If you are at the stage of your e-commerce business where you are looking to sell the company, then a critical decision will be whether or not to hire a broker.
Selling a business on your own may save you the initial broker fees, but the experience and guidance of a skilled broker can often mean you get a better price in a faster timeframe.
With the industry growing rapidly and merger and acquisition activity increasing, using a broker who has knowledge of the e-commerce sector can help you leverage this demand to your advantage.
In our latest blog post, we explore 6 reasons you should consider hiring a broker when selling your online business.
One of the core benefits of working with a broker when selling a business in any industry is that a formal valuation is carried out to accurately determine the value of your business.
Valuations take into consideration a wide range of factors including assets, profit margins, growth, contracts with staff and suppliers, product and service offerings, marketing performance, location and much more.
Without a broker on board, carrying out a valuation can be difficult. What’s more, a valuation that’s been carried out by the business owner themselves will lack credibility when negotiating with potential buyers.
Valuations of e-commerce businesses can be more complex as they are more reliant on intangible assets such as online reputation, domains, the e-commerce model being used, website traffic and online search rankings.
In addition to carrying out a valuation, a business broker can often identify areas that could be improved upon to increase the value of your business before it goes to market. For more information, be sure to take a look at our blog post on maximising the value of your business before selling.
Using a broker gives you access to their years of industry expertise which can help ensure you get the best deal through an accurate valuation, access to a network of motivated buyers, impartial advice and much more.
However, despite rapid growth and the majority of people in the UK being e-commerce users, many brokers still do not offer a specialist service for online businesses.
Specialist e-commerce brokers are likely to have a pool of buyers that are interested specifically in online businesses and a better understanding of valuing an e-commerce business.
For these reasons, when selecting a broker, it’s recommended to seek out one that offers a dedicated service for online businesses.
Finding Potential Buyers
There are many places you can look to find buyers for your business including networking groups, dedicated websites, broker websites and even social media.
The challenge many prospective sellers face when going it alone is the time spent working through offers to find serious buyers. This can often lead to compromises, whether it’s taking a lower figure, selling to somebody who doesn’t match your values or even fatigue which leads to taking the business off the market altogether.
Business brokers have access to groups of buyers and can quickly shortlist those that meet your requirements and are looking for opportunities within the sector.
Furthermore, a good broker will use targeted marketing strategies through mediums such as local business networks, referral partners and digital campaigns to attract further interest in your business.
Negotiating the Deal
The negotiating table can be one of the most daunting parts of selling a business alone and may lead to the seller making concessions due to pressure from the buyer.
In reality, the negotiating table should be an opportunity for the seller to get a better deal by presenting their case to the buyer, or in many instances, the business broker working on behalf of the buyer.
Business brokers are experienced when it comes to negotiation and will not be phased by the boardroom or pressure from the buyer, having this professionalism and confidence on your side can often result in a better end result.
Completing the Deal
Completion of the deal is without doubt the most critical phase in the process of selling a business, but it’s often the step that sellers are least prepared for.
This important stage ensures that both parties are satisfied with the conditions of the deal before a legally binding document is signed to transfer ownership of the business to the buyer.
As a strict legal process must be followed, failure to prepare for this can result in delays and further cost, which in some cases could even make the buyer back out of the deal.
A business broker ensures that the legal process is followed exactly using their own expertise coupled with a network of industry professionals including lawyers.
Looking to Sell Your E-Commerce Business?
If you are interested in selling your e-commerce business, using a broker has many benefits to going it alone and can save you time and money.
To find out more and arrange a no obligation consultation with one of our team, give us a call today on 0117 379 0117 or fill out a contact form and we will get back to you.