#onlinebusinessforsale

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Turner Butler successfully sold the Indigo Scooters the well known online e-tailer of scooters & leisure products. 

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Website Properties, LLC - Website Brokerage

As a business owner, when the time comes to sell your online business, one of the first questions you will have to address is “can I sell my business myself or should I hire a website broker to assist with the transaction?”

While it may be possible to manage the process yourself, a website broker will bring many benefits to the table that could save you both money and hardship. Even the most educated of business owners have made mistakes costing tens of thousands of dollars at and after leaving the negotiating table with a seemingly successful sale of their online business property. Having a broker with years of experience of selling websites and other type of online business property at your side can help ensure the process runs smoothly and ends with you maximizing the price potential of your business.

Hiring a website broker will help you to navigate the 3 key steps to selling your business; Valuation, Representation and Negotiating & Closing.

Valuation

Getting the price right is step one and it is important for several reasons. Quite obviously, every business owner wants to sell their business for as much as possible. An experienced Website Broker will be skilled at evaluating the key aspects of your business to estimate its market value. Financial results play a key roll and should be reviewed in detail to ensure they are presented in the best light. They often are the first aspect of the business that garners the attention of a buyer, so getting them right is key to building interest.  You’ll want to look for a broker that is willing to engage in a detailed financial review rather than just perform “thumb in the air” valuations, this step can make or break the selling price.

In addition to financial results, your Website Broker will also want to review all the key elements that make your online business tick. A business purchase is a “risk-reward” decision process for a buyer. Your Broker will be on the look-out for aspects of your business that make your website business a safe bet for a buyer and use them to assess value. How long have you been in business? Are your revenues stable or growing? Does the business have any key competitive advantages that help secure the ongoing success of the business? All these “intangible” facets will help increase or decrease the value of the business based on the way in which they affect perceived risk for the buyer.

Finally, an experienced broker will have a keen insight into how the marketing is valuing and bidding on businesses in the various market niches. This experience will help to combine the financial result and in-tangibles of the business into a valuation that both maximizes the selling price of the business and the interest level of prospective buyer. Listing too high can chase buyers away, too low can leave money on the negotiating table.

Representation

Once you have come to a selling price that works for you and your business, the next step is to take your business to market. Marketing the business requires creating appropriate sales collateral for your opportunity and then using that collateral to advertise the business online. For a website business, the standard marketing collateral used is a business prospectus.  This document will highlight all the great features of your business giving website buyers the information they need to determine if your business may fit their acquisition criteria. The prospectus is an important document as it offers the first impression to buyers and must capture their attention. In addition, a well written prospectus will also provide the right level of detail to address most of the common buyer questions, helping to gain their interest while also reducing the number of questions that need to be fielded during the remainder of the sales process.

Once your business is publicly advertised, the next phase of representation your Website Broker will perform on your behalf is to manage the sales process. This step is time consuming and having a Website Broker allows you to remain focused on the important task of running the business rather than selling it. Your Broker will field questions from interested parties, filter out unqualified buyers and ensure your valuable time is only spent with real potential buyers.

Negotiating and Closing

As any parties show serious interest in your website, a broker will be essential in negotiating the terms of incoming offers to maximize the best exit for the seller. This is where an experienced Website Broker can pay real dividends as they use their background, market competition and buyer criteria to craft a deal that maximizes the value for their clients. As your transaction progresses, they will ensure that every aspect of the deal is handled professionally; supporting and pushing the deal as appropriate to keep it moving towards closing. They should be managing every aspect of the closing from Letter of Intent through due diligence, preparing the sales agreement and even helping with the transfer of the purchase price via escrow.

Selling your website business is likely to be one of the most important decisions you will make this year. You’ve spent many years building and nurturing your online business, so you want to ensure you exit on a high note. At Website Properties, we are here to ensure that the sale and transition of your internet business is handled with care – professionally and competently. Our client focused staff will help every step of the way, always representing you and your company with the highest degree of quality and impeccability.

If you are looking for a website business broker with the exceptional expertise to sell your internet business, please reach out and we would love to see if we can be of service.

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[turnerbutler]

The on-line e-tailer of household items and accessories cottagedoorsgatesandfloors. com was sold through Turner Butler off an asking price of £325,000.

[websiteproperties]

Website Brokerage - Website Properties, LLC

For many online entrepreneurs, selling their business is often the end game.  They start with an idea, develop it into an online business, grow the website or storefront into a stable money-making machine and then sell the business to prepare for their next venture or in some cases, retirement. Understanding how the market values an online business helps owners to both focus on the aspects of their business that create value as well as understanding its current worth to assess if it is the correct time to exit.

If you are currently developing an online business or thinking about selling your ecommerce website, understanding how these types of businesses are valued is essential. Many different factors can affect the business valuation process and managing these variables is key to getting high quality offers for the business when it’s time to sell.

What Influences a Business Valuation?

When valuing a business, three main motivators play a role in determining your business’ worth: potential, transferability and risk. “Potential” refers to the ability and likelihood of the business to grow and be profitable. “Transferability” refers to how easily the business can transition from one owner to another. “Risk” refers to the potential for loss associated with taking over ownership of the business.        

Specific Factors that Affect Business Valuation

A business’ potential, transferability and risk are affected by several specific factors which play a role in determining the value of your internet business for sale. Understanding these factors allows you to not only estimate your business’ current value, but also to improve it if you aren’t planning to sell the business right away. These factors include:

· Brand identity - A strong brand identity leads to a higher business valuation, while a weaker brand identity can reduce the estimated value of your business. This is particularly important if your business depends heavily on marketplaces like Amazon.com, where price competition within and across brands is fierce, for a significant portion of its sales.

· Financials - All financial aspects of your business can affect its value. Examples include assets you own, liabilities you owe, future commitments, supplier agreements, the specifics of your payroll procedures, your business’ scalability and more. Having clean, verifiable finances for your business is an important part of establishing trust during the sales process. Value is enhanced by sales and profits trends that show stability, or even better, sustained growth.

· Owner involvement - The owner’s level of involvement may also affect your business’ valuation. If the website could not easily operate without your expertise, connections or reputation, your business may be worth less than you expect. To be valuable, your business will have to go on without you. It is always best to design the operational aspects of your business to allow the owner to leave gracefully without negatively affecting its performance.

· Customer base - An active, loyal customer base increases the value of your business considerably, especially if these customers are expected to remain active after a transfer of ownership. Statistics regarding email list size and revenue from return-customers help to support this attribute.

· Traffic - Another factor that can impact the value of your ecommerce business is website traffic. However, it is important to remember that not all traffic is the same. For example, organic search traffic traditionally generates more revenue than many other sources of traffic like PPC.

Types of Business Valuation

Not all business valuation methods will produce the same results. For example, business valuations may be formal or informal. Formal valuations are detailed processes that determine an absolute value of your business and are often performed by legal or accounting firms. This type of valuation is common for larger companies or when you are applying for a line of credit or trying to calculate your net worth. An informal valuation, on the other hand, provides insight into your business value based on key attributes and current market trends.

It is also important to note that the result of a business valuation is not necessarily the same as market value. Your business’ market value is whatever a buyer is willing to pay. This amount may be higher or lower than the result of a formal or informal valuation. It may also differ from your expectations. It is important to go through the valuation process with an individual or website broker versed in e-commerce business attributes along with current market multiples being paid for businesses in your category to ensure your expectations are correctly aligned with the market.

Understanding Business Valuation Methodologies

Multiple of Seller’s Discretionary Earnings

The most common valuation method used when determining the market value of an ecommerce business is a multiple of the seller’s discretionary earnings. This method looks at the net profit the business earned over the most recent 12-month period and multiplies it by a specific number. In most cases, the multiplier will range from 1.5 to 4, with most multipliers being no more than 3. To determine the exact multiplier used in this valuation method, several factors are considered. These factors may include the amount of work required to operate the business, as well as the business’ scalability, capital requirements, consistency and revenue growth.

Discounted Cash Flow Analysis

A second method that may be used to determine the value of an ecommerce business is discounted cash flow analysis. The purpose of this valuation method is to estimate the buyer’s future return on investment, while taking into account the changes in the value of money over time. To calculate a business’ value using this method, operating cash flow from the last 12 months is reduced by capital expenditures to determine free cash flow. A cash flow growth rate is projected for the next five years and discounted by the business’ weighted average cost of capital.

Previous Sales

Another way to estimate the value of your business is by looking at recent sales of ecommerce businesses in similar markets. However, although this can provide you with an idea of what your business may be worth, it isn’t as accurate as the other methods listed above. Even similar businesses may have valuation criteria different from yours, and many other factors can affect a final acquisition price, making these numbers less reliable.

Estimating the value of your business on your own can be difficult. To make sure you have an accurate estimate of how much you can expect to receive for your ecommerce website, don't list your business for sale until you have spoken with an experienced website broker.

Still thinking: Here is a link to another Website Properties article simply titled "Website Brokerage" which may prove useful for calculating the value of your online business.

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