One of the biggest decisions when it comes to selling an online company is whether or not to use business broker. The biggest concern is usually centered on the broker’s fee, but the fee is more than offset by usually a higher sales price, a lower time commitment on your part and a much higher likelihood that your business will be sold. To help you make this decision, you must first understand what an intermediary can do for you, and you must also understand what an intermediary expects from you, the seller.
Buying or selling a company is a complex activity that requires one unbiased party to coordinate the activities of the buyer and seller; a business broker has the expertise and training to assume that role. A business broker is not a sales person, but a business professional that facilitates the transaction to the benefit of his or her client, be it the buyer or seller. Many transactions fail when the buyer and/or seller try to conduct the sale of a business without the aid of a business broker.
In order to help you sell your online company, maximize the selling price, terms, and net proceeds, and handle all the details, there are some things an intermediary needs from you. The better you understand these expectations, the more smoothly the sale of your company will go. Here are some of the things an intermediary will expect from you:
Your time. In addition to continuing to run your business while it is on the market, you will need to spend some time with the intermediary to assist with the sale. This will involve returning his or her phone calls and being readily available to handle any questions, requests, and details.
Communication with your top employees. If you are planning to sell your company, you shouldn’t keep it a secret from your key executives and legal advisors. In fact, these people can provide crucial information and therefore should be working with both you and the intermediary from the time the company first goes up for sale through the transaction closing.
Networking. Developing a list of possible acquirers for your company will ultimately be the responsibility of the intermediary, but he or she can certainly use your help and suggestions. If you supply names of potential candidates and provide the intermediary with industry magazines and directories, it will speed up the selling process by increasing the number of possible purchasers. Plus, these extra tools will help educate the intermediary on the nature of your company.
Constant information. During the three to twelve months that it may take your company to sell, things will be changing within the business. As the seller, it is your responsibility to keep the intermediary informed of any changes that take place.
An open mind. Because it is your business, you may have a specific type of buyer in mind. But you may be limiting yourself. Your intermediary may have some suggestions of buyer types that you may not have thought of; keep an open mind and trust that the intermediary knows what he or she is doing given that the intermediary has facilitated the sale of many businesses like yours.
Your patience. It takes three months to a year or more to sell most companies, so you can’t expect your business to sell overnight.
Cooperation. When the company is actively for sale, the intermediary will schedule visits and conference calls with prospective acquirers. You may need to act as the middle man to communicate to management exactly what the intermediary requires and expects from such visits. For example, for an ecommerce business, a visit will most likely consist of a visit to the production and fulfillment areas of the business.
Updates. Once the deal is turned over to your lawyer, you may assume the intermediary’s job is done. But taking the deal out of the hands of an intermediary at this point can be a huge mistake, as he or she can be a huge asset as the final details are being worked out. After all, the intermediary is familiar with the business, the buyer, and all that led up to the sale, so he or she can help with final negotiations.
Keep in mind that selling an internet related business is very different from selling a brick and mortar business. The internet channel utilizes very different skill sets for customer lead generation, order fulfillment, and customer service. The business broker you choose to help you sell your online business must have a detailed understanding of these unique skill sets in order to effectively facilitate the transaction.