Every Internet business is unique, but still, the sales process for any online company or e-commerce store is similar. No matter what type of business you’re hoping to sell, a qualified Internet business broker should guide you through the following eight steps:
1. Valuation – Prior to the execution of a listing agreement the broker will require specific financial and operational information on your business. Upon receiving that information the broker will then develop a valuation which will indicate a suggested listing price for your business. That valuation will be driven by the historical financial performance of your business, its future potential, and the likely market receptivity to your business once it has been put up for sale. A key determinate of which broker to list your business with is the broker’s direct knowledge/experience selling Internet businesses given without that experience a broker will have little relevant knowledge on valuing and selling your business.
2. The Initial Interview – Before a business broker can sell any company, he or she must learn as much as possible about the business. This is done through an interview that should take place at the very first call. The broker will ask questions about the company’s history, products and services, strengths, weaknesses, sales, assets and liabilities. Not only does this help the broker get a good understanding of the business, but also it allows you to get a feel for the personality of the broker and build a rapport.
3. Listing Agreement – By the end of the call, you should have an idea of whether or not you and the business broker can work together to sell your business. It’s perfectly acceptable to decide to walk away if you aren’t impressed with the broker. In the event that you do decide to proceed, the broker can then explain the listing agreement that he or she will require you to sign. The agreement should spell out the fees and outline the services the broker agrees to provide. Most agreements will have exclusivity requirements that will prevent you from hiring another broker during a specific period of time, such as 6 months.
4. Marketing Plan – Once you have signed the agreement, the broker will create a plan to market your business to prospective buyers. This will usually include a formal sales presentation and listing advertisement.
5. Buyer Screening – The business broker will vet prospective buyers, separating those who are truly interested in and capable of buying your business from those who are not qualified or likely to buy. This helps to save time and allow both of you to invest your energy in only reputable buyers.
6. The Bid – When a buyer is interested in making a deal, he or she will submit a Letter of Intent outlining the purchase price and terms of agreement. The business broker will present this to you for review.
7. Due Diligence – After you accept the Letter of Intent, both you and the buyer can work through the sales process with the help of the broker, who will assist if any problems arise. You may want to hire a CPA or Accountant to help out during this process.
8. Document Creation – An attorney will draw up the necessary documents for the sale, including the Asset Acquisition Agreement.
9. Closing – When the documents are fully prepared, the sale is finalized, and you receive payment in exchange for your business. To ensure that the process goes smoothly, it is highly recommended that you use an escrow company. Your business broker can recommend quality escrow companies to work with. This is a much needed, inexpensive step and ensures that everything runs smoothly during the closing process.