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.
Software companies are currently considered one of the most profitable types of businesses to sell, which makes it a ripe opportunity to schedule a consultation with an online business broker about selling your business today and initiating the valuation process.
Do Software Companies Sell Well?
According to a recent analysis, software companies sold for an average multiple of 2.87x in 2016 and that number has only continued to grow. Here at Website Closers, we sell SAAS companies fro 5-7x!
One of the primary considerations for anyone selling an SaaS business is how to get the best possible rate for the business they have put so much work into. Software as a service is an extremely compelling business model but one that often takes a great deal of work and research to bring to the market.
You need a valuation service that can help you to figure out whether or not now is the right time to sell and what you can do in order to leverage the value of your company as much as possible.
As an ongoing trend in the software as a service business selling space, larger companies are currently pulling in much higher multiples in terms of valuation. But businesses of all sizes in the software as a service based can still reap excellent value. The process of selling a software as a service company is one that may initially seem overwhelming even if you know that the time is right.
Do I Really Need Outside Help to Sell My SAAS Business?
Scheduling time to chat with an online business broker who has extensive experience preparing software companies for sale and moving them through the process is helpful for getting all of your questions answered. You’ll need to get a valuation of your software as a service business so that you are clear about what it’s worth and what you may be able to receive in the market, then begin putting together the prospectus including the numbers, facts and figures about the company.
The Role of an Investment and Vetting Platform in Selling a SAAS Business
A high-quality investment platform such as one used by your online business broker to identify appropriate buyers is the next stage after you’ve completed the valuation and the prospectus. When you have an online business broker negotiating the price with potential buyers, this removes you from the situation and eases some of the discomfort or confidence you might have around the actual transaction.
Negotiations can be notoriously tricky and having the support of an online business broker who has helped in these types of delicate situations before can ensure that the process proceeds as smoothly as possible.
What Happens After We Complete Due Diligence in a SAAS Sale?
After you verify the buyer’s financials through the due diligence process, you’ll then transfer all of the money and assets and help transition the new buyer into running your business. Businesses of many sizes are most appropriately sold privately through an online business broker who can help you to identify the most appropriate steps for you and the right buyer.