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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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.
Selling a software as a service, frequently referred to as a SaaS business, might eventually prompt consideration of selling your company. Many entrepreneurs have a dream of one day being able to exit the company whether they are retiring in full, taking a break for the time being or moving onto new ventures.
But a SaaS-related business sale can especially be challenging if you don’t have the support of an online business broker. Many SaaS companies make the mistake of failing to realize how complex the exit will be.
Basics of a SAAS Valuation
The SaaS valuation and walking through the necessary steps involved with due diligence can quickly find the sale turning into a challenge, particularly if no one is helping the business owner along the way. There are numerous different potential obstacles that may be presented over the course of the sale of a highly valuable SaaS business.
There is no need or reason to go through the sale process all on your own. An advisor can play an important role in keeping things moving in the right direction when obstacles are identified, as well as bypassing a great deal of confusion.
To ensure that the process goes smoothly and that all of the answers to your questions are provided promptly, it is important to identify an online business broker or advisor who has a good network. Large acquisitions can be especially complex in the SaaS marketplace.
Those sellers who have little or no experience must be able to depend on an experienced team for the sale of the company. A high level of competence and technical knowledge adds to the complexities of selling a SaaS business when compared with other types of business models. The more complex your company is to run now, the more limited the prospective pool of buyers who will be willing to step in.
Implement Structure Now for a Successful SAAS Sale Transition
As you prepare to list your SaaS company for sale, it’s a good idea to begin using processes and systems now that help you to reduce your working hours.
Removing yourself from the day-to-day management of the company is often a first step in ensuring that your company has a high value and can truly function without you. Step by step procedures and processes must be documented for the business. The simpler it will be to use these documents and checklists, the better it will be for the person who steps in to manage in your stead.
Even if your role will still be incorporated into the new version of the SaaS company as a partnership or as a merger, these new operational procedures will still be highly valuable in order to support the business’s infrastructure.
Having your books in order and being able to illustrate recurring revenue is one of the primary draws for people interested in purchasing a software as a service business. Make sure that you hire an online business broker who is knowledgeable about the valuation in process and one who can guide you through each phase of the sale.