Over 90 percent of people who set out to acquire businesses, never do so. However, with the right set of information, data and assistance, you are likely to succeed. Part of the information required is how to structure your offer in such a way that it is irresistible by the sellers. We take a look at Buying an Internet Business – Advanced Offer Structuring How Do I Sell my Online Business? A How-to Guide Should I Use a Broker to Buy an Internet Business?
Advanced offer structuring
How you structure your offer determines the kind of sellers you attract. In order to attract serious sellers, you need to think through the deal from a comprehensive and thorough point of view. The first thing to consider are the prevailing market conditions. Is the market in your favour or is it inclined towards the seller’s side? A buyer’s market gives you an advantage because you can control the offer price while a seller’s market limits this freedom. By identifying the prevailing market conditions, you can calculate an offer that is acceptable to both parties.
What does the deal entail? In most cases, buyers look at the online business and forget to check out the social media and other online resources supporting the success of this business. A holistic deal ensures that you acquire the business and its infrastructure in order to avoid disrupting the operations. The social media pages, listings on different websites, the applications that have been developed and so on need to be identified and acquired. Thorough online research can help you identify these resources for inclusion in your offer while expert consultants can assist you in valuing all these resources accurately.
Always remember that the seller is likely to present a counter offer. Therefore, as you structure your offer, you should leave some room for negotiation. The negotiation may be involve finances or it may involve the inclusion or removal of some of the assets from the table. Ensure that your offer takes this into consideration to avoid unpleasant surprises.
When structuring an offer, ensure that the expected time line allows for sufficient research, negotiations and transfer of the business. Rushing the negotiations or research stage could have detrimental consequences in future. Important information could be overlooked or key resources left out when you are in a rush.
Should you use an online broker to buy online business?
This is completely dependent on your skills, experience and even believe in oneself. If you have the competencies and experience required to negotiate the deal and acquire an online business, then you may not require a broker. However, in the case that this is your first business acquisition, it is advisable to work with a broker. The following are some other circumstances that necessitate the use of a broker.
When you are acquiring a successful online business with a wide range of products and diversified market, a broker has the resources to carry out in depth market research which ensures that you have sufficient information to make an informed choice. Such a deal can be complicated to draft and may require a team of experts including valuation experts, negotiators, a broker and legal personnel.
In other cases, you may prefer to use brokers in order to take advantage of their experience in acquiring businesses in a specific field. Experience is important in identifying information that the seller may not be disclosing, identifying cases where the business value has been inflated or where the sellers are not compliant with different legal requirements. Buying a business without a true and representative outlook could result in financial losses.
At the end of the day, the aim is to buy the most profitable and stable business affordably. If you require an experienced broker or team to achieve this, so be it. On the other hand, if you have the capabilities to pull it off on your own, then go ahead.
