If you’re in the market to sell your business, there are four main ways. These are ESOP, Brokerage, Private sale, and the Online marketplace. Before you choose one of these, you should consider your business’s specific needs and market.
Brokerage
A business broker will help you find qualified buyers and get your company’s best price possible. Since brokers work on commission, they want to sell your business for the most possible price. They will develop their valuation of your business, which should be close to an appraiser’s valuation.
A broker’s fee is typically a percentage of the selling price. Usually, this fee goes down as the selling price increases. For small businesses valued below $1 million, an 8 to 12 percent fee is common. A common fee structure is called the Modern Lehman Scale. The first million dollars will cost the seller 10% of the sale price. The second million will cost you 8%, the third million will cost 9%, and so on.
A broker can help you set a reasonable price by studying industry trends and current economic conditions. They can also use their extensive network to find a potential buyer. A broker can also help you with marketing and advertising to attract the right audience. These professionals can also help you identify prospects and negotiate a fair price.
A good broker will vet buyers and ensure confidentiality throughout the process. Due diligence is one of the most challenging parts of the process, and a good broker can help you through this phase easily. Approximately 50% of business acquisition deals fall apart during this phase, and a good broker will guide you through it.
Selling a business is a significant financial decision but can also be time-consuming. If you don’t plan, you may waste valuable time on the wrong buyer. It would help if you considered hiring a business broker to guide you through the entire process.
While a business broker can help you get top dollar, timing is critical. Ideally, it would help if you prepared your business for sale at least a year before the sale. It will give you more time to prepare and improve your business. The more time you put into improving your business, the more you can command a higher price. Furthermore, hiring a third-party company to assess your business and help you determine a fair market value is best.
Online marketplace
The online marketplace can be a great option, whether you’re looking to cash in on your online business or raise capital for a new business. The process can take months, so it’s essential to prepare your business for sale months ahead. Using a business broker can also help you sell your business faster.
One benefit of using online marketplaces is the long-term relationships you can build with your affiliates. The most popular e-commerce sites can attract millions of online shoppers, and most affiliates will only promote your products on those websites. You can even work with a publisher on these sites to promote your products. These sites often attract millions of visitors who are not there to read articles or watch cat videos – they’re there to buy.
A marketplace is also ideal for sellers who want to test new markets and sell more products. It is because a marketplace has a built-in customer base. It’s not uncommon for a business to see a massive increase in sales within the first year. And once the seller has a strong customer base, the process can be streamlined.
Another advantage of using an AnyBusiness is the low startup cost. Most online marketplaces make it easy for sellers to set up a storefront and upload product listings. Creating an account with a marketplace takes just a few minutes, and you can begin selling products on the same day. The simplicity of online marketplaces is appealing to many sellers.
Amazon is another online marketplace with a high level of trust. The company has over 80 million registered users, so there’s a big market and plenty of potential buyers. As a seller, you can list your products on the site and share them through social media. Another popular marketplace is Poshmark.
The next biggest marketplace is Walmart. Walmart offers a free marketplace for online sellers, and it’s ideal for sellers with complementary products. With no set listing fees, it’s an excellent option for new and experienced sellers. Facebook’s marketplace is also free for sellers to use. Setting up a product listing is simple, and Facebook will review and approve your products for the market.