You might not be thinking that you yet need to prepare for the possibility of listing your online business for sale, but all the legwork you do now could pay off in spades later on when it’s time to turn to the services of a knowledgeable business broker to assist you. When you decide to sell your online company without the assistance of a professional, it is even more important to have all of your affairs organized and a clear plan for how the business will be managed and transitioned over to the new owner.
Selling a business takes a significant investment of time, which pulls attention away from the operations within the day to day of your company. There are several different things, thankfully, that you can do well in advance to ensure that you are properly positioned to be as successful as possible with the sale of the company.
How to Approach Business Sale Prep
First of all, start by listing the business for sale years before you actually intend to exit the company. Begin with an end in mind, and always think about what a future buyer might be looking for and the factors they would consider to be most attractive in your business. Prospective buyers are looking to see steady revenue growth, profits and a long term client base. They also want to see how that you have established traffic channels that show steady growth. The attractive factors of your company are things that you’d want to have in place even if you didn’t want to sell it in the future.
Second, know what buyers are looking for. Buyers might have different motivations, such as an investment, an opportunity, an income or any combination of those three. Buyers must feel comfortable that the business will continue to generate the income they need, even if the transition is handed over to them. These buyers also want to see an opportunity to grow that business, so creating a growth plan and looking carefully at your financial statements is crucial to improving the value of your business in the eyes of potential buyers.
One of the most important steps you can undertake to prepare for the business valuation and ultimate sale of the company is to prepare documents. You’ll want to have tax returns and financial statements that date back at least 3 to 5 years. In recast financial statements you can then can begin to present the company’s earnings to prospective buyers effectively. The goal is to maximize the presentation of the cash flow and net income. Buyers want to know specifically about cash flow, in addition to the income generating capability of your company. You’ll need to assist buyers to recognize the capability that your business has and the success that you have already built on.
Showing a Roadmap Before You Sell
Make sure that you help a buyer to see the opportunity for potential in growing that revenue even further by providing the prospective buyer with the growth plan. This is essentially a roadmap to the potential opportunities so that the new owner could step in and explore.
That plan must have an account of various capital resources where that potential buyer will have access to after the sale. The perceived value shows that potential to expand, so long as the potential buyer does indeed have the time and financial resources to invest in that expansion and growth.
As a website owner or someone who does business on Amazon FBA, you already know how much reputation matters.
One bad review online can haunt you for years, leading people who might otherwise have done business with you to decline the opportunity. This mentality about the importance of social proof and reputation is something you should keep in mind as you plan to work with a business broker, too.
The truth is that not all website brokers are created equal. Some use flashy ads to draw in business or focus on that one big sale they made last year. But is that enough for you to trust your enterprise and website to? Don’t you want to work with website brokers who have been in this industry for many years and have made a living with a good reputation on top of it, too?
The Right Website Brokers
A broker plays a big role in the sale of your company. It’s about so much more than pulling together the research for a valuation. Instead, a website broker takes a look at the big picture of your company and keeps this in mind as they prepare a strategy for you to sell.
Reputation matters more than ever when deciding to partner with a website broker. This person should be someone you trust with your company and the entire process of the sale.
At Website Closers, we like to think we are only successful if our clients are, too. That’s what we bring to the table every time that we set out to work with someone new. You can tell exactly how much we’ve worked with our past clients and what the process is like by looking at our reviews.
We often find that our clients are thrilled about our reputation because they know that we understand this process.
We are familiar with what it takes to get through the whole process of listing your company all the way through to the sale process when the new seller takes over the company. From due diligence through signing the final paperwork, there will be plenty of questions you have over the course of this process.
The reputation of who you choose to work with is crucial for you to have the least amount of stress in the sale.
When evaluating possible website brokers to work with, ask for testimonials and references. Most companies who have been involved in selling websites have plenty of successful sales and can likely point you to an entire page of positive feedback.
You also want to know the broker’s reputation in the individual industry- have they sold sites like yours before, and are they familiar with common concerns expressed by buyers in that industry? Do they know what it takes to list the site and to have qualified buyers prepared to step in and make the purchase?
All of these questions should be things that you think about when trying to decide who to work with. This person and team will be involved in your life from the moment you hire him or her, so your choice makes a difference. Select someone with the right reputation.
How do you know that now is the most appropriate time for you to sell your business? It can be a difficult decision to come to this point and it may require the assistance of outside professionals who can tell you whether or not your business is ready to sell. Sometimes wanting to sell the business in and of itself is not enough to translate over to a successful sale.
You’ll need to ensure that your market has appeal in the broader marketplace. For an e-commerce seller or an Amazon FBA business, there are knowledgeable business brokers and website brokers who can help you make this determination and ensure that you’ve considered everything before officially listing your company for sale.
Selling a business is notoriously challenging on your own but hiring someone to help you maximize your efforts can cut down a lot of the stress that you might face.
Understand the Overall Process Before You Begin
You must begin with business valuation as this will have implications for the remainder of your involvement in attempting to sell your business and can eliminate many of the most common questions that you might have.
Once you understand the business valuation process by hiring experienced business brokers like those at Website Closers, you will also understand that you need to allow for plenty of time.
It can take up to two months only to value the company if you are not working with someone who has a reliable and trusted process. After the business is on the market, it can take several months to sell.
Someone who is not familiar with the business selling process might have their company listed for up to 11 months or longer but working directly with business brokers like those working at Website Closers can speed up this process significantly because they already have a network of established and interested buyers.
Recognizing the methods to value the business directly is not necessarily required but it is important for you to consider what buyers will be looking at and how this can impact your overall business value.
Many business owners assume that the value of their company is based completely on revenue. However, if the revenue is growing but it’s at the expense of cash flow, this could damage the value of the business. Furthermore, you might not realize that there are certain metrics and steps that you can take now to enhance the business valuation. Being mindful of this and starting several months in advance of when you hope to fully list a company for sale will reduce a lot of the concerns and problems for you, giving you peace of mind that you have considered everything and are working directly with professionals.
Consider the way that you have structured the business. For example, an Amazon FBA owner should have done everything possible to remain competitive in this landscape of talented business owners to establish firm relationships with suppliers who can be trusted and to outsource or automate as many aspects of the business as possible.
Taking these additional steps has a significant benefit for everyone involved in listing the company for sale as well as choosing to buy the company. Prospective buyers see that you have done a lot of the legwork and are enticed by what you have to offer in this way.
Have you ever thought about the various tools and strategies you could use to make your business more marketable before you list it for sale online? With the support of experienced online business brokers like those working at Website Closers, you will get a better perspective of all of the different factors considered by a prospective buyer before they make an offer on your company.
Do you already have a content marketing and traffic strategy in place? This can help boost the sale along.
You want to make your business as appealing as possible before it even goes on the market and this involves a careful consideration of how to make your business more marketable.
A multi-point marketing plan could be the critical leverage that is required to make your company as attractive as possible for potential buyers. Look at your business from the outside and the inside to look for room for improvement.
What Do Buyers Consider Before Purchasing Your Online Business?
Selling a business is similar to real estate, except online, the factors that enhance curb appeal include things such as traffic, customer base and the products for sale. Make sure that your business is running smoothly and looks inviting online, so that your business is ready to show when a possible buyer surfaces. Your online presence says a lot about how easy it will be for someone to take over your company and begin to build on your powerful foundation.
Another step you must consider when selling your online business is preparing all of the accurate accounts of your financial records. All papers should be organized well in advance of your actual listing, even if you are not considering selling right away. Make sure that when you do sell your business, you have several years of detailed financial records available.
Getting organized now will make it much easier if a hot buying opportunity pops up. You will want to ensure that your business is up to date with appropriate regulations, including relevant terms of privacy on your website. You will also want to think about seller financing, which you can discuss directly with an online business broker. When you do provide financing in your listing, this can help to attract higher numbers of potential buyers, since many business-for-sale opportunities online allow people to look specifically for a seller financed business.
Making a strong first impression with your business for sale listing is crucial and that’s why it’s no surprise that so many people choose to work with an online business broker in developing this particular tool. When you put together your information with your listing, you will probably already have experience with advertising media to promote the company’s services or products.
Marketing your business for sale is a little bit more refined and an online business broker can help you with this. Be creative with the copy for your ads and if this is not in your wheel house, rely on the services provided by your online business broker to help you craft a compelling ad to draw in prospective buyers.