Selling Your Small Business? Make Sure Your Social Media Accounts Are Properly HandledShare
If you're a small business owner who is preparing to sell your business, you need to handle any social media accounts associated with the business carefully. They are now being considered assets that belong to the business, not you.
Determining The Value Of Social Media Accounts
When you list your business assets, it can be difficult to assign a value to a social media account because its worth is largely intangible. A lot of its value comes from the connections it allows you to make with customers, the names and other contact information belonging to those customers, and your exposure to potential future customers through online advertising. It's also valuable for its assistance in maintaining your customer base and brand.
It's necessary to try to fix a value, however, because it affects your ability to calculate the true worth of your business. There are several different ways you can attempt to come up with a figure:
- The cost of creation approach: this method focuses on how much it would cost to replace the asset from scratch. You would calculate the approximate amount of man-hours that went into developing the sites and networking with them.
- The true market value approach: to use this method, you have to try to find social media accounts in your industry that have been previously sold and use those as a baseline for the value of your accounts. This can sometimes be a difficult thing to do, depending on your industry.
- The future income approach: this method tries to estimate how much operating income the social media accounts generate for the business now and how much they'll generate in the future.
There's no consensus on the best way to assign a value on things like social media accounts, which means that this could be an area of intense negotiation between you and a potential buyer for the business.
Transferring Ownership Of Social Media Accounts
Ownership of the social media accounts should transfer at the same time and date that the ownership of the business transfers. To avoid any potential lawsuits for a breach of contract, make sure that you take certain precautions regarding social media accounts:
- Make sure that everyone involved in the business, including family members and employees, knows the date that ownership of the accounts transfers.
- Separate out any purely social contacts and create a new account if you wish to maintain contact with them through social media. Make sure that any accounts you create are clearly personal accounts so that you aren't accused of trying to walk off with your former customers.
- Change all the passwords to the accounts and provide only the new owner with those passwords.
Because of the difficulty that can go along with trying to put a value on the social media accounts that belong to your business, consider hiring a business lawyer to help. An attorney like Souders Law Group can also help with negotiations as you and potential buyers try to come to an agreement about how much value they add to your business. He or she can also offer advice on how to transfer ownership of the accounts properly.