Deciding to purchase or sell a franchise business can be an exciting opportunity. There are many different benefits afforded to an owner who decides to purchase an established franchise business.
One of the biggest of these is that it is easier to begin the process of owning the business sooner rather than later. This is because much of the leg work in the establishment of the national brand has already occurred by the time the person steps into the business to manage it.
However, it is important to be mindful of some of the potential pitfalls when selling a franchise business. Overlooking some of these obstacles and pitfalls can be problematic, especially if you are not working with an experienced business broker.
Some of the biggest benefits of purchasing a franchise business include a system for operating the business is already in place, clear training and support, and favorable name recognition for the brand.
Both buyer and seller, however, should be aware of some of the potential issues associated with selling a franchise business long before the closing paperwork is signed. There are two critical documents that emerge in a franchise situation. The first of these is one that the seller previously signed, which is known as the franchise agreement.
This indicates what the franchise fees are for the business, when that existing agreement expires, and any transfer fees for selling the franchise.
The buyer should be aware of the terms that he or she will get when the business is sold. The other key document that emerges when selling a franchise is the franchise disclosure document. This document is mandated by law and contains a great deal of information about the bigger business franchise.
Certain states require franchises to register directly with the state and to make these FDDs available online. Some of the most common issues that emerge when selling a franchise business include:
- These buyers typically do not pay cash for a business.
- Unqualified buyers since the franchisor must both approve the buyer and the buyer must complete comprehensive training at the location named by the franchisor.
- Using a franchiser to sell the business can be the conflict of interest.
- Unqualified advisors, such as failing to bring in the right people to advise you professionally.
- Transfer fees, which can go as high as 10% of the sale price.
The seller should be familiar with the process of deciding at the outset of the sale, who will pay what and market the business for sale with this information. Plenty of issues can also hold up a sale even after the buyer and seller have been able to overcome some of these key challenges. These can include problems with negotiations and many more. At any time that a problem emerges with regard to the ongoing business for sale, an experienced and dedicated business broker can be very helpful for navigating these roadblocks. Website Closers can help you through the process with ease and with a personal touch.
When setting up as a seller on Amazon, if this is your goal to launch in 2020 or to expand your existing business, the first decision is deciding whether or not you will set up your account as fulfilled by merchant or fulfilled by Amazon.
The importance of this selection has far reaching implications for your business, because it dictates how future orders will be filled, either through your own resources or using the heavy lifting power of Amazon. This decision is not just important for logistics purposes, but it can also have a serious impact on your bottom line.
And it can be hard for new sellers to decide whether FBM or FBA is best. This individual decision comes down to the specifics about your business, such as its existing resources, its goals, products and size.
Understanding What Amazon Fulfillment Services Are Through FBA
Amazon Fulfillment Centers will receive your products in bulk, shipped by you through FBA. This means that the workers at Amazon select, pack and ship your products as those orders come in. This means that fulfillment is completely taken off of your plate, and also removes the hassle that can come with customer service and returns. There are several different advantages of choosing to work with FBA. These include:
- A buy box boost. FBA merchants are more likely than other merchants to appear in the buy box, even in the event that the FBA merchant has a higher selling price than others.
- Sellers using FBA get access to Prime, which means that free one-day Prime shipping is immediately connected to their products. More than 100 million consumers use Prime, which means that your products could potentially be in front of a bigger audience.
- Higher ratings. Amazon’s efficient, expensive and fast customer service network is yet another benefit of using FBA. There are some downsides of choosing fulfillment by Amazon, however, including:
- Extra shipping costs when you send your products into Amazon’s fulfillment centers.
- No control over service fees.
- Off-brand packaging since no marketing materials can be included, and Amazon has strict packaging guidelines.
Amazon fulfillment fees are a leading reason why you might consider to do the work on your own, but it’s critical to compare the potential costs as well as the benefits associated with choosing fulfillment by Amazon.
You might find out that the additional exposure offered through fulfillment by Amazon gives you a much better chance of being put in front of your ideal audience and selling more overall. You need to run your numbers and understand the data specifically to make the decision that’s best for you. If you decide to set up your company as Amazon FBA or have another online or offline business you’re thinking of selling, the experienced team at Website Closers can help to accomplish your goals of finding ideal buyers and moving through the sales process quickly and efficiently.
We’re closing in on the holidays and that might leave you thinking about whether you want to head into and complete another year as the primary owner and operator of your business.
We’re closing in on the holidays and that might leave you thinking about whether you want to head into and complete another year as the primary owner and operator of your business.
It’s not just about the time of year you’re in now- selling a business takes months to pull together. That’s assuming you already have the organized financials and a relationship set up with a talented business broker.
It can take anywhere from 8-12 months to bring a company’s sale all the way to the closing documents and it could be longer if you hit snags in the negotiation process.
The truth is that you must be looking far ahead in order to determine the business sale time that’s most appropriate for you. It’s not as easy as feeling like you want out immediately due to the amount of work that goes into preparing your company for sale. You’ll want to forecast out the ideal time you’d like to step out of the business in full and then work backwards from there.
The major phases of selling your business include the preparation, the marketing of the company for sale, selection and qualification of the right buyer, and the closing process. Depending on a few factors, each of these stages can take up to three months.
If you’ve got a business broker working with you at the outset, this process might go more quickly, especially if you’ve already done some of the legwork to prepare the company for sale.
A great time to begin marketing the business is in the fall, when people are back to work from summer and before they get busy in the holiday rush. During the summer is a difficult time to try to start the closing phase since some people involved in the deal might be out on vacation, slowing down the process and leading to obstacles with communication.
For these reasons, the most common time to consider selling your business and dipping your toe into those waters is the early summer. This sets you up to navigate around busy summers and winter holidays without too much of a slowdown in the process.
Where many deals fall apart is in negotiations. Qualification of the right buyer is key for feeling confident about the sale going through. The more you can be ready on your end with the financials and paperwork organized behind the scenes, the easier it will be for your business broker to market the company for sale to the proper network of qualified buyers.
Once your broker is involved, you can continue to keep in contact as the sale opportunities evolve. Your broker can help you navigate tricky questions and problems during the negotiation phase and will know what it takes to keep the sale process on the right timeline.
You can see how choosing a business broker can make a big difference in how quickly your company is sold to the right buyer. An experienced broker can make this process easier for you and help you sell your company no matter the time of year.
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.