Not every business can find prospective buyers without getting the word out there. In this digital age, the most surefire way to find them is to sell your business online and list it in marketplaces with thousands of others. But that doesn’t make it simpler to put your business for sale, either.
There are plenty of stages to selling a business, online or not, but here, the focus will be on how we can make a generic business listing in an online marketplace and how to make the most of it. There are plenty of considerations you need to take before you can put up your business for sale, so let’s get into it.
Before You Can Put Up a Sale
Whether you have a small business or a mid-sized enterprise, always consider hiring a third party to help you oversee the sale or at least help you manage the seemingly trivial aspects of it. For example, you typically wouldn’t want to list your personal or even business numbers on the online listing, as your broker or consulting firm would be the middleman for it.
This would allow you to filter out any buyer who might waste your time while ensuring that any sale is fair and mutually beneficial. Maybe they offer to buy only 25% of the business in exchange for a much larger share of the profit. Perhaps the offer isn’t as attractive, but they’re still interested. Having a third party help you through it can significantly benefit negotiations.
You don’t need top management consulting firms to ensure your business is prepped for sale. However, you do need a few good ones, and at Winthorpe Capital, we are always proud to provide a personalized service while having the resources of a more prominent firm. It’s the perfect middle ground to get reliable, outstanding service.
Financial Wellness Programs
Most employers, blog posts, and online personalities talk about financial wellness for the individual, but at Winthorpe, we have a different financial wellness programs–one for your business. Here, we look at your business’s financial wellness like your doctor would look at your health.
These financial wellness aspects don’t just deal with cash and capital but also with other aspects, such as regulatory compliance. After all, for your business to be financially healthy, it to be far less privy to financial burdens such as:
- Higher insurance premiums
- Reputation and public sentiment issues
- Security concerns
- Potential lawsuits
Aspects such as regulatory compliance aren’t just crucial. Still, they’re also notoriously tricky due to constantly changing, so being financially healthy today doesn’t mean your business will continue to do so tomorrow. However, it puts you in the best possible position to eliminate potential concerns regarding your company’s financial well-being, allowing you to get the best deals when putting them up for sale.
It goes without saying, but your business needs to have its books in order if you want to find a buyer. They provide proof that you’ve been running it legally, paying taxes, and fulfilling debt obligations, and they also put the validity of your business in stone.
Moreover, having it prepared smooths the discovery process considerably. The discovery phase is when the buyer (and the seller) gather as much information as they need.
Of course, some aspects under Non-Disclosure Agreements and client information cannot be shared, so third parties and consultants might be necessary. Legal counsel is also critical for ensuring nothing gets misused.
Even though the discovery phase occurs well after you’ve found a prospective buyer, preparing for this process before you list for sale is essential as it gives you an edge, even if it doesn’t give you a competitive advantage.
What To Consider for Your Online Listing
Selling businesses is complicated; even if you prepare for everything, it won’t get simpler. However, being prepared and using your listing effectively does prevent things from getting even more complicated. So, here are a few considerations to ensure you position yourself well for selling your business online.
Remember, just because you’re selling your business online doesn’t mean it cannot be physically located in one area. Hundreds of businesses are listed online every single day, so you’re not just competing in doing business but also in selling it.
That’s why one of the most important factors is the physical location. While there are plenty of businesses whose headquarters might as well be a person on a laptop anywhere in the world, that doesn’t mean potential buyers would be any less risk-averse. Even the most lucrative businesses must be carefully considered for every aspect.
A physical location adds a layer of risk aversion because the potential buyer could now visit your location and see you at work for themselves. So, in the listing itself, make sure you are at least clear about your location, even if you don’t provide the address in the sale. Not providing addresses is a common practice because business owners typically prefer confidentiality until a serious and interested buyer comes their way.
Financials, Culture, and Other Details
Take a scenario where employees in a company are put under new management. They hire outside managers to handle the day-to-day management tasks, and those new hires employ their own methods without understanding the employees or their capabilities.
Perhaps they overestimate them, perhaps they underestimate them. Perhaps everything runs perfectly. However, that doesn’t fix the communication gap, which is bound to cause problems later on.
The same should be considered for buyers. They aren’t just buying your business outright like a regular transaction. They might need to visit the premises, meet the employees, and see the work culture. If it’s a company with offices and a corporate structure, they must ensure the buyout isn’t disruptive.
All this requires that you aren’t just upfront and direct but also accommodating to the buyer. You need to make sure there aren’t any outstanding debts, liabilities, or legal concerns you need to address before you go through with the final sale.
Market it as an Advertisement
You’re not selling a product, but you’re still selling, which means you still would want to hook buyers to your online listing. The tried and true methods for marketing and advertising will still work if you do it right.
That means your ad must include a strong, compelling headline. Even if you’re selling your business because you’re going under, there is always a benefit that you can present, so make sure your listing has it displayed front and center.
Remember, you’re competing against other sellers, too, so you’ll have to stand out for any buyer even to read your listing, let alone reach out to you. Present the best of your business, and make sure it’s available for the buyer to see. It’s like putting something on display. You want its best side to be visible to shoppers passing by.
List in Multiple Categories
Most will skim over this when considering selling their business but understanding the exact category or categories your business lands in is advantageous and presents an opportunity.
For one, no business is limited to a single category. When you sell your business online, you can put it in multiple categories. If your business sells cleaning services, you can list them in service-based business, home-service-related categories, and cleaning services. Of course, it depends on the platform, but it gives a rough idea of what it can be.
You are casting a wider net by putting your business in multiple categories. Some buyers may search for businesses, some may want to look for those near them—every single factor of how you list your business matters, including its category.
When a Buyer is Found
If you successfully find buyers for your business, that doesn’t mean the process is done. In fact, it’s just beginning. However, before you proceed with any business, one of the first and most important things you should do is to sign a Non-Disclosure Agreement.
This NDA is meant for both you and your buyer and to make sure anything discussed or presented in any meetings does not get leaked. A signed NDA allows both parties to disallow the sharing of sensitive information legally. So, if you share any details of your business that may have client information, you can rest assured that even if the buyer doesn’t go through with the sale, they are legally bound not to use any of that info.
This allows anyone selling their business to keep potential corporate espionage at bay. Even if it may seem like corporate espionage is a stretch in 2023, one may be surprised by just how common it actually is.
So, here they are. A few things to consider for selling your business online. Of course, having a consulting firm is not something every business can afford, so make the most of these so you can make the process smoother.