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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Buying a web business can be daunting, but it doesn’t have to be! We'll walk you through a detailed approach to buying a business and help identify the right opportunities for you.
Establish what the perfect business looks like for you. How old is the business? What is the business model? What industry or niche does it operate in? How many hours are required to operate it? What’s your budget? Does it need to be pre-approved for an SBA loan?
We have access to over a million buyers worldwide. Complete a ‘buy-request’ and promote your criteria to our network. You will receive a curated list of opportunities that best match your criteria within five business days.
Dozens of business owners enquire about our services every day. We store your purchase criteria in our database and notify you when the right opportunity comes along.
When you find the right opportunity, it is important to do as much analysis as possible before determining the value and putting together an offer. You will reach a point where the owner is not comfortable providing any further information about their business until you have shown some consideration. Usually this is shown in the way of a formal letter of offer and a deposit.
Putting together an offer letter (commonly known as a Letter of Intent or LOI) can be intimidating. Its purpose is to establish the price, deposit amount, period of exclusivity, closing timeframe, and any major deal terms such as payment terms, non-compete, post-sale training and support, etc. We can provide you with a Letter of Intent agreement, or you may prefer to use your own.
Due Diligence is your best opportunity to verify that the business has been represented accurately. Common activities include revenue verification where the buyer can verify bank statements, payment accounts and tax returns. The buyer can also verify key stakeholder relationships ensuring they are transferrable under new ownership. It is also advised to verify any performance claims such as customer lifetime value, average basket size, churn rate, etc. We can guide you through the process as well as recommend third-party due diligence services.
Negotiating the terms of the final agreements can often be overwhelming for both parties, and as such, it is very common to engage an attorney. Common agreements include the Purchase Agreement, Bill of Sale, Employment or Contractor Agreements, Consulting or Advisory Agreements and Promissory Notes.
The transfer process can be quite nerve racking, especially when transferring a huge chunk of money into an escrow account over the internet. We encourage clients to use one of our partners, Flippa.com or Escrow.com, however there are many other escrow providers out there. Once your funds have been secured, the Seller will begin transferring all related business assets over to you. After receiving all agreed upon assets, you typically have between 1 – 3 business days to inspect the assets before confirming with your escrow provider to release the funds to the Seller.
In the purchase agreement, you and the seller will have agreed on the training and support terms. The frequency and timeframe typically depends on the complexity of the business, the experience level of the purchaser and the availability of the seller. We most commonly see terms ranging from between 1 – 3 months.
It doesn’t matter if you are looking to sell now or five years from now - every owner needs an exit plan. We will help you develop a plan and teach you what attributes buyers are typically willing to pay a premium for.
Establish the current market value of your business. In order to complete a valuation, you will need to provide us with a Profit and Loss Statement, Google Analytics access and an Owner Questionaire. Our team of analysts will provide you with a professional valuation, detailing the main drivers that contributed to your valuation.
We will identify the low-hanging fruit that can be tweaked to immediately increase the value of your business. We will also provide you with a list of recommendations and executables such as consolidating financials, optimizing operations, introducing new revenue streams, deploying new customer acquisition strategies, expanding product and service mix, adjusting pricing models, setting up performance metrics and tracking.
Once we give you an idea of how much each executable can increase the value of your business, it is up to you to determine how much time and resources you can dedicate to your exit plan. We will help you set realistic goals, include the eventual sale price, exit timeframe, as well as key executables and specific performance metrics your business needs to be hitting to achieve a sale for the price and deal terms you are aiming for.
You will receive a report detailing your exit plan. We will meet with you at the beginning of each month (or quarter, depending on your preference) to review the past months’ performance. During this consultation you will have the opportunity to address any executables or metrics that are need adjusting.
Even though your business isn’t under representation or officially on the market for sale, dozens of buyers are joining our network every day. We build an extensive profile on every buyer who joins us, so it’s not uncommon to find a buyer who’s looking to acquire a business exactly like yours! Generally speaking, these types of buyers have a strategic interest and are willing to pay a considerable premium above market value.