The Top 4 Items You Need Documented When Selling Your Website Through a Broker

By Blogtrepreneur

Providing the right information to a prospective buyer is an important step in selling your website business. A clear, conceive presentation of the business not only helps create interest, it also helps build confidence with buyers that the business is well run and organized throughout. When selling your business through a professional Website Broker the process will almost always start with the collection of this key company data.

The information gathered and submitted suits two purposes. Firstly, the website broker will review the data in order complete an accurate assessment and valuation of the business. Pricing the internet business is a very important step in the process to be sure it is listed at a fair market value based on current trends and is set at a multiple that attracts interest while maximizing the seller’s exit.

Secondly, the broker will utilize the details provided to create a professional marketing document to present to prospective buyers. This document is typically called a Prospectus and is an important part of representing your business. Think of it as the “market brochure” for your company. It should not only present your company and its key characteristics in the best light, but it should also address the majority of typical buyer questions. This will allow buyers to quickly access your business and determine if it meets their needs while addressing much of their introductory questions so as not to consume the seller’s time with repeatedly answering the same queries. Professional Website Brokers will invest a significant effort in creating your prospectus as they know its value for setting the right tone with buyers.

The Top 4 Items to document and submit to a broker will include:

  1. Monthly Profit and Loss Statements
    The owner should submit Monthly P&L Statements for the online business in Excel for a period of 2-3 years as well as for a Trailing 12 Month period. Notes regarding any owner compensation, discretionary or personal items, are also helpful so the broker can isolate only the business’s true operating profits. The financial details need to include all of the revenues, cost of goods sold (COGS) and operational expenses on a monthly basis so that a buyer can identify growth trends and seasonality. These financial details will ultimately need to be corroborated with all merchant credit card, banking accounts and tax returns during due diligence when an offer is accepted so the buyer can confirm without any doubts that the numbers are accurate.
  2. Traffic Stats
    Other critical data points come from the traffic analytic details from Google Analytics which provides information on unique visitors, pageviews, mobile devices, country, time on the site, conversions, key words etc… Included in this category of detail is also the organic and paid traffic based on keywords relevant to the niche. This provides buyers with the understanding of how sales are being converted and the cost of this conversion. It also highlights the various channels that the business utilizes to generate sales. For example – Pay per Click ads on Google, Amazon, Ebay, affiliate driven sales and social media efforts such as Facebook ads.
  3. Customer Data
    Providing counts/stats on the customer database, subscribers or email list and repeat orders not only offers a buyer a glimpse into historical customers, but offers a hint at the future potential of the customer base. Many e-commerce businesses offer a free newsletter or product discount coupon to entice visitors to sign up by sharing their email address or other contact data. These lists have value beyond by providing a new future owner with an audience to instantly market to after acquisition.
  4. Proprietary Fundamentals – In addition, providing details on proprietary elements such as unique products, formulations, software, systems, vendors and/or client contracts are all very important fundamentals that need to be included in the offering memorandum (prospectus) that prospective buyers review. Establishing unique appeal in the marketplace has become an increasingly important element of brand development and holds even greater importance for Amazon FBA based businesses. An established brand can have a significant bearing on getting a better market valuation as well. If there are any patents or trademarks and any other intellectual property (IP) that the business owns including memorable domain names, these need to be emphasized in the prospectus.

Providing a broker with these details will go a long way in maximizing an exit when selling an online business. By submitting these items, a broker can not only accurately value the business at a level to attract interest/offers but he/she can create a quality presentation of the company with the degree of details needed for prospects to determine if an opportunity meets their acquisition criteria. Offering a comprehensive, detailed prospectus available for qualified prospective buyers that includes all of these 4 major areas will convey greater confidence and trust and lead to better offers with quicker closings. As long as the information provided is accurate, clearly documented and easy to verify in due diligence, the seller will have a successful exit.

The post The Top 4 Items You Need Documented When Selling Your Website Through a Broker appeared first on Blogtrepreneur – For Busy Entrepreneurs.

      

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