Just about everything today can be found online, and it’s certainly true that your online business is no exception when you choose to list it for sale. There are plenty of different resources available and many of them even promise to help connect you with prospective and willing buyers by doing most of the work for you.
But if you don’t have an experienced website broker at your side, you could find yourself in the midst of avoidable mistakes when it’s too late and you have already gone too far down the process of listing your company. The internet is a great resource but there are even some offline ways to find buyers, and it’s all about finding the right network of buyers.
Someone who might be potentially interested in purchasing your company but doesn’t have the confidence or ability to follow through on that sale is essentially useless to you as a buyer. It’s far better to tap into the services provided by an experienced website broker who can connect you with a network of qualified buyers. Whether you want to work with a casual platform or specialized site, never overlook the potential that could come from working with an individual broker.
What to Expect with Business Brokers?
If you chose to use a real estate agent to sell your home, you know the various types of support services and insight that they can provide over the duration of selling your home. Working with a broker, of course, comes with many benefits and even helps flag you to potential pitfalls you might not have seen on your own. This is particularly true for anyone selling their business for the first time.
A broker can evaluate and try to find the right buyer while maintaining confidentiality about your company. This is a huge benefit that you won’t be able to tap into if you choose to list your company for sale on public websites. Furthermore, experienced website brokers come with a great deal of knowledge about the resources and tools to market your business. This can make it that much easier to find the right buyer quickly.
Is It Going to Cost A Lot to Work with A Website Broker?
Much like your real estate transaction mentioned above, you will have to be prepared to pay a portion of your sale to a website broker.
However, this fee is only collected after the business has been successfully sold, and if you know that you could pay this commission once the business has been sold to an ideal buyer but know that you’ll have greatly reduced stress and requirements during the interim, wouldn’t it be worth it? It’s important to ask upfront your website broker the different types of fees that could be involved, and the average percentage of the asking price that your broker might get when they close a deal.
Working with Business Brokers Successfully
Business brokers online have become extremely popular today, but unfortunately this means that there are lots of people operating their company under the umbrella of the name of business broker, even if they don’t have all of the experience, skills and commitment to be able to follow through in a manner that is most effective for you. It’s a good idea to schedule a phone consultation with a website broker like those working at Website Closers. At Website Closers, we like to say that our testimonials speak for our work. That’s because our clients have been thrilled to rave about the results they’ve gotten in choosing to work with us.
Whether you’re thinking about selling your company so you can move into a different type of online business model, or you are a prospective buyer of an online business, it’s important to be knowledgeable about some of the different types of online business models out there and which ones might appeal to you specifically or even appeal to your prospective buyer. The term business model is a word that is used to describe a way in which a company generates revenue.
In addition to the services or goods that company might provide, you can think of the business model as an overall make up and blue print of a company’s operations. Business models influence a number of different factors necessary to run and grow an online business, like skills, experience and time commitment required.
Five Online Business Models
Online business models can generally be broken down into five different categories. These are transactional, services, e-commerce, content and software as a service. Transactional businesses are those in which revenue is created by making a transaction between two or more users on an online platform in exchange for the payment of a commission. Services involve revenue being generated from the sale of services to customers found online. E-commerce businesses generate sale from physical or digital products that are delivered to customers via the internet or, more traditionally, through the mail. A content business involves the generation of revenue by visitors being monetized through a website, through tools such as affiliate sales or advertising. Software as service involves selling software on a subscription basis, which enables the customer to access it as long as the subscription is active.
Many companies have what is known as a hybrid business model. This is because the company might be utilizing multiple forms of the business models mentioned above. The hybrid model is relatively rare, since there is usually always one single underlying model with some additional factors to consider.
One of the most popular types of online businesses sold today is software as a service because it has the potential for recurring revenue. When the subscription to the service expires, the customer’s access to the software is taken away. There is an important distinction to make between a software e-commerce model and the software service model. The SaaS model involves selling a software on a subscription basis, whereas a software e-commerce model gives the user lifetime access to the software. Many companies for a long time used the software e-commerce model, but today in the world of digital business, software as a service has become much more popular.
This is a big reason why it is one of the most common types of online businesses purchased today, because someone who has already done a great deal of the legwork to establish the company and generate plenty of traffic and prospective customers, can pass it on to another business owner and that business owner can continue to generate revenue and income from this particular business model.
One important factor that a software as a service buyer will look at is the number of people who cancel their subscription during a given time period. This is known as a customer churn rate. If you have more questions on how to approach the purchase or sale of a software as a service business, consider speaking to our business brokers today.
Unfortunately, mistakes made in selling your online business can haunt you throughout the duration of the sale. One major mistake could be trying to sell a company on your own and not retaining the services of an experienced website broker.
Some people might be uncomfortable with the idea of a broker helping them with the sale of a company they have such a personal connection with. But a broker is also more familiar with the market and probably has a network of interested buyers at the ready. This means that a broker can help you navigate this process much more effectively and avoid mistakes.
Is A Dip in Performance the Right Time to Sell?
If you notice a decrease in your company’s performance or revenue, you might be thinking that this is the perfect time to sell. However, choosing to list your online business for sale on the back of a big drop in performance is a very poor strategy and one that is unlikely to draw in ideal buyers. This is because buyers are always going to do their research and be interested in exploring what happened in the due diligence process.
A major drop in your company’s success could lead to problems with risk and uncertainty in the eyes of someone who might have otherwise bought it. For a business that has been slowly dropping over the course of many years but otherwise appears stable, this could be a great opportunity to pursue a sale. Things might be unlikely to improve under your ownership if these conditions are true.
This means that the company has been consistently successful with slow and steady declines. Investors will still be able to point out this stable trend and adjust valuations in accordance with the diminishing returns. A poor time to choose to list your online company for sale, with or without the help of a business broker however, is if your company experiences a sharp decline over a short period of time and then is promptly listed for sale online.
Investors won’t be able to look at the long term picture or adjust their valuations logically because there will be too many layers of uncertainty. This means that the investor will then have answered questions and have to devalue your company in a big way to account for the increased problems with risk, and the potential challenges they might face. It can be difficult for an investor to see the reasons why a company might have decreased in value so suddenly, and you won’t really have an opportunity to position your company the right way if this has happened to you.
An online listing should be as compelling as possible and only put up after you’ve done some careful consideration about whether this is the right time. If you find yourself in the situation of trying to figure out how to navigate an unexpected decline in your company’s performance, it’s far better to consider holding off on listing your company for sale so you can stabilize that performance and identify what might have caused the decline. There are several different things you can do to help avoid the challenges of putting a company up for sale include:
Schedule a consultation with the experienced online business brokers at Website Closers.
Ready to sell your Amazon FBA business and thinking that you can handle it on your own? This could be a big mistake. Retaining the services of an experienced and qualified business broker, however, can put you in a better position to gain maximum profit and move on to your new ventures or even a business-free life if you so choose.
Remembering All the Hard Work
Putting in a significant amount of work to build your Amazon FBA business was probably exciting at one time, but you might have developed plenty of profits and steady income that mean you are no longer intrigued by the challenges and opportunities. This is one of the leading reasons why people choose to sell their Amazon FBA business. Plenty of these individuals equip themselves with the support provided by a knowledgeable business broker. Outsourcing to a business broker means that you have the chance to work with somebody who understands your market and who will do necessary research to help support you in your pursuit of selling your company for maximum profit to the right buyer.
The Basics of Negotiation
When you list your company, this is based on a business valuation. Your business or Amazon FBA broker can assist you with the process of obtaining a valuation. You might choose to list your business on the high end when it comes to the sales price and the monthly multiple used. However, the more that you network with an experienced and qualified business broker, the easier it will be to gather the necessary evidence to support this price. Negotiations are a common part of selling an online business, including Amazon FBA.
How Do We Start Negotiating?
Negotiations might begin with an initial phone conversation between a prospective buyer and your business broker. Your business broker might come to you directly and present the offer that has been made. This is an excellent time to have a broker on your side so that you can understand your room for negotiating and making a counteroffer. You might choose to negotiate payment terms and inventory payment separately. Negotiations can be one of the scariest parts of selling your online business because of the potential for the entire deal to fall through.
Questions and concerns are raised during the negotiation phase of selling your company and can lead someone who seemed like a sure thing to purchase your company, now fading into the background and suddenly disappearing. This can be a devastating experience for someone who is counting on selling their business. This is where having a business broker, like those working at Website Closers, on your side is extremely valuable. A business broker is a person who can help you to navigate these challenges and help to answer the questions of a concerned buyer promptly.
All of the research you would have done ahead of time in selecting your business broker and in carrying out the business valuation means that you will have the materials and documentation to support your arguments and help determine whether or not counteroffers and negotiation issues are within the reach of what is possible. It can be a natural time to panic in the process of selling your Amazon FBA business if you do not have a negotiating expert on your side.
What Do I Need to Know Before Conducting A Business Valuation?
As the seller of a website, e-commerce company or other online business, you recognize the potential that a valuation has to influence prospective buyers and to reaching out to your business broker for more information. Identifying an appropriate valuation is the key before listing your company for sale. In fact, it’s a process you should be very familiar with after consulting directly with your business broker.
There are several things that you need to consider before conducting a business valuation. If you have been successfully running a company for a long period of time, there are probably systems, processes, and tips you have in place that lead you to believe that your company is indeed valuable enough to be listed for sale.
Doing your own due diligence and gathering financial information can help you to prepare for your initial conversation with a website broker. Your website broker will then explain his or her steps of the process to you so that you know what to anticipate from the moment that your business is valued all the way through to the point at which it is receiving offers to purchase and prospective buyers are engaged in the due diligence process. The more work you do prior to listing your company for sale or even getting an official business valuation, the easier it will be to list your company for sale at a high multiple. First of all, remember that value is relative. Your business is unique and this means that your value and the structure of the company are too. If your earnings are below industry average, but your cash flow is strong, you need to be aware of how this could impact your valuation. There are other potential unique aspects of your online company such as whether or not you have intellectual property ownership of patents, a loyal customer base or other valuable and tangible assets. The process of incorporating these into a business valuation is complicated because it is influenced by factors that a seller doesn’t have control over, like the economy or industry forecast. The second thing to remember before conducting a business valuation that it is to your benefit to get started earlier rather than later. A business valuation should ideally be conducted years before a sale, especially if you are getting a valuation for the purposes of trying to improve your cash flow or earnings. Both of these concepts will help you to raise the asking price of your company, so therefore, a business valuation does not always mean that you are immediately interested in making a sale. You might get a business valuation now to learn more about what you can improve to make your business more appealing to buyers and then another one closer to the time of sale.
A prospective buyer will want to see at least the last three years of financial statements before moving forward with the sale, so it’s a good idea to consider a business valuation up to four years before a sale if you have the goal of improving value prior to listing it.
Finally, make sure to do your homework in regard to valuation. Different methods may be preferred in different industries and your business broker should be helpful in explaining to you what’s required and what you can anticipate. Make sure that you employ professionals, such as business valuation specialists before moving forward with any sale.
An appraiser who is highly experienced in the field should be used to make sure that you have avoided many of the most common mistakes people make in the business selling process.
Making the decision to list your online business for sale is an exciting one but it can also come with plenty of pitfalls if you are not careful. From the moment that you decide to sell your business, you need to have in the back of your mind that the buyer will be one evaluating the material that you forth online to make a final decision about whether or not your company is stable enough, generates enough revenue and has the potential to be successful under their leadership.
One of the most common mistakes that can be made in this process is in putting forth information that makes it seem as though the success of the business is entirely reliant on you and your individual characteristics. There are many different factors that a buyer will analyze in determining whether or not to purchase your business and these factors don’t just highlight their underlying decision to purchase the company but will also influence the offer they are likely to make on your individual company.
Current Year Earnings
Of course, earnings are a key issue for anyone who is contemplating buying a business and stepping into it themselves. This includes how much your website made in the last 12 months as the most common basis of the valuation. Your website broker might be able to help you with additional details that can put forward a positive face for your company.
Certain kind of business models can be viewed as riskier than others. Some buyers might not be interested in a business model that requires intensive labor. Buyers will value your model in different ways based on their individual understanding of the business and the perceived risk of the company.
Growth Trends for the Business
Being able to establish clear financials and growth trends is important since an upward trajectory will attract higher prices.
Sources and Reliability of Traffic
Buyers who notice that your company has a strong reliance on search engine traffic could view it as risky. Furthermore, if the traffic sources are spread across multiple sources, this will be perceived as lower risk. This could lead someone who is otherwise concerned about the business to see that you have many different methods of attracting business from prospective clients. This also highlights that you might have to be prepared to train the prospective buyer of the various methods through which you attract traffic.
Current Yearly Profits
Analyzing your liabilities and assets will be part of selling any business. Some of the common questions asked by the buyer in this realm include;
Where Can Value be Added?
Possible buyers will also be questioning their own individual opportunities to add value to the website. This is because they are motivated by profit and their ability to get their money back faster.
What is the Market Like?
Consistent industries will always attract interest from outside buyers and will also be likely to lead to higher earnings when it comes to a list price. This is because buyers tend to look at a comprehensive package and not just one piece of your online business for sale.
The more prepared you are for the prospect of listing your online business for sale, the easier it will be for you to accomplish your individual goals and structure a long term plan for listing your company for solid valuation and receive valuable amounts from an offer.
The right suppliers can help to sell an Amazon business. Many people don’t think about their suppliers in the traditional business valuation sense, but connecting with the right online business broker can verify that you think of every aspect of your company, and how to most appropriately position it with potential buyers.
The supplier dynamic of any FBA business is essential. Selecting the right suppliers and providing information about this to your prospective buyer can increase your chances of selling your company sooner rather than later for a nice profit. There are three elements that buyers typically look at.
One is the time to sell your Amazon business. This includes trading terms, lead times, and operational requirement. First of all, differentiation and price of the product on Amazon are both important for verifying you have an edge over your competition. When you want to sell your Amazon business, you must be prepared to address concerns about maintaining uniqueness in an increasingly crowded market. Many FBA business try to position themselves simply by having a completely unique product, or having the cheapest price.
However, the buyer will be interested in ensuring this will transfer with the sale on the same terms. The next issue important to consider when looking for how to sell Amazon business tips is our lead times. You cannot make any money if you have no items in stock, and unfortunately some FBA sellers have already had the experience of successful operations being so powerful that they run out of inventory, and then it takes several months to get the stock back in.
Any Amazon FBA business buyer will want to ensure the controls are already in place with regard to shipping and lead time to ensure they don’t run into similar inventory challenges. You must be able to demonstrate this. The finalized used to consider when selling your Amazon business is operations. When selling your Amazon business, if you work with numerous suppliers, you easily have many different products and shipping considerations and point of contact.
Buyers often will ease in simplicity of the overall selling process, so you want to ensure that much of the work associated with networking with multiple different suppliers is outsourced effectively or is automated. This can add a significant amount of value to your bottom line at the time of a business sale. If you are looking for how to easily sell Amazon business models, you will want to speak with an online business broker at the outset of your decision to sell.
An Amazon online business broker will likely have a network of possible contacts who may be the right fit to purchase your business, and give you a great deal of peace of mind as the process unfolds. The support of the right online business broker can make things easy for you, so that you can move on to your next business venture and wrap up this company sooner rather than later, having all of the materials prepared well in advance will make it easier to sell your Amazon business.
Are you already an Amazon FBA seller? Are you just thinking about getting started? Or are you in the process of buying an Amazon FBA business from someone else? If you intend to buy an Amazon FBA business, it’s a good idea to choose an online business broker like those working at Website Closers to help you with the process.
You must have an organized inventory system to succeed on Amazon. Amazon ranks listings with which inventory is more appropriate at the front. Thankfully, plenty of e-commerce tools have emerged in the last couple of years to help you set up your inventory system and manage things smoothly.
All of these tools are crucial for streamlining your store and ensuring that you don’t run out of stock. Inventory issues can evolve over the course of owning your business. Examples could include a higher volume of order requests which requires more comprehensive strategies for fulfillment, equipment or depletion of your inventory and increased order volume that renders manual processes impossible.
Poor performance of these metrics could lead to your account being suspended by Amazon, so you can’t afford to make mistakes. Customers on Amazon have come to expect not just fast delivery but also 100% availability.
Missing one of these two crucial elements will send your prospective customers to another buyer. There are many different tools out there that can help you with establishing and growing your Amazon FBA business. If you are in the process of buying a business from an Amazon FBA seller, make sure that the due diligence process includes looking into the processes and inventory management systems they are already using.
Top Inventory Management Programs
What follows are some of the most common examples that are used by Amazon sellers. You’ll want to evaluate not just for the features provided but also for the ongoing costs associated with these. These include:
Several of these emerge at the top because they have advanced features like optimizing your product listings based on thorough product research, competitor monitoring, and keyword rankings. You want to make sure that your inventory control is scalable, otherwise you could face problems that cannot be rectified quickly if your business grows very suddenly.
Being prepared for the possibility of this growth and also taking a long-range view to the fact that you’ll might want to sell this company some day in the future will make it easier for you to establish processes that are meaningful and effective for all of your business needs. Taking this long-term view is extremely beneficial for any would-be or current Amazon FBA seller.
At Website Closers, we’ve worked with many Amazon FBA sellers to help them prepare the company for sale. The closer you are to an optimized business, the easier it will be to get your business listed and available for sale with our vetted buyers.