When buyers approach you to buy your company, you have to take a deeper look than what’s presented on the surface because not everyone is eligible or the right fit for purchasing your company. Lately, the number of people seeking out businesses has increased due to the success of many online and offline companies in the current economy.
Unfunded buyers could be con artists, but others will just be looking for distressed businesses. It’s important to know the difference between a good guy and bad guy when it comes to selling your company. A bad guy buyer will agree on a part-cash part-seller financing deal and negotiate price or even be willing to promote an all-cash deal.
This can get you, as a business owner, very excited about selling so that you start envisioning the steps for planning your life after you are out of the business. Some of the challenges that can be presented by these unfunded and unqualified buyers though include dragging out the discussions for selling the company to frustrate you.
Picking holes in the agreements you have already verbally made or even complaining about the most minor aspects of your company, they’ll find endless faults with figures and facts that you have presented to them even after you have done your due diligence. The purpose of this kind of approach is to put you on the defense and to force you to make concessions because you fear that you are at risk of losing the sale of the company altogether.
At every one of these interactions, you are likely to spot that the cash component of the offer drops. This steady and slow process still gives you hope of selling the business and therefore keeps you strong long after you should have walked. Eventually that buyer might get to a point where they are putting up close to nothing to buy your business and putting the financing on you as the seller, such as you agreeing to take up that balance and installments from future profits.
Finding the right buyers doesn’t have to be something that falls in your lap completely. This can be outsourced to your experienced and knowledgeable business broker.
At Website Closers, we know how frustrating it can be to try to manage every aspect of your business sale. After all what you do best is ensuring that the company is profitable and that the books are clear and clean for a smooth transaction.
Setting aside time to speak with the brokers at Website Closers can help you to clarify what you need to do and what should fall on the responsibility of your broker or the buyer of the business. Furthermore, a savvy website broker will know how to avoid conversations that waste your time because the buyer is not serious.
Whether you’ve already established your Amazon FBA business or e-commerce store or are thinking about launching it in late 2019, now is a good time to consider some of the various aspects that make this a good or a bad time to jump into the market. Being familiar with some of the metrics supporting e-commerce stores is extremely important for getting a good perspective about what to do next.
How Popular is Ecommerce?
E-commerce is a significant portion of the market. In fact, over 1.91 billion people bought something online in 2019. Those numbers will go up even more during the holiday season and it’s expected that in 2019 alone, e-commerce will make up as much as 14% of all the retail sales made around the world.
This means that from digital nomads to savvy entrepreneurs, e-commerce is a popular choice for building as well as selling a business. It is broadly considered throughout the industry that e-commerce is still on fire even though it has become increasingly competitive to break into this market.
Why is Ecommerce Growing So Quickly?
E-commerce spending has surged tremendously in recent years, which means that many business owners who are already established are seeing year over year growth and enhancements. E-commerce businesses saw as much as 25% growth across 2017 but that growth is anticipated to track even bigger in 2019. It could go up to as high as 36% and this kind of growth is very fast. This leads some buyers to wonder whether or not this kind of growth in e-commerce is sustainable. E-commerce is healthy and robust, which means it can be a powerful avenue to jump into as an online business owner.
You must be very savvy with how you structure your online business if your ultimate goal is to sell your e-commerce company. Having the partnership established with an experienced knowledgeable business broker, such as those working at Website Closers, can help you to develop your e-commerce business as successfully as possible, get a powerful valuation and showcase your ROI and other statistics for perspective merchant buyers. Most popular channels for e-commerce include Instagram, email, Facebook ads, Google ads and SEO.
However, the most effective platforms for Amazon as email and SEO. It’s important to review where most of your potential traffic is coming from the perspective of getting your sales. Being able to showcase this information clearly and easily makes it an excellent opportunity to speak with a business broker about listing your company for sale and receiving maximum return on investment when you sell the company to the right buyer. Getting a good ROI by showcasing all of your statistics makes your business that much more appealing for someone who is thinking about buying it.
If you think that you’ve grown your company to a point you’re happy with, now might be the right time to sell. The decision to sell your company is a very personal one, but if you think this is for you, speak with a website broker to learn more.
Are you thinking about selling your company, but you are curious about how the payment process works? No doubt, you’ve put in all of the hours and effort over many years and may not be thinking about retiring or exiting the company.
But this raises important questions about how you should choose to sell your business and the kinds of fees you can expect to pay. Varying companies offering business brokerage or website brokerage services will charge in different ways.
For example, they might charge a retainer fee, a fee that is assessed when a final business is sold or an upfront fee. There are different pros and cons to each of these approaches but you should definitely be familiar with the possibility of what you might pay when your company gets listed for sale. From the perspective of selling your business, many advisors might want an upfront fee.
Why Does This Method Make Sense?
This shows that you are serious about selling the company and enables them to take the necessary actions to start the process, to invest time and money and marketing cost to sell the business. However, you should not have to pay an upfront fee to justify the firm taking action to sell your company. Seeking a knowledgeable website brokerage firm with a consistent track record of selling businesses and commissions that are paid out at the time of closing enables them to have appropriate cash flow and resources to dedicate towards selling your business when you decide to work together.
One of the other major benefits of receiving a commission from the perspective of the website broker at the close of the sale is that they will only take on situations in which they feel confident about selling the company. If you are being asked to pay an upfront fee by a business broker, you might not be able to tell whether or not they are sure or feel confident about their ability to sell your business. Upfront fees can vary significantly, so the broker might instead be using this as an incentive to receive cash flow and take on a new assignment even if they aren’t sure they can actually sell the company.
Your mergers and acquisitions firm or your business broker should be able to lay out their clear goals with you when deciding to work together. It can be very beneficial to have an initial consultation with a business like this so that you can get a sense of how they work and how they choose to partner with and assist sellers in the process of putting your business up for sale. Business brokerage firms typically should have experience in your individual industry and have a track record of success in selling other companies. you might be curious about what the difference is between the brokerage firm and an M&A firm.
In many cases, there are very few differences between firms that call themselves these titles and they will rely on their preference. Both firms will gather information about the business and speak with the owner prior to working together, including information about finances, employees, customers, unique challenges and unique benefits of your company. Reviewing this initial information and conducting a business valuation helps them to decide how likely it is that your company can sell and to assist you with putting together a solid package for listing the company for sale.
Are you thinking about selling your business and finding the right business broker to help you in that process? Having regular trend analyses and data reports can showcase where you have room to grow and what you need to focus on in the coming future.
Do You Need a Website Broker to Help?
The support of an experienced business broker is very valuable when you are in the process of figuring out whether or not now is the right time to sell. Looking at your data can showcase where you have room for improvement and making some of these small tweaks can significantly enhance your overall business valuation. However, this information can also prove helpful for you when you decide to list your company for sale.
Why is Some Data More Important?
Certain statistics are more appealing to buyers than other, so how much data should you truly be keeping track of and what influence does it have on the ability to sell your company when the time rolls around?
A monthly trend analysis is powerful for looking at how a company performs from one month to next. The general assumption is that the business has a positive trend if their company is growing from one month onto the next. However, this can be a weak foundation for your overall assumptions about the strength of your company and it can also be misleading for your buyers when selling your online business.
Having a longer-term financial forecast and showcase of your various data makes it easy for people to see when it makes sense to partner with you in buying the company. You may be able to remove yourself from the business as much as possible and showing this makes it far more likely that a potential business buyer will be interested in taking over your company.
It shows that the success of the business is not reliant entirely on you alone and that someone else who is also a savvy online entrepreneur could step in and run the business while capitalizing on your previous success.
A year over year trend analysis is one you want to incorporate if you’ve only been looking month to month so far. Year over year trends compare the performance of your website and business over similar time periods such as looking at March of this year and March of last year. This approach can be very powerful for giving a big picture perspective on your company and deciding on what metrics to include when listing your company for sale. This is because:
- Year over year trends show seasonality and neutralized seasonality.
- Year over year trends are better predictors of the future so that you can decide how and when you want to invest your time and expenses.
A year over year analysis that you bring into your online business will give you many of the advantages of a month to month analysis but it also enhances the benefits by taking away the variables of the various time of year. Using any spreadsheet software is a great way to start with looking at a year over year analysis. This will help you to see whether or not your company is growing and when you have this information clearly organized in the package you present to an experienced business broker, it is that much easier for others to see how they might be able to purchase your company and continue to build on that success.
Seller financing is one of the most popular ways to get paid by a buyer of your business when you list your company for sale. Partnering with a knowledgeable website broker can be one way to give you greater peace of mind about the process of selling your company so that you know what to expect. It’s no surprise that many buyers will prefer to add in a feature, that many buyers will want seller financing when buying a business.
If Payments Are Missed, What Are My Options?
But what happens if the person is no longer able to make those payments sometime in the future. This is of utmost importance to the person who is thinking about selling their business and is trying to decide whether or not it makes sense to allow for seller financing. While seller financing can definitely help to attract more buyers or even very interested buyers who would otherwise not be able to purchase your company, it’s also key to be prepared for the fact that you may have to deal with the problem in the future of them not making payments.
Often times, it is a business seller who asks this hypothetical question of what are the consequences for the seller when they default on their seller financing note. The seller is usually considering this question as part of the process of deciding whether or not to accept an offer that has some in with seller financing.
Is Seller Financing the Best Choice?
A seller might have multiple options in this particular situation, but a buyer does take on certain risks in allowing this. Sellers hate offering seller financing because it primarily comes down to the key issue of avoiding risk. Buyers love owner financing because it enables the business to pay for itself out of ongoing cash flow, it keeps the owner involved in the sale, is a sign of good faith from the seller, and requires less cash at the closing process. However, it can be difficult as a business seller to see why it makes sense to enable owner financing.
In the event that the buyer defaults, enforcing the payments can be an expensive way to go when you try to require this and get the person to have backup. Furthermore, a seller doesn’t know if the new owner will make business decisions that could affect the profitability of the company and, therefore, their ability to be able to make continuing payments on the seller financing agreement. One of the first thoughts from a prospective seller is how will I enforce payments on this note because I am not a bank and I don’t want to try to be one. The seller will ask questions such as;
- Is this prospective buyer truly competent enough to run the company?
- Can he or she be trusted not to try to avoid future payments?
- Are they knowledgeable enough to avoid critical mistakes that could destroy earning potential and the business overall?
The next phase to consider is whether or not you can get any collateral. Many owners are selling their business and are ready to move on to different pastures. If the buyer begins to miss payments, this is usually because the business is suffering in some manner.
Online businesses today sold through the help of a business broker are valued heavily on their cash flow, but the seller might have any loan secured with an asset that eventually loses its value. To deal with these kinds of complex issues that frequently come up when selling an online business, schedule a consultation with an experienced website broker.
There are many different things to do and details to keep track of when building your digital business, but those details also can’t be neglected when it’s time to sell your digital business. Here at Website Closers we have extensive experience in website, digital, tech, and software as a service companies, in addition to helping sell companies that have been built successfully on the Amazon FBA platform.
Knowing How to Sell a Digital Business
Digital businesses present different pros and cons than a traditional business model and understanding the differences and how these various companies are valued is crucial. Digital businesses are certainly getting easier to value, but this means you also need an experienced and knowledgeable business broker to help you.
Preparation time is key to setting yourself up for success when selling your digital business. Without the right preparation time, you might struggle to figure out all of the different details that need to be in place before you list the company.
Hiring Help for Your Online Business Sale
Given that the listing of your company is the first step towards drawing in prospective buyers, you need to be fully prepared for what to expect and this is why business brokers like those working at Website Closers can be extremely valuable resources. When you think about the sale of your company, you have to be patient.
The buyer might sense your need to unload the company quickly and are more likely to try to get a lower price on the business or to walk away. The preparation time for your business includes conducting a careful audit of your most successful channels to date and some of the pros and cons of your business in general.
You’ll also need to consider potential business valuation issues like what metrics and steps you can take to protect yourself and the future of your company. For example, traffic is one of the major validation factors when it comes to a digital business. If there is an opportunity to improve your existing traffic, the time to implement it is now, well in advance when you intend to list the company for sale.
Without consistent traffic for your digital business, it’s hard to make a strong case for the worth of your company outside of your website. Buyers tend to look beyond the numbers when considering traffic. An intelligent buyer will also look at the sources of that traffic and will verify that it is quality traffic based on your website. You want to present your website in the most powerful and accurate light to give the buyer a sense of confidence about their ability to take things over.
Schedule a consultation with the experienced team at website closers today to learn more about how we can help you prepare your company for sale as effectively as possible. Many people discover all too late that there are multiple issues that can come up when you are preparing your business for sale. From legalities to technical issues, trying to go through with the sale of your business on your own can present challenges that you might not be able to successfully maneuver. This is where an experienced website broker like those at Website Closers can come in.