Buying An Online Business
Buying an online business can be daunting, but it doesn’t have to be! Join our VIP Buyer Network and we’ll work together to identify the specific acquisition opportunities you’re looking for. Our M&A Advisors will actively search for businesses that fit your criteria and coach you through the acquisition process.
01. Identify The Perfect Business
What is your budget? Will you finance the deal with cash, an SBA, loan or a seller note? Are you interested in SaaS, eCommerce, Amazon FBA, or other business models? Are you interested in a particular niche or industry? What is the ideal revenue and net income? Once these questions have been answered, create an acquisition profile on your user dashboard and we’ll contact you when we find a match. We have access to over a million business owners worldwide with dozens more joining our network every day.
02. Ask a Million Questions
When you find the right online business to buy, it is important to do as much analysis as possible before you finalize a valuation and assemble an offer. As a member of the Dealflow Buyer Network, you will have access to the prospectus and financial statements for each business we list. Once you review these materials our M&A Advisors will be happy to answer any follow up questions you have.
03. Submit an Offer
Once you are ready to submit an offer, it’s time to draft a Letter of Intent (LOI) agreement. The purpose of an LOI is to reach a principle agreement between you and the owner on items including the total consideration (price), closing time frame, and principle deal terms; such as payment schedule, non-competition, post-sale training and support, etc. We provide a drafted agreement, though some prefer to use one drafted by their own legal counsel.
04. Conduct Due Diligence
Due Diligence (DD) is your opportunity to verify that all performance claims are in fact true and the business has been represented accurately. Common DD checks include a (i) financial audit of invoices, bank statements, payment accounts, and tax returns; (ii) traffic audit of Google Analytics; (iii) review of key stakeholder relationships to ensure they are transferable under new ownership; (iv) analysis of performance metrics such as customer lifetime value, average order size, churn rate, etc. Our advisors will guide you through the process as well as recommend third-party due diligence services who specialize in this area.
05. Finalize Purchase Agreement
The Purchase Agreement supersedes all other agreements, so it is important to be satisfied with every term. The most common inclusions are the Bill of Sale, Employment or Contractor Agreements, 3rd Party Assignments, Consulting or Advisory Agreements and Promissory Notes. Building out a purchase agreement can often be a stressful and contentious process, which is why it helps to have an M&A Advisor to analyze risk and mediate solutions which work for both parties. We provide a drafted agreement, though it is advised to engage legal counsel for final review.
06. Fund Escrow
We encourage clients to use one of our partnered escrow providers who specialize in online business acquisitions. We set up the escrow transaction as per the terms in the executed Purchase Agreement. Once both parties have accepted the terms, the purchaser will fund the escrow account. Escrow fees are approximately 0.7% of the purchase price through a discount with our preferred escrow providers and are usually split 50-50 between buyer and seller.
07. Asset Transfer
Once the escrow provider has confirmed the account has been fully funded, the seller will begin transferring the agreed upon business assets over to you. This will include all websites, domain names, databases, social media accounts, inventory, and any other assets included in the sale. We facilitate domain & hosting transfer, as well as any other technical transfers required. Once the transfer is complete, you typically have 1-3 days to inspect the assets before confirming you are 100% satisfied and ready to release the funds.
08. Post-Sale Training & Support
Purchase agreements often detail additional post-sale training and support deliverables. The scope, frequency, and time frame are unique to each deal and typically reflect the complexity of the business, the experience level of the purchaser, and the availability of the seller. We most commonly see post-sale training periods ranging between one and three months.