Are you thinking about selling your e-commerce business? Have you ever gone through the process before? Are you confident that you can do it yourself? Where would your time be better spent, running your business at peak performance while trying to sell it, or focused on the advertising campaign, networking, negotiating, and coordinating the closure of the sale of your business? Here are 6 ways to help navigate the difficult process.
Don’t get lost in the shuffle
You want your broker to have a proven record and a great reputation but you don’t want the organization to be so big that your deal is passed off to a junior staffer. You want the active involvement of the principals.
Do your due diligence
You’re about to engage the services of someone that is going to have a big impact on your financial life. Make sure you are comfortable with the relationship. Check with the International Business Brokers Association and see if your broker is a member in good standing. Follow up on the references provided and determine just how satisfied past clients are. Check with your local better business bureau and see if there are any unresolved complaints.
Use a specialist
Real estate agents and other professionals sometimes hold themselves out as business brokers on a part-time basis. You want someone who makes their entire living selling businesses full time. Consider an ecommerce business broker that has specific experience in your particular industry and someone who can point to successful sales they have made for your competitors.
Avoid heavy upfront fee structures
Typically an eCommerce broker will charge between 10% and 15% of the sale price as a fee. While it is customary for them to ask for some upfront fees to initiate the process, avoid those brokers who are looking for greater than a third. Also, make sure that the upfront fee is deductible from the sales fee when the business sells. Following this advice will save you from having to invest a ton of cash before you sell the business.
Only contract for the business selling services
Smaller e-commerce brokers will offer accounting and legal services that you will need during closing for an additional fee and the broker typically outsources these services. It may be to your advantage to contract for those services directly leaving the broker with only the requirement to focus on the selling process and not generating add-on fees.
Share your expectations
Before you select an e-commerce broker, you should have at least a general idea of what you want to accomplish by selling your business. You should have a rough valuation number and you should know if you want a cash sale or stock. Share this with the broker and see if he agrees with your plan. While there probably will be differences in valuation, your broker should be in tune with the rest of your objectives. If he’s reluctant or believes that it will be difficult to achieve your goals, find another broker.
Using an expert to help sell a business is usually the smart route to take for any business of substance. You want your organization to have as much “curb appeal” as possible during the process and that means you should be focusing your time on optimizing the business not chasing down buyers.