DomainInvesting.com

As the year winds down, and the final hours of 2007 are upon us, there aren’t many things that can be done that will be impactful on 2008. One fairly small (buy often overlooked) thing that can still be done is purchasing your office supplies for the new year.

I don’t know about you, but most of my trips to Staples ended in small purchases of random things for the business. I needed printers, pens, folders, binders, ink…etc. Lots of various office supplies were needed throughout the year. Well, this year I am going to do things a bit differently. I have a list of the office supplies I used throughout the year as well as a list of supplies I currently have “in stock.” I am going to Staples this afternoon and will buy everything I can possibly use for next year that I can fit into my apartment. While this isn’t going to be thousands of dollars worth of supplies by any stretch, it will be save me a few dollars come tax time.

There have been a couple of accounting programs I wanted to try out in lieu of my Excel workbook accounting, and this is the perfect time to buy them!

On Thursday, I discussed the business ramifications of backing out of a domain deal, and how doing so can potentially cause major damage to a person’s reputation. Both publicly and privately, I’ve heard from a few people about this type of issue, and it really seems to be a big problem in the industry. For whatever reason, some people believe that just because an official contract created by attorney was not signed by both parties, the agreement is not legally binding.

Yesterday, my friend Mike Berkens discussed the legal aspect of a buyer reneging on a deal. There are many variables that come into play with a situation like this, so it isn’t always cut and dry.

While most domain transactions probably wouldn’t be worth the expense and hassle of filing a lawsuit if an agreement was breeched, it might merit a call to an attorney to explore the options. In all cases, the buyer should take some time to decide whether its really worth fighting, as legal action isn’t usual a simple process. A business case/cost benefit analysis should be made to determine whether the outcome would benefit the business based on the potential costs.

Whatever the case may be, I think everyone can agree that backing out of an agreement is in poor form.

Now is the time to make sure your record books are in order to help save you time during tax season. Take some time to organize your records, to make sure you have all of your sales, purchases, expenses, and donations are recorded and in order. Oftentimes people pull their hair out in the days and weeks preceding April 15th, trying to remember specific transactions. This can be avoided by going over your books now and putting everything in order.

It could also be helpful if you set up your record books for 2008 so you can start off the new year on the right foot. You probably don’t need any special software to keep your records straight. A simple Excel workbook can help you stay organized. If you are organized, it will pay dividends during the next tax year, as you and/or your accountant will be able to make a guesstimate on your taxable income throughout the year, which can help you make intelligent decisions to offset your taxable income instead of the typical rushed decisions at the end of the year (like now).

It’s getting down to the wire, but SEO guru Aaron Wall provided some good year end tax tips to help save some money at tax time.

Want to know one of the quickest ways to destroy your reputation? Back out of a domain deal, and you can be sure that people will think twice before doing business with you ever again. This is a small industry and word gets around very quickly. People want to do business with trustworthy people, and if you violate this trust, people won’t want to do business with you. Whether you deal with premium generics, trademarks, typos…etc – it doesn’t matter – nobody wants to do business with someone that is dishonest.

In the past few weeks on various domain forums, I have seen a number of cases where people backed out of deals after an email agreement was made. A couple even started escrow transactions but backed out because a better offer was received in the meantime. I think this is VERY shortsighted. Perhaps the seller made a few hundred dollars more on a particular transaction, but it is doubtful many people will ever do business with that person again. I had this experience once, and I won’t do business with the seller again.

As I said before, “honesty and trust is the most important thing” in the domain investment business. If an acquaintance or friend tells me about someone who backed out of a deal, I wouldn’t do business with that person. It’s not worth taking a chance that something will happen in between agreeing to terms and the domain name being transfered.

The one caveat to this is in the event a trademark claim is made on the domain name. One unwritten rule of the business is that you never sell a domain name while any potential legal issue is pending. In that case, and only in that case, is it permissible to back out of a deal – and only after explaining the situation.

Whether a contract is legally valid if its made via email doesn’t really matter for the purpose of this post. I am strictly speaking from an ethical point of view. If you happen to be someone that is contemplating backing out of a deal (or maybe recently backed out of a deal), I would strongly suggest you reconsider. This is a mistake that is made only once in this business. Usually the first time is the last and only time.