How to Sell Your Business Online (For the Best Price)
When a business owner is ready to exit their business, they often don’t realize that there are multiple options for selling. One of those options is using the internet to make the selling process go faster and more smoothly. Online business selling allows small business owners to reach a large number of prospective buyers as well as providing resources for the owners that are considering selling their business.
Your Options for Online Business Sales
Many people dream of starting or owning their own business, but for a variety of reasons, sometimes even when they achieve that dream, they are forced to sell. For those looking to start or buy a business, purchasing assets from a business that is liquidating is often a great route. If you are looking to sell your business, here are a few ways you can do this:
- Marketplaces – In online marketplaces designed for selling businesses, business sellers can list their business, and business buyers can post what they are looking for. They exist to connect sellers and buyers and let them work out the terms of payment on their own. Other marketplaces work with the buyer and seller to facilitate the transition to the new owner and payment terms. These online marketplaces can also be a good way to facilitate business sales.
- Auction Sites – Auction sites operate by creating a sale listing based on your assets. The auction house can attract a range of interested buyers that competitively bid on your business assets. This route is becoming a more preferred method for selling a business, as the auction site handles most of the work for the business owner.
- Brokers – Brokers typically utilize their network to try and pair together sellers and buyers, particularly when the business is ongoing under the new ownership. The broker will take a cut of the sale as well and may charge a listing fee, which is what drives them to find the right fit for the seller and buyer. This also means that the seller will likely make less profit from the sale after the broker takes their fees from the profit.
E-Commerce vs. DIY vs. Auctions
The thought of selling your business online may sound unreliable at first, but using these online resources can help sell your business faster and more effectively than traditional methods. Here, we compare the pros and cons of selling online:
A business broker often has the resources that can help you create the necessary paperwork, such as a purchase agreement, to ensure the sale is legally binding. They will sort through offers and ensure that an offer is valid. They can also help out in a few more ways:
- Helping with ongoing businesses — if you’re planning to sell your business to another owner that will continue running the business, a broker will likely be the best direction. They are usually comfortable with the complex process of transition.
- Valuing your business – As soon as you decide to sell your business, you will need to put your finances in order. Once you have done that, a broker can help determine a fair business valuation taking into consideration a variety of variables.
- Confidentiality – You likely don’t want your employees, competitors, and vendors to know about the sale until the deal is done. A broker will keep your information private, even to potential buyers, while you continue to run your business.
- A network of buyers – A business broker has contacts with potential buyers that they vet and screen.
Unfortunately, there are always cons to any selling option when it comes to selling your business, and a business broker is no exception. Here are a few drawbacks to hiring a business broker:
- High fees – All those perks above come at a cost. The average broker will charge roughly eight to ten percent of the sale price of your business.
- Hard to find – There are a lot of people out there that may claim to be a broker, but there are some mediocre finds out there, and they can lead to a lot of problems. They will focus on selling your business fast to be paid as soon as possible, which can lead to a lower selling price. It’s worth the time to find a good broker.
- Length process — since a broker usually specializes in business transitions and exits, the process of selling can take much longer.
- Not selling individual assets — since brokers usually focus on selling ongoing businesses, they don’t spend much time focused on selling assets for the highest value.
- Lack of expertise – If your business has a specialized niche, your broker may not know as much about the market as you do. If this is the case, hiring a broker may not be the best idea.
- Conflict of interest – When you sell your business on your own, you only have your interests in mind. If a broker is working for the buyer and you don’t know it, you could be at a disadvantage.
You know your business assets inside and out, so you might be thinking about trying to sell it yourself. And though you know your business well, we want to give a fair warning that trying to sell it all by yourself is often not the best option. Not to say that there are no benefits at all, though. Here are a few pros of selling on your own:
- Familiarity – You know everything about your business. Maybe you even know some people that have shown some interest in buying your business assets.
- Selling price vs. fees – Having outside help costs money. If you can take on the burden all by yourself, you avoid outside costs.
But just like with other selling options, there are dangers to handling things on your own:
- Objectivity – Too often, business owners think that their assets might be worth more than they really are. They’ve spent years growing their business, which can result in emotions getting in the way. You will have to look at the market objectively if you are going to sell your own business successfully.
- Time – Selling your business on your own can take more time. Couple that with the requirement of continuing to operate and manage your business until you sell, and it could be more than you can handle.
- Experience – Have you sold a business before? You may be an expert at managing your business, but selling it is a lot different. If you haven’t sold a business before, it may make sense to enlist the help of someone that is experienced in selling businesses.
- Buyer qualifications – Even if you do have experience selling a business, the buyer you think is best may not be qualified to purchase it. There is a lot at stake, so be sure you do your due diligence to qualify a buyer before you waste your time.
When you hear the word auction, you probably think of a traditional auction where people meet and bid on rare items or online websites like eBay. But as many business owners are coming to realize, this is one of the best options to sell your business. Here’s why:
- Experienced in business sales - As long as you partner with an auction house that has a strong background in the business sale process, you'll be in great hands with a trusted auction site.
- Selling everything - A significant difference between traditional methods and auctioning is that most experienced auction groups are able to sell every asset within the business.
- Get the most value - Because a proven auction house can sell different facets of your business to different buyers, they can stimulate more competition around individual assets and drive up the price more. As a seller, that means you make more money overall.
- Sell quickly - Any business sale auction, be it online or in person, is a set date in which buyers gather to quickly and aggressively bid on the items for sale. You get to know the exact date when your assets will sell, and it's the fastest method of selling inventory for the most money.
- More potential buyers – An auction can be announced to a wide variety of potential buyers hoping to score a good deal. But what often happens is that they end up in bidding wars, which drives the price up. This is good news for you as a seller.
- You set the conditions – Bidders who participate in the auction must agree to your terms and conditions before they bid. Buyers are often more accepting of the terms because they think they will get a bargain price for the assets.
How to Sell Your Business Online
Regardless of how you go about selling your business online, there are a few things you can prepare to make the process go as quickly and easily as possible.
- Start gathering your information – Put together all information regarding your company’s financial documents and assets.
- Determine a fair asking price – Many auction companies will have tools to help a seller determine a standard, reasonable selling price for their assets.
- Find a serious buyer – The sooner you find a potential buyer, or buyers, the sooner you can sell. An auction house can take this pressure off of your shoulders.
Weeks Auction Group Makes It Easy
There is a lot at stake when you're selling your business. Not only do you want to sell fast, but you also want to get the most value. More than anything — you want relief from the financial stress of owning a business. Regardless of whether you are choosing traditional methods or opting to sell online, having the right processes and experts on your side can make the sales process and transition faster and smoother.
At Weeks Auction Group, we believe it should be much easier for business owners to sell their business fast while getting top dollar in the process. We’ve spent over 60 years successfully helping business owners sell every part of their company at the highest value possible. To talk about how we can help you sell your business quickly, contact us today. Don’t continue losing sleep night after night, worried about selling your business. We can help sell faster than you could ever imagine, and you’ll never have to think about it again.