Timing, as they say, is everything. The value of any business is relative to the market demand for that business and the profits it generates. That has little to do with your personal plans or your business goals. Put another way: Choosing when to sell your business can be more important than who you sell your business to, or what you will do after it is sold.

You might argue that the Internet is still a functional anarchy, but that hasn't stopped businesses from using it to make money. E-commerce or selling goods to the public over the Internet is already a $13 billion business (growing as much as 200% a year) and it is estimated that Internet sales will reach 41 billion in 2002.

In these pioneer days it is easier to start an Internet business than it is to sell one. There is no doubt that the Internet provides a vast amount of opportunities to make money. This combined with the ease for any company to create a web site, take orders and accepting payment has led to thousands of new web sites being created and posted on the net daily -- creating fierce competition.

To survive in this competitive world Internet companies will have to differentiate themselves by providing leading edge technology, superior service and creative marketing. This is very costly and will inevitable lead to an industry shake-out with the survival of well funded companies. We have seen the same phenomenon in many other industries. At the beginning of the century we had over 50 car manufacturers in the U.S. -- today we have four. The hard-disk and computer industry experienced the same shake-out and the Internet industry is predestined to go along the same path. Although the majority of business owners don't want to think that this will affect them, most smart and successful entrepreneurs plan the future for their business and their exit strategy, not because business advisors tell them to, but because they understand that it increases their chances for success.

So often an Internet executive will come to us to sell their business when the time is convenient for them – but all wrong for the corporation. Too often it is because they have just suffered a severer business setback or run out of money and they just want to go to the teller window and cash in their chips.

I’m afraid that it does not work that way. Even if you have had initial growth, buyers will value your company based on its most recent performance and future prospects. They will not overlook recent setback and a future possibly filled with diminishing market share and profits. That is why we advocate that you strategize the optimum time for the business to be sold, over simply choosing the best time for you to sell it. After all, only a few select will be able to go public.

But how do you know when your business has reached a peak and it's time to think about selling? One answer is, When your company has grown so rapidly that it starts to overburden your ability to run it and finance it’s growth without outside resources. The business might be at its peak when you have maximized the use of your physical and people assets and cannot grow without a larger investment in technology and know-how. Some people think that the party will never end. That one success just leads to another and another…but be wary of that trap and constantly assess if this is the right time, the right economy and the right value to cash in.

Why is it that business owners always seem to come to us one or two years after the company has peaked and is now on a decline to sell their interest. The answer is that, "It isn’t as much fun when the competition is breathing down you neck, sales are off 30% and your clients or customers are defecting to more advanced and better funded companies". It is often the case that we could have gotten that entrepreneur a million dollars more for their business a few years ago – but they lacked the motivation and foresight to sell their business when it was at its zenith. Worse yet, some executives were contacted by major league buyers at the time they were hitting their crest – but turned down their offers. (Only to wish they could have "the one that got away" back a few years later.) You need to take a fresh look at your business and come to understand that it is just like a house, an office building or any other asset that you own – it has a value that changes with the market. Too many entrepreneurs have their own self image and emotions intertwined with their company. It is important to remember that this is probably the largest asset that you will ever own and you need to treat it as such.

That is why I have been writing a book entitled, Exit Strategy. It is designed to help owners be in control of the process and plan the optimum time to realize the highest value for their business. The fact is that those who strategize when to sell their company and who to sell their company to, often do much better at maximizing its value.

So, how do you control the process and how do you maximize the value of your business? There are some simple and some not-so-simple things that you can do to greatly enhance the value of your Internet business and virtually assure that buyers will come flying to you to buy it. Here are ten things that you can do:

1. Keep impeccable records. Many companies can be rendered unsellable or certainly do not achieve the value that they should because their record keeping is so poor. Good records make for easy transactions.

2. Keep a high profile. It doesn’t help your value if no one knows who you are. Get active and get well known by industry consultants, associations, vendors and competitors. Image is often more important than reality.

3. Hire key managers and shore up weaknesses in your organization. A strong programmer, hot shot web-designer or a super inventive marketing manager might just be the key to upping the value of your business. Your people assets are important.

4. Rapid growth is more important than big profits. Buyers would rather see your company growing at 25% a year than making 25% profits. This is especially true in the Internet business where companies such as Amazon.com whose stock rose 600% in 1998 are valued very high even though they show huge losses. Most buyers know that high growth usually leads to high profits eventually.

5. Consolidate your power within your niche. The Internet industry is much like real estate was a couple of hundred years ago. It is easy and inexpensive to register a domain, resulting in many smaller companies. If possible, buy up weaker players and eliminate the competition and gain access to their domain name. The Internet industry is in a phase where market share is more important than profits and having a controlling share even in a small niche market can contribute to a big valuation of your company.

6. Innovate and lead. Build on any technical or creative advantage you have over the competition. Offer the ability to configure products or to easily build complicated custom orders. Your technical expertise and your customer base might be more valuable than the actual works you sell.

7. Go global. Although the Internet is global in nature, your markets might not be. The best buyer for your business might be a company in the U.K or even Japan trying to get a foothold on the web. If they don’t know that you exist – they can’t buy you.

8. Be visible and get hits. Besides getting people to type in their credit card numbers, the biggest problem is to get people to look at your web site, which is mostly done the old-fashioned way by advertising all over the place. No matter what you search for, Barnes & Noble will have an ad linked to their site where you can look for a book on that subject. Online ads generated $1.9 billion in 1998 and that number is estimated to quadruple to almost $8 billion by 2002. Another way to differentiate yourself is to use "Star Power." Nothing increases perceived value more than having your business associated with a famous person or a reputable company. Think William Shatner and Priceline.com.

9. Differentiate yourself through service and customer interactions. Online commerce has grown too big to rely solely on customers who would use it without needing customer service. A stock brokerage site might offer a real-time window where investors can talk to experts or other investors. Improved access to hot information and news groups on the subject. State-of-the-art shopping-cart that is safe and easy to handle. The options are almost endless. Amazon offers a feature that no normal store offers. Under the book description you can see what other people who ordered this book purchased as well as you have easy access to reviews and sales ranking. AOL offers free initial web access since they know that once you are signed up, you are not very likely to switch.

10. Stay out of lawsuits and confining contracts. Choose your associates wisely and check out everyone you do business with. Getting everything in writing is also an obvious precaution against lawsuits. This goes for your employees as well so they cannot make any claims when your company is up for sale. You can’t expect a buyer to pay big bucks for your business if you company has pending litigation's against it. Terminate bad relationships before they impinge on the value of your business.

Follow these ten suggestions and I guarantee that you will not only pump up the value of your Internet business – you will have more fun running it. Just remember that your company is a "storehouse of value". And someday that business can give you more than just a good living – it can make you wealthy.