Today we are going to discuss the personal and emotional sides of selling a business. Whether you’re selling an Amazon Supplements Company, a Vendor Central Account, a Website or any other Internet or Technology company, we’ve seen them all and the parties on each side of the transaction run the gamut in terms of personalities and associated emotions. As website business brokers, and brokers of all things digital, we have the luxury of working with some of the brightest minds in the tech and online world. These are entrepreneurs that have created fundamentally amazing companies, most of which are exploding in sales and earnings, and that would like to take the ultimate step of looking at an exit strategy.
What we have found in our decades of experience in this sector, and after having sold hundreds of companies over the years, is that the majority of entrepreneurial business sellers that reach out to us have only been in business between 6 months and 2 years. This represents about 60-70% of our client base. To an outsider looking in, we would imagine that these early stage companies seem too early to take to market – why on Earth would a successful business owner look at selling a company when it’s doing so well, so early? Well, this isn’t the Bricks & Mortar world and technology moves far faster than restaurants and convenience stores.
The truth about entrepreneurs is that they are a fidgety bunch. Most of them love starting new things, but running it for years and years, and compiling more and more employees, is not really in their DNA. That’s why they became entrepreneurs to begin with – the rigors of a 9 to 5, 40 hour work week in khakis and a button up would drive them to insanity – it is mundane, monotonous and not inspiring. By building something new year over year, they move away from monotonous, uninspiring work, to fresh new concepts that allow them to flourish and grow at a rapid pace. For this reason, many entrepreneurs will start up a company, run it for a year, and then begin thinking about an exit. As Internet Entrepreneurs ourselves, we totally understand.
Now for the buy side of an early stage company sale – how do buyers look at a company that is so new, without long term, historical financials to confirm that this business is not just a trending, one-time success, but one that can be financially stable and prosperous over time? In the technology world, what really matters is how the company is doing today. Since algorithms, platforms and sales channels change so often, something that happened 2-3 years ago just doesn’t reflect the company as it stands today. What smart buyers are looking for is a trailing twelve month and a year to date analysis of sales and profit.
Buyers oftentimes come from a different ilk than sellers. Whereas sellers are oftentimes creators and inventors, buyers often tend to be management-level and financially-minded individuals. Both have the ability to be successful in any given business, but the two personalities are rarely the same – 2 different sides of the brain. Good brokers and intermediaries know this and plan for it during different stages of a deal. They know that sellers tend to have high emotions when selling and buyers want to get the very best deal. So, we have multiple personalities where one wants to maximize, and the other wants to minimize, the valuation of the company. For this reason, it is critical that a deal have a strong middle man brokering the deal that has patience in abundance, a solid financial background and an expert understanding of the business and its sector.
That sense of expertise, professionalism and achievement are the foundation that sets the tone for business at WebsiteClosers.com. We see the old school mentality that so many brokerages continue to live by – but we are different. Our intermediaries are highly skilled in the technology and internet sector, and since our founders own and operate tech companies themselves, they are in a unique position to understand a business from the inside out. There is no better resource for representing a tech or internet business for sale – so please call or email us today. We can be reached by phone at (800) 251-1559 or by email at [email protected].