Selling An Online Business

Now may or may not be the right time to sell. It is important to understand the process and set realistic expectations before committing to a sale. Speaking with a broker or an advisor can save you a lot of time and headache down the road.

  • Cost of Selling

    01. Cost of Selling

    Many small business owners aren’t aware of the costs associated with selling an online business. Speak with your accountant to understand your tax obligations as this will vary depending on where the business is registered, the structure of the sale (assets vs stock) and the acquisition scenario (all-cash vs. partial buyout or financing). Other common costs include brokerage fees, escrow fees and legal drafting fees, which will vary depending on the size and complexity of the sale.

  • Valuation

    02. Valuation

    Before you commit to a sale, it is important to ensure that your sale price expectations are in the same ballpark as the current value of your business. First, you will provide some high levels details about your business, including Profit and Loss Statement, Google Analytics access and an Owner Questionaire. Once complete, our team of analysts will provide you with a valuation within one business day.

  • EBA

    03. EBA

    If it’s not the right time to sell, we will work with you on developing an exit plan, with the aim of increasing your business’ value over time. However, should you decide that now is the right time to sell, the next step is to engage in an Exclusive Brokerage Agreement (EBA). The standard length of exclusivity is 90 days, however 73% of our listings close within the first 60 days.

  • Marketing Package

    04. Marketing Package

    We will request some additional information about your business so our analysts and promotion specialists can put together a marketing package tailored to your business and the type of buyers that are likely to acquire it.

  • Sales Strategy

    05. Sales Strategy

    Our experienced team will provide you with a strategic roadmap, detailing our recommended sales and marketing strategy. This report will include our recommended pricing strategy a list of promotional activities we believe will best position your business in front of the right buyers. You will have the opportunity to give your input and sign-off on the finalized materials before we activate your campaign

  • Prospecting

    06. Prospecting

    We will actively market your business to our existing buyer network, as well as build an external list of prospects in related verticals that may have a strategic interest in your business. We make sure that no confidential information is disclosed to anyone who isn’t under a strict Non-Disclosure Agreement.

  • Vetting

    07. Vetting

    Interested buyers will have questions prior to submitting an offer. We will qualify each buyer and make sure they are serious about acquiring your business. You will have the opportunity to meet with interested parties over a conference call that we facilitate

  • Offers

    08. Offers

    You will almost always have multiple offers to choose from. We will help you explore your options and develop counter-offers if and when necessary. When you are ready to move forward, you will need to sign a ‘Letter of Intent’ (LOI) agreement, which states the price, closing timeframe and the main deal terms. We will provide you with our standard template, or you may wish to use one provided by your attorney.

  • Due Diligence

    09. Due Diligence

    The buyer will need to conduct due diligence on your business, which we facilitate to ensure you are protected throughout the verification process. It is common for the Buyer to place a 10% deposit down in Escrow to show good faith and serious consideration. Due Diligence typically takes between a 5 – 15 business days, depending on the complexity of the acquisition.

  • Purchase Agreement

    10. Purchase Agreement

    Once due diligence is complete, you will need to sign a Purchase Agreement with the buyer. This document can be considered to be a more comprehensive version of the LOI, as it is legally binding and includes the Bill Of Sale. We will provide you with our standard template, although we encourage you to seek legal advice prior to executing the agreement.

  • Escrow

    11. Escrow

    To protect you and the buyer, we encourage you to use a third-party escrow service. Unless agreed otherwise, we will set up the escrow transaction as per the terms in executed Purchase Agreement. Once both parties have accepted the terms, the buyer will fund the escrow account. Escrow fees are approximately 0.7% of the transaction value and are usually split equally between buyer and seller.

  • Transition

    12. Transition

    When the escrow provider has confirmed the escrow account has been fully funded, it is time to begin transferring all business-related assets over to the buyer. The buyer will usually have 1 – 3 business days to inspect the assets before confirming with the escrow provider to release the funds to you. When the funds are released at closing, our agreed upon brokerage commission will be released directly to us.

  • Release Funds

    13. Release Funds

    In almost every case, the buyer will require some post-sale training and support. Depending on the nature of the business, this support period can be anywhere from 1 week to 3 month, sometimes even longer. The training and support terms will have been agreed to by both parties in the Purchase Agreement. At this stage, we are no longer involved on a day-to-day basis, but will always available to assist you if and when needed.

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