Selling an online company can be a time-consuming and intricate venture. For many, it can also be an emotionally draining process. Nevertheless, there are many reasons why business owners choose to sell, from financial difficulties to switching career paths. Whatever your motivation is, it’s only natural you’d want to take the easiest route.
In this article, we’ll discuss the most efficient ways to sell your business online. Simply put, you can choose between a more hands-on approach, or you can hire professional help. There are five main different ways to accommodate each scenario, so make sure to keep reading for a more detailed overview.
If you're considering selling your business then use our free Selling Your Business and Business Valuation checklists for all the things you need to consider.
1. Online Marketplaces
In the last decade or so, online marketplaces have witnessed significant growth in popularity. As a result, over a hundred thriving platforms are dedicated to selling online marketplaces of services and products. With such a vast reach, it’s probably one of the easiest ways to sell your business online. Here are just some of the online marketplaces you can consider.
However, this method requires you to put in some effort right off the bat. You’ll have to list your business, go through an assessment process, and compile a report on all your financial transactions, business information and statistics.
The benefits outweigh the disadvantages, though. Just as in real life, online marketplaces tend to draw all kinds of buyers and sellers. The more people get access to your listing, the more likely you will sell your online business at a good price. Marketplaces would have to be the most common and popular ways to sell your business online. Be sure to have a good look at the tools and valuation options these marketplaces have because they are developing at a fast rate and the services they offer are growing quickly.
2. Social Media Advertising
Your initial instinct may be to keep the selling process as low-key as possible. But believe it or not, that can be counterproductive. Social media platforms are more than just promotional tools. You can use your various accounts to reach potential buyers without spending a dime.
LinkedIn is probably the most obvious choice. The platform allows you to communicate directly with serious buyers who are business focussed. In addition, LinkedIn lets you connect with other industry names which may be involved in sales, joint ventures, or some form of mergers and acquisitions (M&A). There’s also the option to pay for tailored ads if you have additional marketing funds for this type of promotion.
Other popular social media platforms, such as Facebook, Twitter, Instagram, or even YouTube, can work in your favor. You never know if one of your former clients or affiliates may be interested in buying. You can use the platforms to put the word out and reel in potential buyers. However, these platforms are blocked in China due to the Chinese government's internet censorship policy, they use WeChat and Weibo instead according to consumer market insight for China.
If you plan on selling your business, make sure to use your social network to the maximum.
A word of caution before we move on to the next method. While it may seem easy to sell your business with the help of social media, there’s more to it than just creating a posting. It might be an efficient way to spread the word for entrepreneurs with an extensive network and an established online presence, but if you don't have a big following or can’t afford targeted ads, your reach will be limited. Also, rival companies may get the upper hand on your offering if you’re careless.
3. Classified Ads
Another way to target prospective buyers is to post classified advertisements on the internet. Websites that host online classified ads are much more flexible than online marketplaces, meaning they’ll advertise pretty much anything. However, that also means that trying to market something as unique can be a tad difficult.
Local newspapers or magazines usually provide digital ads and the costs are generally pretty low. Also, there’s no shortage of websites you can turn to. Craigslist is the most widely read online classified site. You can post a classified ad and receive the first response within 24 hours.
Placing an ad on Craigslist is a straightforward process. However, of all ways to sell your business online, it’s probably the least reliable. Without an intermediary, you can’t know who you’re dealing with on the other end of the transaction. Before you seal the deal, make sure you have everything covered and seek some legal advice around setting a contract in place before committing to any sale.
4. Hiring a Broker
A broker’s job is to make sure your business sells at the highest possible price. While experienced entrepreneurs can probably go without one, it can speed things up. Veteran brokers usually have many industry connections, which means they keep a finger on the market pulse at all times. This is especially true if you're in a specialised industry, for example dentistry, where dental business brokers can make a big difference.
Some of their general responsibilities include:
- Organizing your due diligence
- Valuing the business
- Tracking down the most eligible buyers
- Sales promotion
- Ensuring confidentiality
- Obtaining funds for the transaction
- Assisting in contract makeups
So, how much is this going to cost you? Brokers are normally paid on a commission basis, so it depends on the person or company. Your business’ average income usually determines the commission rates. The general rule is – the higher the revenue, the lower the rate. Therefore, it's vital to understand the broker's commission structure. Don’t shy away from asking questions; you need to know all the details.
Many brokers will require you to sign an exclusive contract. It’s a form of guarantee that their time and efforts aren’t going to be wasted. However, before signing the deal, make sure to check their references. There’s nothing more frustrating than being locked in an agreement with a lackluster broker who can’t make the sale.
5. Industry Events
Small business events, broker meetings, and local entrepreneur get-togethers also present an opportunity for finding potential buyers. There are plenty of web chat platforms that allow you to engage with the local community from the comfort of your couch. However, the majority of meetings are still held in person, so keep that in mind.
Here are a few platforms you can check out:
Local meetings can be an excellent way to get in touch with ready-to-buy investors in your region. Unfortunately, it’s kind of a hit-or-miss situation. You may spend a lot of time in discussions that don't lead to a sale. Not to mention, you’ll have to drive to and from each conference/event, which can be time consuming.
Preparing your business for sale is critical to a successful result. Preparing it from day one is even better! Check our my article on FE International's website for How to Prepare your Business for Sale from Day One
Blair
FAQ
What to Prepare for Selling Your Online Business?
This is where things can get a little overwhelming. You should consider delegating this stage to an advisor, if possible. If you can’t afford professional help, here’s what you need to do.
- Use a broker – they're fees get taken out from the successful sale price so you don't pay them until its sold.
- Check the bank records and tax reports from the last three or four financial years.
- If there’s any equipment sold along with the company, make a list of it.
- Get the data on your business (traffic, seo work done, etc).
- Make duplicates of important documents to hand out to interested buyers. These include a purchase agreement, asset listings, website use and domain name, and security agreement.
- Provide information on how the website is run and/or an up-to-date working manual.
- Also, make sure everything connected to your online business in tip-top shape. All problem areas should be addressed before closing the deal. You don’t want to get a reputation as a scammer
How Can I Sell My Small Online Business Fast?
Rushing things is never recommended, even if you’re selling to a family member or former partner. Instead, if you’re desperate for a turnaround, hire a business broker to expedite the process.
A broker’s sole purpose is to act as a conduit between buyers and sellers. They know how to do a proper valuation of your company's selling point and mitigate potential shortcomings. Also, seasoned brokers have a vast network of buyers and banks, meaning they're more adept at locating serious buyers.
Can I Sell My Online Business Without a Broker?
Sure you can, but be careful. Many business owners opt for selling their company without a broker to avoid paying the commission. However, the potential risks may outweigh the financial savings. First-time sellers are prone to making mistakes that can leave them with the short end of the stick. If you’re really set on doing it alone, here are some tips:
- Prioritize selling to a familiar face
- Get guidance from seasoned, retired owners and executives
- Use reliable online resources like Small Business Administration, or the National Federation of Independent Business (NFIB)
Let's face it: You created your business; you know more about it than anyone else. Hiring a broker means you give up a lot of control over the transaction.
Sure, a good broker will ask the right questions, poking and prodding buyers to get the best response. However, they make the pitch based on what you’ve told them. If you have confidence in your own knowledge, you should be fine. Just remember to work on your negotiating skills.
Can You Sell an Online Business That is Losing Money?
Yes. Even if your company is losing money, you can still sell it. This isn't the standard route, so it requires you to think outside the box. The aim is to ensure your team, affiliates, and current clients all prosper from the transaction. You'll need to find a bold investor who believes in the vision and has the expertise to help turn things around.
Bear in mind that serious investors will want to know why the company is struggling. So before you start looking for a quick way out, you might want to get your books in order.
Need More Help? Our Top Picks Have Your Back
Having to sell your online business is a hard decision to make, especially if it’s your first time doing so. If you ever feel overwhelmed, consider turning to the following companies for guidance.
Flippa is a major online marketplace where people can purchase and sell blogs, online companies, and other digital real estate. By connecting the right people, they can sell anything from passion projects and side hustles to multi-layered online companies. In addition, the company streamlines the entire negotiation and transaction process, making it extremely simple.
Why We Like It
It is a huge marketplace dealing in all types of digital assets so the range and options to buy and sell online are vast with Flippa.
Empire Flippers are the world's most popular ‘curated marketplace for buying and selling existing companies.’ Since 2013 the company has sold over $93 million in Amazon Associates companies, partner websites, e-commerce businesses, and various other online businesses.
Why We Like It
Their vetting method and onboarding processes means that you only deal with real, motivated buyers and sellers of online businesses.
FE International is a multi-award-winning multinational M&A advisory firm specializing in SaaS, e-commerce, and content creating companies. It’s the preeminent valuation leader, having executed purchases for thousands of buyers and sellers. The staff comprises professionals with expertise in exit strategy, valuation, accounting, and legal matters, among other transactional skills.
Why We Like It
FE International have a broad international reach so you can tap into buying and selling opportunities and contacts you normally couldn't.
Sold on the Idea of Selling Yet?
Once you’ve decided to sell, you’ve already done the hard part. Nothing within the process can compare to making that initial step, whatever your motivation may be.
There are several ways to sell your business online, depending on your level of experience. If you prefer to stay on the side lines, it's best to hire a broker and let them handle the logistics. However, those who are more confident in their marketing skills can always handle things themselves. Just make sure your affairs are in order, and remember – slow and steady wins the race.
Thinking of selling up? Start 12 months out with my tips on setting up a roadmap to selling your business featured on Flippa.com
Blair
