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.
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.
As part of the process of achieving a business valuation, you will need to explore all the current assets and inventory in your business. It is likely expected that after you complete the business valuation, due diligence and official sale of your e-commerce business that you will transfer any remaining inventory over to the new buyer.
The new buyer might request specifics about the inventory you already have in place, and having the structure and logistics already planned out prior to listing the company for sale can make it easy for you when you make this transition. Valuing your inventory can be complex if you do not retain the services of someone who is familiar with the business sale and inventory valuation process.
Basics of Inventory
There’s no doubt that inventory is required to run your business and the new buyer might be expecting a certain amount of inventory when you pass the business along. Having a certain amount of inventory in your possession already might have been the first clue that you wanted to sell your e-commerce business to begin with, but the question of “how do I value my inventory” might still be at the top of your priority list before listing your company for sale.
What is Normal Inventory?
A normal inventory level is usually included in the purchase price of a business, so that the new owner can sustain current revenues that are already being generated by the business. Failing to include an appropriate amount of inventory could cause the new owner to suffer a gap in the cashflow of the company.
Everything over an amount of the standard inventory level needs to be valued so that the new buyer can review this amount for purchase purposes above and beyond the traditional business valuation. The following generally occurs when asking the question of “How do I value my inventory?”:
Due to the complexities involved in valuing an inventory, it is strongly recommended that you schedule a consultation with an experienced and knowledgeable business broker.
If you’re contemplating listing your Amazon FBA business for sale with the help of a business broker, it might lead you to wonder whether you are obligated to tell your contractors, suppliers and other people involved in your business that you intend to sell. It could be a good idea to tell any long-time employees or contractors that you plan to sell the business. But this is a very delicate process and one that should be approached with care. There are many risks that you can face if you tell people who are not on a need-to-know basis. First of all, vendors or customers might perceive this as a sign that your business is failing rather than thriving.
Most people might be under the impression that you are choosing to sell because you’re getting out before things get any worse. Furthermore, any competitors who learn about this information could leverage it as an opportunity to steal your customers. Finally, employees who have been working with you personally, such as any full-time contractors, might worry about their job security and begin looking for other work before you’re ready to sell the company and make the transition.
But if you wait too long to tell any key workers in your company, this could make it difficult for you to hide information for the remainder of the sale, which could take up to a year or longer. There’ll be plenty of confidentiality risks you face over that time, such as leaving an email open that you didn’t expect someone to see, accidentally forwarding something or having meetings on your calendar about selling the business.
Keep Sales Details Private with Your Employees
One common recommendation for selling your Amazon FBA company is to keep this private until the deal is done. You’ll lose control of the conversation if your workers find out that you’re selling before you’re ready to do so.
One of the most valuable assets in your business could be your contractors, and in many cases, the owner of the business needs the vendor relationships and employees more than the seller ever did. Certain employees may have to know in advance, however, key employees or contractors should be aware of your plans to sell your business.
Examples can include any senior level managers, business managers you’ve hired or an accountant. This is because lenders and buyers might be asking for updated financial details on a regular basis and want to be able to provide this appropriately.
The best time to tell key contractors is either right before or right after closing on the sale of the business. This is because the risk of a deal falling apart and breaking into pieces after the due diligence process finishes is greatly reduced, and furthermore, this allows you to tell contractors that you’re selling and introduce the buyer shortly after before they develop time to worry.
This can also be your opportunity to explain to the employees what this really means for them as far as whether or not the new buyer of the company has to keep them on as key employees or whether they need to begin looking for another position. When you choose to sell your business with the help of experienced business brokers, you’ll have a good graph of the entire situation.
Whether you are contemplating buying a business or selling your own, you probably want to engage a broker to assist you through this process. Trying to sell a business without the support of an experienced business broker can lead you to feel frustrated and overwhelmed. This is why, increasingly, people with established businesses are turning to dedicated business brokers who have a good lay of the landscape and are knowledgeable about the different types of prospective buyers on the market.
Finding the Right Broker for You
Not all business brokers are one and the same, however, which means that it pays to do your research and to be knowledgeable about the process itself. Scheduling an initial phone call with a business broker can give you a good idea of the overview process and what you might expect as you decide to work together. Bear in mind that business brokers are slightly different from real estate brokers. Business brokers tend to be paid by the seller.
What Does a Broker Do?
An experienced broker can play a key role in helping you to narrow down the types of businesses that meet your criteria. As a seller, however, a business broker also plays the key role of assisting you with the streamlining of selling your company.
Given that selling your business is probably a very personal decision and one of the biggest ones you’ll ever make, it’s important to understand that you need to do your research of working with a broker.
Financials should not be the only qualifier for selecting a broker. Make sure that you identify someone who has a strong track record and plenty of testimonials. Make sure upfront that you are clear about what fees, if any, will be involved. A seller is usually responsible for paying the broker’s fees, but you will need to understand how this works and whether this comes out of the end sale.
The broker might not have every answer available about the state of your business unless you have completed business valuation already and have given them a clear overview of what details they can provide to prospective buyers.
After interviewing brokers, you need to learn their qualifications by asking whether they work full time or part time, how long they have worked as a business broker, whether or not they maintain a real estate license, which is not always necessary, and whether or not they are certified.
A good web presence is another way to evaluate how serious a broker is about operating their business. Their website presence should also include reviews and testimonials from past clients, which can give you a great perspective on how involved they are in the industry and the overall feeling that past clients have had in working directly with these brokers.
No matter how you choose to move forward, the support of a business broker can erase many of the greatest challenges you face in attempting to sell your business and finding a highly qualified and vetted buyer who is ready to step in and continue the growth you have already worked so hard to build.
Are you interested in selling your e-commerce company, but you are not familiar with the process that you need to consider? Selling any e-commerce company doesn’t have to be difficult when you retain the services of a business broker. But the first decision that you’ll consider in this process is whether or not to sell your e-commerce company via a marketplace or a website.
There is no doubt that there are many different benefits to selling products online, which is probably what drew you into the process of doing it yourself. Reaching more customers than a traditional brick and mortar store and being able to sell at all hours the day greatly expands your potential to make profit. There are so many different e-commerce options, and as a result of that, people are looking to cash in and tap into the power of selling on an e-commerce website. Some merchants must consider this initial decision of selling on their own websites, such as an independent e-commerce website or selling through another company like Walmart, eBay, Etsy or Amazon. Determining what is most appropriate for your business involves thinking about the benefits and downsides of each.
There are many different advantages to selling on a third-party marketplace and this is a top reason why plenty of sellers use this option. First of all, it is simple to get started and maintain a business when launching on a third-party marketplace.
An online marketplace can simplify the process, particularly for new sellers. This is because the infrastructure is already established, and this saves the hassle and time associated with building your own website from scratch. Since no one individual seller owns an online marketplace, the payment and transaction details are handled by the marketplace.
This removes a lot of things from your to-do list and can make the process easier overall. Since many of these marketplaces already have established forms of traffic and plenty of people visiting their website, there are millions of shoppers already leveraging them to find the best deal. You can make an impact by tapping into the power of the traffic already established on the marketplace.
There are downsides, however, to selling on a marketplace. Since there are multiple competing brands on the same site, you must always be aware of how to stand out from everyone else who is trying to accomplish the same goal of stealing their market share. Your competitors might target shoppers who visit your individual listing and then place advertisements for their own products on your pages.
Whether or not this impedes your ability to do business, depends specifically on the competition intensity in any product category, which means that you might not get the easy sales or exposure that you are intending. Furthermore, people who purchase your products might never realize that you, as the third-party seller, truly exists. Most people who shop from these marketplaces, such as Amazon FBA, assume they are buying from that marketplace, even when it is relatively clear that they are purchasing from a third-party seller.
Because of these disadvantages, it is important to realize that you might want to do some additional steps to build a niche site and create your own brand awareness.