Getting help selling a business with a business broker is a wise idea for many reasons, but if you own an Internet business rather than a brick and mortar business, it pays to be extra selective when it comes to choosing a broker. If you call a traditional business broker on the phone and ask if he or she can help you sell an Internet business, you’ll likely receive an “Of course!” in reply, but that doesn’t mean that you can expect the same type of experience when you use a traditional business broker to sell an online business. Opting to work with an Internet business broker, a broker who specializes in the sale of online businesses can give you several advantages, including:
1. Internet Business Broker Advantage 1: Broader Buyer Base
Most reputable traditional and online business brokers will have a pool of people who are interested in purchasing a business available that they can market a property to, but the make up of that pool will be drastically different. Most business brokers have a network of prospects within their geographic areas because most investors will want to be located near a brick and mortar business. Because online businesses can be managed from anywhere, online business brokers will have a much broader buyer base with interested individuals from all over the country and even the world. This gives you a better chance of finding the perfect buyer.
2. Internet Business Broker Advantage 2: More Specialized Buyers
As you know, it takes the right type of person to successfully own and manage an Internet business. Many people who are experienced at owning and running brick and mortar businesses may not have the skills or expertise necessary to handle an Internet business or may be hesitant to purchase one. If you choose a traditional business broker, your prospective buyers will likely be considering your business alongside more familiar brick and mortar businesses, which could make it hard for you to attract a qualified buyer. An Internet business broker’s buyer pool will be made up of people who specifically wish to purchase online businesses, giving you a clear advantage.
3. Internet Business Broker Advantage 3: Insider Knowledge
People who understand the business of online business will have lots of questions related to site performance. Common inquiries include the types of website infrastructure used on the site and the organic traffic rankings of the website. A traditional business broker is not likely to know what types of information an experienced online business owner will ask and not be able to quickly answer their questions. An Internet business broker on the other hand has ample knowledge about online businesses and will be prepared with answers to help position your business in a positive light.
4. Internet Business Broker Advantage 4: Valuation Insights
Because Internet businesses typically have fewer tangible assets than traditional businesses, valuations can be difficult to accurately gauge for those who are not familiar with e-commerce. As a result, traditional business brokers often over or under price online businesses. When you choose a business broker who specializes in Internet companies, you’ll have a much better chance of getting a fair price for your business and securing a buyer in a timely manner with a price that is attractive.
5. Internet Business Broker Advantage 5: Reliable Vetting
Just as valuing an online business is much different than valuing a traditional brick and mortar business, obtaining financing to purchase an Internet business is drastically different than getting bank loans for the purchase of other businesses. Many banks will have a much stricter underwriting process with online businesses due to the likely lack of tangible assets. Tighter credit standards may mean that an individual who would have no problem getting a real-estate secured business loan for a brick and mortar business may be turned down for financing to buy an online business. Traditional business brokers typically do not have the experience necessary to know whether or not a buyer will meet the likely stricter standards of financial institutions. As a result, time could be wasted courting a buyer who won’t even qualify for the loan that he or she needs to buy your business. An Internet business broker has a better understanding of who is likely to be able to obtain financing for the purchase of an online business, allowing for much better vetting.
While many traditional business brokers are skilled in selling brick and mortar businesses, selling an online business is very different. Even if the steps in the sales process are similar, an Internet business broker is better able to execute each step in the sale of an online business due to their expertise and experience in helping online business owners sell their companies. If you’d like more information about how we can help you sell your Internet business, contact us today.