Whether or not you choose to work directly with an experienced website broker, kicking off the process of selling your online business requires some due diligence and preparation on your end.
You might have had a few preliminary calls with prospective buyers already, or perhaps you’re the one who is initiating the initial interest in selling the company. In these initial calls, you should not discuss a sale price directly.
If possible, avoid doing these initial calls and instead choose to speak directly with an experienced website broker. Some of the key things to consider during this early process are whether or not you have the financial materials gathered and whether or not you have strong enough data to support your business being sold.
What Happens After I Hire a Broker?
In the event that someone could be a serious buyer, the next official step in selling your online business is for that buyer to put together a letter of intent, also known as an LOI. The LOI is a legal document that shares that it is the goal of the buyer to purchase the business. This is also the buyer’s opportunity to explain what they intend to offer for the business and to lay out the terms of how the due diligence process will be approached.
Due diligence is an important component of listing your business for sale. Ideally, you will have already worked directly with a knowledgeable business broker to come up with a meaningful valuation number. In the due diligence phase of your case, this is where the buyer really begins to look into the company’s details.
Of course, what is anticipated from one buyer to another will vary based on the person or company’s individual approach. Your website broker working at Website Closers can help you to prepare for this process so that you know what to expect.
The letter of intent should include details about the timeline available for due diligence. Furthermore, the buyer might ask for a period of exclusivity. This is typically between 30 and 60 days, in which you are in the business of conducting the process of due diligence and are agreeing directly not to consult with other buyers.
Remember that you do not have to agree to exclusivity. You should consider looking for another buyer unless you have an exclusivity aspect laid out in the letter of intent or other contracts. Having a solid back up buyer can be important and can ensure that even if the first buyer falls through, that you have done your work to continue moving the sale along with someone else.
Once the due diligence and letter of intent period have passed, you are still mostly operating on good faith since neither person has a legal obligation to sell or buy, and both parties are able to radically change the deal terms or walk away.
Since this is a very tenuous and nerve-wracking period, it is recommended that you have a business broker like those working at Website Closers helping to guide you through that process so that if there are challenges, you can still attempt to salvage the sale. After due diligence is when the official final and legally binding documents are prepared. Tax and legal considerations apply here, such as whether or not the buyer intends to acquire the entire corporate entity or just the assets. You can discuss this with your website broker.
At Website Closers we have an extensive background of experience in helping numerous different buyers to list their company for sale effectively.