I own a small but successful online retail store. In about 9-12 months, I'd like to sell the business. We have a strong and loyal customer base, excellent branding, regular national press and a strong point-of-view as a business. There's great growth potential for someone willing to invest in advertising or expanding the market reach. Also since the business is online, it could be relocated to any place and/or converted to a brick & mortar location.
I'm open to different arrangements with a buyer, but would rather not enlist a broker in the sale.
Any advice for me?
Thanks in advance!
Check your balance, review recent transactions and pay your bill on the go.
6 Responses
American Business Group
Apr 20, 2010
President
I own a business brokerage in Orlando. Space is limited here so please feel free to contact me at 407-770-8373 for any individual questions you may have.
In preparing your business for sale, re-examine your financials. Regardless if you use a business broker or source your own buyer at a for-sale-by-owner website, most owners seek more than their business is worth, yet end up selling for less than its fair market value.
It may be wise to have an appraisal or valuation done by a qualified business broker. Contact ones in your area to see if they offer these services for a flat fee (my firm does for owners planning future exit strategies).
Flat fee services. Not all brokers offer this, but worth calling. He or she will broker transactions between buyer and seller for a flat fee. No sense paying a commission to someone didn't find the buyer.
CONFIDENTIALITY. As you market, do so confidentially. Discretion increases both employee & client retention.
Good luck!
AxialMarket, Inc.
Apr 21, 2010
PETER LEHRMAN
The most important determinant of success when selling your business is choice. What I mean by that is that you as the business owner have contacted enough potential buyers (confidentially, as mentioned above) to know that at least some of them are qualified, serious, and have real intent on acquiring your company.
When business owners lose out is when they put their eggs in one basket with the first enthusiastic buyer to come along, and they either shorten or abandon a more formal process to identify and engage other buyers. At the end of the day, if a buyer knows that you have no alternatives, then they can impose their power over the transaction price.
Business brokers can help you locate buyers, but be very wary of those who charge one up front lump sum retainer to represent you. Online platforms can help you find buyers.
Good luck and feel free to reach out if you think I can help
Peter
blog: axialmarket.com/blog
t: @petelehrman
American Business Group
Apr 23, 2010
President
Peter is 100% right and it's worth reiterating:
1. Many owners put too much faith in their first prospective buyer. It is good to keep options open
2. Brokers and upfront retainers. In this market, more brokers have sought up-front retainers, however historically this way of doing business is more for larger merger & acquisition firms where they charge an up-front free to evaluate and value large companies ($10-20 MM Plus). Brokers should only charge success fees if you are seeking full representation.
Jessica
jessicahadler.com
americanbusinessgroup.com
ROMP
Apr 27, 2010
President
Kim Luu
Editor, Moneyandrisk.com
(Jun 07, 2010)Peter is right. Since your business is online, a buyer will be comparing your business to other competitors. You should start planning for the following things now:
1) Make sure financials are in order and can be audited to verify revenue and profits.
2) Check out competitors - How do you rank with them
3) Have there been any sales in your industry for an online business?
4) How do you compare with the brick and mortar competitors.
5) What do you want to price your business at?
6) Is your price justifiable? Do you have metrics that dictated the price?
Buyers:
1) Where are you going to find the buyers? Look around, start researching for advertising venues if you are not planning to use a broker.
2) #1 question buyer will ask you. Why are you selling if the business is successful? You need to have a good answer.
Hope some of those starting points help. Even if you're not planning to sell for a year, get ready now for all those steps if you want value
What do you think?
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