Selling Your Online Business - dummies

By Shannon Belew, Joel Elad

Selling your site is considered an exit strategy. Yet, selling your site is sometimes the only way to grow it. You might be tired, tapped out of money, and looking for a way out. Maybe you recognize that your site has fantastic potential and you lack the experience and knowledge to make it happen.

You might also have a limited window of opportunity, or you simply might not have the resources to expand your site within that optimal time frame.

Keep in mind that developing a plan to identify a buyer is quite different from someone unexpectedly calling you with an offer. If selling is your strategy, preparing your business can take as long as six months to a year. If you have a smaller site, or have been lax in sticking to a management regimen, you need a few months just to clean up your organizational act.

Depending on your asking price and the current market, finding the right buyer can take another year (or longer). This time frame is where you see the difference between selling as an exit plan and selling as a growth strategy. When expansion by selling is your goal, finding the right buyer match is critical. A professional broker can help you identify key characteristics.

In general, you want to look for someone who has these characteristics:

  • A shared vision for your site

  • Experience in taking a business beyond the start-up phase or past the early-growth years

  • Peers in the industry who can substantiate her reputation and skills

  • Verifiable liquid assets and net worth to invest in the business beyond the purchase price

You can locate a reputable business broker through BizBuySell. The site has a free, searchable database that’s broken out by state.

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You don’t have to work with a professional to sell your site. However, a broker often has extensive contacts of potential buyers and can speed up the selling process. Regardless, selling your site might be the ideal opportunity for you.

Following are the pros of selling your company outright:

  • You receive a potentially large chunk of change for all your hard work.

  • The burden of growth is removed.

  • You can try something else.

Here are the cons of selling your company outright:

  • If you stay with the company, you lose control.

  • If you leave outright, you have to start a new business from scratch, find a job, or retire.

  • You have no guarantee that the buyer will succeed in growing the site.

  • Because payment terms might be spread out, realizing the full sale price can take a while.

  • The buyer may require you to sign a noncompete clause, which means you cannot compete with the buyer by starting another business in the same industry for many years. Given that your experience is heavily tied to the company you just sold, this could limit your opportunities in the future.

  • The business could go under before you collect all your money, leaving the site wiped out and you fighting in court for restitution.