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.
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.
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.
Some phases of selling an online business can be difficult and can catch even knowledgeable and savvy business owners by surprise. One common example is the due diligence phase. Doing your own research can effectively prepare you for the due diligence phase, making it that much easier when you need to present this evidence and documentation to the other side.
Many people find themselves thrilled with the overall outcome and process of selling their online business but will still experience difficult phases such as due diligence. Having an experienced website broker at your side however, can greatly amplify your level of success and level of confidence in navigating these difficult phases of the case.
Using an Initial Consultation with A Website Broker
A website broker or online business broker is there to advise you about what to expect in the selling process and to respond as needed during that sale. The initial consultation with website brokers such as those working at Website Closers will give you a good idea of the overall process and give you an opportunity to ask questions about what you might expect and how you can prepare. Your online business broker should also give you an accurate and thorough assessment of what selling the company would look like.
Some people might choose to go through the online business selling process without using a broker, but this can come with additional challenges and can present unnecessary stress to a person who simply wants to maximize their ability to sell the company successfully.
An online business broker is knowledgeable about identifying challenges before they arise and can significantly help the online business sale process go much more smoothly. Sometimes business owners can be caught off guard by how quickly they can receive a matching offer for selling their company when choosing to work with an online business broker.
Areas of The Business Sale Where the Broker Adds the Most Value
A business broker can help from end to end when choosing to sell the business all the way through, handing it over and successfully transferring the company to new leadership. However, there are a couple of key areas in which your online business broker adds significant value. These include;
No matter how you find yourself deciding to work with an online business broker, who you choose to work with has a big impact on the company being sold and you achieving your business sale goals.
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.
So you’ve already decided to sell your online business and hopefully you’re thinking about hiring an experienced website broker like those working at Website Closers to help you.
There’s no doubt that you already have the end goal of the final offer, the legal aspects and signing over the business in mind. In fact, this can help to keep you focused when you are first thinking whether or not it’s truly time to sell your business. You might have put plenty of legwork and effort into building your company, but now feel as though it’s time to move on. If this is the case for you, you are not alone.
Plenty of online business owners who turn to Website Closers for help with valuing and selling their business already have an end goal in mind. And envisioning this process can help to keep you on track and verify that it’s the right time for you to sell.
After due diligence has been completed when listing your online business for sale, a buyer will either pass on the deal because they identified information in their review that did not pass due diligence, or the buyer will make a final formal offer.
The original offer presented by the buyer might be adjusted, based on details reviewed in a due diligence process. In the event that the company did pass the due diligence inspection, your website broker will put together a standard contract for sale.
This contract is likely to contain numerous terms, such as the major aspects of the deal, noncompete details, the assets being sold, and the training and support terms would be provided by you as the business owner in passing on the company.
In many of these online deals, you will be selling the assets of the company and not the company itself.
This is the distinction between an asset sale versus a share sale. After all parties have reviewed and signed this contract, the transfer process begins. This process is carried out over several different stages including:
In these situations, it is beneficial to have a knowledgeable business broker, guiding you through the process.
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.
Making the decision to sell your e-commerce business is not always an easy one. It probably comes after months or even years of careful thought and determination that it is time for you to move into a different phase of your life. Many people have different reasons for deciding to move forward with selling their e-commerce business.
Perhaps you’ve already put a great deal of time and energy into growing your business and find that it no longer suits your individual needs, or that it’s time to move on to a different part of your life. You might have even begun to realize that you could take the profits invested from your business and put these into another process. If you are perhaps a serial entrepreneur, this is probably one of the biggest reasons that selling your e-commerce business appeals to you.
The selling process for an e-commerce business is relatively straightforward but can be made much easier by engaging the services of an e-commerce or website broker. Many sales are structured similarly and can become more complex or require more time in the selling process, depending on the size of your company. Most sales will be structured through the following processes;
There’s no doubt that you’ll have many questions about this process and that it can be made much easier by retaining the services of a business broker. One of the most comprehensive aspects of selling the company is deciding what it should be valued at, and the selection of an appropriate business broker can have a huge impact over your ability to sell your company for maximum value. Most people who are unfamiliar with this process might not realize just how critical the valuation stage of selling your company is and the steps that you can take to enhance your ability to recover maximum profits. There might be different strategies and tips that you can implement prior to listing the company for sale that allow to receive maximum benefit from listing the company. An experienced and knowledgeable website broker will be familiar with every phase of the process and can help advise you about avoiding many of the most common missteps that occur. Protecting your own individual interests is instrumental in helping you to enjoy the entire sales process without having to worry about mistakes or omissions in the process.
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