How A Business Broker Can Help You Sell An Internet Business

How A Business Broker Can Help You Sell An Internet Business
on April 13, 2012 by in Blog

Internet-Marketing-1You’re hoping to sell an online business, then the best advice we can give you is the exact same advice we give any seller of any kind of business: make sure your financial records are accurate and complete.

Given the relative ease and lower cost of launching online businesses, many are launched by innovators with great tech and design skills, and a tremendous idea, but who may lack business experience. Is that you? Then keep in mind that while not keeping accurate financial records, including accurate general ledger, statement of profit and loss, and balance sheet may not get in the way of you running your business on a day to day basis, it will become an obstacle for you when you seek to sell the business. Whether buying a bricks and mortar or online business, any buyer is going to insist on seeing accurate and complete financial records. That’s the bare minimum.

We like to tell business owners not to wait to prepare for selling their business until they have to sell the business. In other words, get a head start today by running your internet business by employing the same best practices that any other business owner would. In that way, you will make a buyer’s due diligence easier, and remove preventable obstacels that stand between you and sale.

Here are some other recommendations sellers of internet or ecommerce businesses should strongly consider:

◾ Separate business and personal expenses by ensuring that you have separate bank accounts.

◾ Keep clean and professionally prepared financial statements for at least three years (if your business has been around that long).

◾ Make sure you’re confident about your decision to sell, and seek the advice of a professional business broker.

If your financial house is in order, and you’re certain that you want to sell your internet business, then here a few additional considerations about how to go about selling it.

Listing sites

There are many online listing sites that sellers can use. They are essentially online classifeds. Additionally, if you’re just trying to sell a domain name (which is a service that we do not provide) you may find that DNS services such as GO Daddy or Network Solutions will also broker “premium domains. for a commission. Classified listings sites will charge you to list your business for sale, and may charge buyers as well, if they want to see the complete listing. Some sites may offer web-based businesses as well as other “traditional” businesses for sale.

◾ Positive: This is either inexpensive, or free

◾ Negative: You may get a lot of inquiries from prospective buyers, but they will not have been filtered or prequalified in any way. Many may not be seriously interested, or even qualified, to buy.

Brokers

Business brokers who specialize in mergers and acquisitions, and selling both traditional and online businesses, can be a tremendous resource for anyone seeking to sell an online business. Even though an online business may lack some of the complexity associated with the sale of a traditional business, it is still subject to all the other legal and financial requirements that apply to the sale of any other business, and comes with a number of complexities of its own. Knowing how to sell a business is a specialty, and most people are unfamiliar with what’s involved.

◾ Positives: Brokers can help you value your business, find buyers, interact with buyers while you keep focused on running the business, assist with locating sources of financing, represent you in sales negotiations, etc

◾ Negative: Business brokers often specify a commission of 10% of the sale price, and may also stipulate a guaranteed minimum commission regardless of sale price, along with other fees.

Businesses with very low revenue or potential market value may conclude that the fees associated with a business broker would cut too deeply into the proceeds of a potential sale, however businesses that are generating significant cash flow will be well served by consulting with and involving a broker in the process.

Selling an online business is not a simple process. There will be contracts involved, covenants not to compete, due diligence, discussions regarding financing, and detailed negotiations. If you reach an agreement to sell your online business, and accept an initial downpayment while agreeing to carry a personal note to finance the rest, then you will be required to establish loan agreements, payment and amortization schedules, and work through other highly detailed legal and financial details. A business broker would be able to assist you with all of these aspects of the transaction, which are exactly the same for a traditional or online business.

Considering selling your online business? Contact us today to learn how we can help you.

If you’d like more information on this subject, please Contact Us.

Share This Post
Leave A Reply