If you intend to list your online business for sale, it’s important to understand the entirety of the process, as well as the different ways that you might be able to receive an offer. Not all online business deals look the same. In fact, you need to be familiar with deal structure and financing.
Hiring the services of an experienced and competent online business broker is often the first step towards clarifying your goals and making next steps. Understanding how deal structures work can minimize your confusion and help you approach the process successfully when you have finally identified a buyer who is right for you. If you have never closed on the business deal before, there is a chance you might not have even considered deal structures.
However, deal structuring is the key of online business sales and advantages can be lost or gained depending on how negotiations occur and how the deal is structured. The negotiations are often the most exciting and important aspect of selling your online business but are all too often overlooked in the brokering space. Some online business brokers choose to focus on the multiples available for sale and how to prepare a business for sale itself. But the right online business broker will help you by preparing you to structure a sale for success.
There are three primary transactional structures in the mergers and acquisitions of the online business world. These are mergers, stock purchases and asset purchases. A merger is a situation in which two business entities combine to become one legal entity. The company that is being purchased provides cash, buy your company stock or it makes it both to the stockholders during the merge. A stock purchase involves all stockholders purchasing each piece of stock.
D One buyer’s entity will remain the majority owner in the company and the company remains intact, and then the buyer takes over all liabilities and assets. Finally, an asset purchase involves a buyer who chooses only to purchase the assets for the target company.
The buyer only assumes individual liability and responsibility for items that are listed in the purchase agreements. Since the buyer has the potential to only assume the liabilities they want to have control over, this is one of the simplest, cleanest and most preferred ways to go about buying the business.
What you must decide whether or not it is in your best interests to offer your company for sale in this manner. Scheduling a consultation with an experienced online business broker is the best way to discuss the options available to you as someone preparing to list your company for sale.
Choosing the Right Sale Method for You
With so many different avenues available to you individually, it pays to have the expertise of someone who has worked in this field for many years and who can guide you through the process of understanding an online business sale for maximum effectiveness.