Deciding to work directly with a business broker for the purpose of selling your online company is an exciting proposition as it means you’re moving closer and closer to cashing in on a business that you have worked so hard to generate, tweak and build. However, it is equally important to make sure that you vet the person you are thinking about bringing in to your process so that you can verify that you have done everything possible to protect your interests and to set your business up to sell for maximum profit.
One of the most important questions you’ll need to consider early on in this process is how the broker typically works. Many people have the question, how long does it take an internet business to sell? But it’s important to realize that the amount of time it takes to sell a website depends on numerous factors, such as the complexity and the overall size of the deal, the existing business model for the company and the market the business is in. Asking your business broker upfront, such as those working directly with Website Closers, could give you an idea of the average time to sale for online businesses they list.
This is a relatively good indication of the existing buyer network they have and whether or not your business broker can successfully value businesses appropriately. The size of the business, of course, will have a significant impact on how quickly it takes to sell but typical sales times can be anywhere from 30 to 90 days.
There are two key questions that you must be prepared to ask your business broker before signing an agreement to work together.
Good brokers will have an established network of professionals. If they do not provide a service directly they should be able to recommend someone who can help you with your question or concern. One way that this might come up will have to do with legal assistance. Good brokers will have some experience in working with attorneys or drafting legal agreements and will understand some of the creative deal structuring and term negotiation issues that come up.
You should also be notified by your broker about the importance of getting independent legal advice to review all documents prior to the time they are signed. Any broker who argues that you do not need an attorney or a lawyer or says that you do not need to use asset purchase agreement should be avoided.
You’ll have to reveal some very important inner details about your company to go through the sale. This is what makes confidentiality of chief importance in the sales process. You don’t want customers, staff or competitors finding out about the potential sale of your business.
A professional business broker will hold confidentiality in the highest regard and will generate interest in your business only by using teaser information. Interested buyers will also have to be appropriately qualified before receiving any of these details, such as by illustrating that they already have the financial means to purchase the company. Finally, a broker should also require that any interested buyer sign a nondisclosure agreement before getting inside details about the company. This helps to vet the network of prospective and interested parties to ensure that you are getting the most from each action that you take in hiring a business broker.
Website Closers is proud to have established a legacy of working hard in this arena and ensuring that your interests are always protected.
As an e-commerce seller, you have a responsibility to stay ahead of the curve and to be mindful of what could potentially be coming down the pipe as it relates to e-commerce. Staying on the cutting edge and continuing to develop and refine your e-commerce strategy could help you to accomplish your goals and position your company as effectively as possible, should you decide to sell it in the future.
It can be overwhelming to stay up to date about all of the constantly evolving consumer expectations, especially given that there are numerous trends to pay attention to, like the reasons for abandonment of carts, where people choose to shop, different actions that could be taken to qualify for free shipping, and many more.
Some of the most important trends for e-commerce in 2019 could assist you with tweaking your current tactics and strategies to get the most out of your online business sales. These include:
Competing with Amazon In 2019
Although Amazon is still the biggest e-commerce retailer out there, there are several different things you can do if you have your own niche site or intend to develop your own e-commerce strategy. These include:
All of these tips will help you with figuring the most effective way to stay competitive and fully leverage on Amazon and other e-commerce venues in 2019 and beyond. Considering all of your options will also be instrumental in helping you to get a fair payment for your company should you choose to list it for sale in the future.
Website Closers works with you to list your company and then follow the sale all the way through until the sale is complete following any negotiations. This can be one of the trickiest aspects of listing and selling your company, but having a broker to assist you with carrying the sale through is critical.
There are many different reasons why you might choose to work with an experienced and knowledgeable business broker. Business brokers can make the process of selling your online company, e-commerce website or software as a service business, much more effective.
Business brokers can assist with many aspects of the process of selling and buying business, including providing ideas on marketing, the best valuation methods, pricing, assistance with negotiation, documentation for closing and other consulting as obstacles arise.
The four main reasons that someone chooses to partner with a business broker like those working at Website Closers include, confidentiality, saving significant time in the process of selling the business and waiting through prospective buyers, getting access to the network of a large potential buyer pool, and the broker’s objective view and ability to help negotiate if challenges arise. This means that someone selling a business should be prepared to sign a listing agreement.
What is a Listing Agreement?
A listing agreement is usually the first step for the business broker to begin formally searching for a buyer. All of the terms of the relationship are clearly laid out in this agreement, and an exclusive listing enables brokers to use greater resources to identify the right buyer for the business. Furthermore, the fees will also be outlined in the listing agreement.
These are usually based on the sales price and payable only if and when the company is sold. This can give you a lot of peace of mind as the seller of a company and knowing that you are working with experienced and professional business brokers who understand this process and are motivated to not only sell your company but to sell it to the right buyer.
Listing agreements usually have a minimum time period, which could be altered based on your individual circumstances and the business broker’s background. The listing agreement is a legally binding document.
What is a Tail Provision?
It’s a good idea to have your business lawyer review this before you choose to sign the agreement to formally work with the business broker. One of the most confusing aspects for a new business seller of a listing agreement is a tail provision.
A tail-on agreement means that after the agreement has ended, there might still be a clause stating that if you sell to anyone else within up to 24 months that the intermediary business broker introduced you to, you still would be responsible for paying a successor commission fee. You’ll want to read the fine print of any listing agreement to make sure that you thoroughly understand what you are signing on to and so that you have a chance for your attorney to review it in full.
In some cases, your business broker might even share commissions or cooperate with other intermediaries under their pre-arranged terms. The decisions about splitting that success fee is negotiated at the time of the arrangement. It can be hard to figure out what in your best interests when retaining the services of a business broker, but thankfully, hiring the right lawyer and business broker can make it easier for you to approach the process of establishing a sale schedule for your business and getting maximum revenue upon the time you sell.
You’ve begun to see positive numbers in your company and have stable and profitable growth over time. This can be a clear sign that it’s time to list your company for sale.
If you attempt to undertake this process on your own, however, you could find yourself facing many different challenges and it might end up being too late for you to take the appropriate action steps to correct them. Far too many business owners who try to handle the sale on their own underestimate the time and effort that is truly required to accomplish a sale of a business online.
Resources, time and effort are all must be expended in order to sell an online business successfully. Trying to sell your business and run it at the same time might seem like a monumental task and it is one of the leading reasons that some people who list their company for sale too quickly without doing their homework or hiring a business broker don’t achieve the sale price they were looking for.
These challenges occur because owners fail to account for the amount of time required to dedicate to the sale, which means that dips in performance could occur that could impact your business valuation or the way that outside prospective buyers view the company. Juggling business operations along with the sale demands could be serious recipe for disaster; sometimes ending with a suffering business and a failed exit.
The average life cycle for a sale might be as short as a couple of months, depending who you hire as your online business broker. This covers the various aspects of selling the company like valuation, listing, preparation, soliciting interest from potential buyers, managing inquiries, negotiating the terms of the deal in contract, pulling together the legal documents to sell your online business, transferring the assets of the business and closing an escrow.
This also assumes that no other issues or obstacles pop up during the process of sale. It is very rare for an online business sale to proceed without any hiccups. This means that if you are already quagmired by managing the operations of your business and then decide to take selling your company on by yourself, you might have to answer dozens or even hundreds of questions from prospective buyers.
You will have to carve out time in your schedule to be available for conference calls and this means you’ll also need to leverage evaluating contracts and negotiating deal terms. All of this can take time and could require as many as several weeks or even months to wade through. This is why exit planning as well hiring an experienced and knowledgeable business broker are strongly recommended.
The support of a business broker removes many of these problems from your individual plate and helps you to bring in an experienced professional to help you navigate these challenging situations. You deserve to have someone at your side who can help you with these obstacles and take as much of the work as possible off of your individual plate. The challenges of running an online business, much less selling it, can be overwhelming for a person who is confused about what all is required. Don’t find this lesson out too late, instead hire a business broker now.
A person who is contemplating selling their online business is likely thinking about what they can get out the deal, but if you choose to partner with an experienced team like those working at Website Closers, you’ll learn that it’s far better to think from the perspective of the person who might buy your company.
The practical steps involved in buying a profitable online business will give you a great eagle eye view of what a prospective buyer is looking for and some of the challenges they might experience in evaluating your online company or website.
Many people are familiar that starting their own online business and scaling it from the ground up is very difficult. In fact, this is one of the leading reasons that people turn to establish businesses to identify a turn-key model that works. From figuring out a niche to building an email list, to setting up a website, to driving traffic and creating other content, all of these can be challenging for a brand new business owner. Since you’ve already done most of the legwork for a person who may be contemplating buying your online business, they can effectively skip many of these phases.
What Buyers Look For
Buyers are looking for a turn-key opportunity that they can take over. Therefore, these buyers want to see that the company is making revenue and profits. The person who purchases the company might choose to let it run as it has been or try to make changes to increase profits. This means that new online business buyers are looking for companies that have a track record of sales and profits that are well established before they attempt to buy the business. This is clarified during the financial or due diligence phase of the sale. None of these online business buyers will rely on what you tell them alone. In fact, they’ll engage in their own research process to verify that you’ve given an accurate picture of what the company looks like.
Online business buyers are also looking for the systems, strategies and team members already in place to help the business run effectively. If the entire company is built on the success of you as the individual owner and a prospective buyer can sense this, they might be hesitant about stepping in due to concerns that they will not be able to continue the success. This means that it’s a good idea as a business owner thinking about selling your company in the future to remove yourself from the process as much as possible. This can show to prospective buyers that the success of the company is not built on you alone, which can be very important for helping an online business buyer to believe that they can step in and continue to run it successfully.
Online business buyers are also looking for companies that are growing, have traffic from a variety of different sources, have minimum revenues and meaningful growth that occurs from month to month, has marketing systems in place and has multiple streams of income. Knowing all of these things in advance can give you an opportunity to tweak and adjust your online business approach for maximum success.
Have you just decided to sell your online business and are currently negotiating with website brokers to determine who is the right fit for you? There are many different ways that a website broker adds value to the underlying ability to sell the company but understanding that some of the challenges may come at the very end of this business deal helps to set you up for success because you are able to prepare for these potential obstacles in advance.
Buyers who are stepping in to think about purchasing your business want to know that you have a firm strong business model that not only generates plenty of traffic and revenue, but that it also has the potential to be repeated if you were to be removed from the process entirely. This requires establishing plenty of procedures and a solid team, such that with some minimal training after the business is transferred, the new owner is able to step in and be successful. This is not always as easy as you might expect.
If you are wondering how to transfer your Amazon FBA business in particular, having a website broker who can help you navigate this process will be extremely valuable. There are several different hoops you might have to jump through in transferring an Amazon FBA business, although it is definitely possible. If the buyer believes that you do not have established processes or a firm training schedule in mind, such that you can hand over the company, transferring this website will be the least of your problems.
You may also have physical products that need to be transferred to the new owner or those that would need to be sold or otherwise disposed of. You need to be prepared to document as much as possible, well in advance, such that when it is time to truly sell the company, you have a plan in place to help you accomplish these individual goals. The support of a knowledgeable business broker can help you to avoid many of the common pitfalls associated with the business selling process. If a buyer gets nervous that you don’t have enough material or ability to transfer the company effectively with appropriate training, this is where your business broker can help to explain everything you have already done or are planning to do to support this process.
What if a Buyer Backs Out?
There are many different stages in the buying process in which a prospective buyer might get nervous and attempt to back out. As a business owner, this is certainly not something you want to have to deal with but getting panicked yourself is not the right way to approach these challenges.
Instead rely on the expertise of your business broker. Your business broker has probably been in similar situations like this before and can help you navigate these challenges effectively, such that you do not have to worry about losing the sale entirely in most cases. Of course, this will require having a business broker who has served in roles like this many times before and who is familiar with helping you navigate some of the biggest challenges.
Your broker should be comfortable with explaining the business selling process to you at the outset of choosing to work together and will help explain to you how their role can be involved to approach obstacles as these obstacles emerge in the selling process. You should be kept informed at every stage of your business sale so that you know what to expect and can approach the planning process with success.
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.
Are you thinking about selling your SaaS business on your own or with a broker? Many people are originally attracted to the prospect of building a SaaS business because it generates recurring revenue. This can also make it an especially appealing offer if you decide to sell your company in the future.
Potential Buyers for your SaaS Business
Those who can see that you have already put a lot of work into developing the SaaS business model and where they can see revenue and profits that have been steadily created and grown over time will be drawn into the possibility of benefitting from this rewarding learning experience.
Many different skills were probably picked up by SaaS business owners in the early to intermediate stages of their business, such as a willingness to delegate tasks and to spend their time wisely, being strategic about their priorities and knowing what really matters to the customer.
One of the biggest things that can help a SaaS business owner to be successful in selling their company is removing themselves from the business as much as possible. While it might not be an option for your business to run on autopilot if you were not around, this can be a great goal to work towards.
Writing detailed procedures and refining these over the course of time with the help of the talented team members you’ve added as you enhanced your delegating ability, can enable many of the processes in your SaaS service to be streamlined. A website broker can be a very valuable asset for a business owner who is thinking about listing their company for sale for the first time.
An initial consultation with a website broker can reveal more about the process and what can be expected. A thorough and accurate assessment of what this selling process might look like is something you should hope to achieve during this initial consultation with a business broker. Many people who choose to work directly with a business broker are surprised about the smooth nature of the process.
It can initially seem overwhelming to accomplish due diligence by yourself but having a website broker at your side who knows the common pitfalls and challenges experience can overcome many of these issues. There are many different opportunities for a website broker to add value in selling a SaaS company. Selling a SaaS business requires somebody who is familiar with the SaaS model and has prospective SaaS business buyers at the ready.
Sourcing the buyer can be a key aspect accomplished almost entirely by your website broker. This is a major advantage, particularly if the website broker has a big buyer network. Being an intermediary during complicated negotiations is another aspect in which a website broker can help.
Although some brokers who might be new to the market could be very hands-off in this regard, the brokers with Website Closers are highly familiar with remaining involved throughout the process and assisting when there are snags in the deal. Setting Expectations Finally, website brokers like those working for Website Closers play an important role in selling of a SaaS business when it comes to establishing and setting expectations and educating both parties about what to expect.
If you are thinking about selling your SaaS business and you’re not sure where to start, scheduling a consultation with a knowledgeable website broker who is familiar with selling a SaaS business gives you a place to begin.
Opting to sell your online business presents you with a broad range of different information and it can be hard to determine what is the difference between one business broker to another. You probably have already heard of the term Website Brokers before if you have been involved in the business of establishing an e-commerce company or website creation for any period of time.
Should I Just Use a Listing Site?
Sites that make it seem like the process is simple, put forward what seems like an appealing opportunity for making money, enabling you to capitalize on this venture. However, trying to handle your online website listing on your own could be more complicated than you expect and by the time you are in on your own, it’s difficult to back out.
What Makes a Brokerage Different?
A website brokerage is a site designed to help purchase and sell websites and you can think of it as being similar to an auction or home sale. Many of these sites, however, operate without the expertise of insightful business brokers. Instead, interested buyers bid for each site they intend to purchase which ultimately drives up the overall price of the business.
The brokerage will then take a cut of the total auction for setting everything up and this process can take anywhere from a few days to several months. However, for more valuable businesses, it makes sense to hire a website broker.
Website brokers have gotten popular because of the extra benefits and services that they provide well beyond the scope that an individual business owner can handle. Because a broker is a specialist in the process, they do much of the work for the seller. This includes valuation with details, such as growth potential, industry trends, market position, how much traffic a website is getting, ease of operating the business model and how much the site makes.
Second, the website broker than compiles all of this information into a presentation which involves attracting marketing sites for sale. Brokers put the site forward for a broad audience and display sites in an appealing manner. They could include details, such as how well the site is performing within the industry, the name of the site, and similar sites that accomplish the same goals.
Finally, rather than a seller having to keep track of every individual offer that is made on their site, the broker will handle this for them. The broker than negotiates these offers, does their own due diligence and presents compelling information to the client.
A seller can get offers from different types of entities like an entrepreneur looking to thin the competition, a person with startup interest who wants to gain experience in running a business or conglomerates that want the business to be part of their collection.
After you have received an offer to purchase your company and have decided to move forward, the website broker helps you with the various paperwork and assists you with any of the other challenges or problems that arise during this process. It can be very valuable to have a business broker at your side.
One of the first questions that you ask as a website owner when you begin to think about selling your company is, do I really need a business broker? The answer is yes because a business broker can serve an important role in helping you to sell your company effectively. But your follow up question after you’ve made the decision that you need a business broker is how much does one cost.
You might also be curious about the kind of price that a business broker might list your website for and how this will affect your personal wealth and ability to transfer the website to a new owner effectively. Unfortunately, it can eb very difficult to find information about how much it costs to hire a business broker or the process that he or she will engage in.
Deciding between one business broker and another can be complicated which is why this blog article exists to help you make a decision.
Understanding General Pricing Structures for Business Brokers
The typical pricing structure for a website broker is very similar to that of a regular business broker. You might have already interacted with other kinds of brokers in your life, such as an investment bank, business broker or real estate agent. With a real estate agent, for example, you can expect that they will take a 6% commission. An investment bank likely will ask for a small percentage success fee as well as money upfront.
A business broker might be anticipating 10% to 15%. A website broker’s commission, if you look at the various companies established online who provide this service, usually ranges from between 6% and 15%. This all depends on how much you’re able to sell your website for and which broker you select.
Many of the existing website broker companies today fall in the 10% range but you will find other examples who charge more or less. A larger percentage will likely be required for those websites perceived as smaller whereas larger sites will attract a smaller percentage. The quality of service associated with a business broker can vary significantly and it is very important that you do your research and read testimonials of experienced business brokers to make your final decision.
The words of other people who have successfully been able to sell their website and who had a good experience should be taken into consideration with the utmost development and care because this person will be very locally involved in your claiming, valuation, listing of the company, entertaining potential offers from buyers and other aspects of selling your business.
A knowledgeable business broker is a person who helps advise you over the course of the process as well, which is why it is important to find someone who can give you individual preparation and understanding. Be careful about which broker you hire because unfortunately, many do not have the experience that they would otherwise lead you to believe. Ask for testimonials and examples of previous case studies to make a final decision about the business broker right for you.