't forget the tax implications of selling a site. I know, I know, it isn't fair to have to give the taxman a share but, in this strange world of ours the penalty for not paying your taxes exceeds the rap on the knuckles you could get away with when you run over a few kids outside the local school. Not that I  recommending running over kids, some of them are tolerable; they call me dad. But, on selling an asset, the taxman generally wants his pound of flesh.  He may use a euphemism like "capital gains" but he wants it anyway. You'd be well advised on speaking with an accountant about it.

I'd share a few thoughts on how capital gains works but given that I think CGT is a liberty too far my advice may get me in trouble.