If you sell a domain, a buyer might want an invoice, here’s how to whip one up

 MorganLinton.com: I was going through some threads on NamePros tonight and came across a topic that I imagine a number of new domain investors run into from time to time. While most of your domain sales likely will happen without any kind of paperwork required from your side, sometimes a buyer will want an invoice – […]

Sell more domains with a crowd – DNW Podcast #294

Squadhelp is becoming a formidable player in the domain aftermarket.

It’s one thing to list your brandable domains for sale. It’s another thing to list them for sale and have people suggest them to end users at the exact moment they’re searching for a name. That’s one of the many benefits of Squadhelp, a crowd-sourced naming service. On today’s show, Squadhelp CEO Darpan Munjal explains how the platform works and talks about the company’s new white label domain marketplace system. You can see the white label marketplace I created here.

Also: Walmart’s odd domain registrations, Verisign takes action against Covid-19 domains, new Sedo brokerage tool and more.

Sponsor: DAN.com

Subscribe via Apple Podcasts to listen to the Domain Name Wire podcast on your iPhone or iPad, or click play above or download to begin listening. (Listen to previous podcasts here.)

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How to sell a SaaS company doing $1M ARR with 70% margins: What we’ve done to get 70+ interested buyers

My friend is selling her Software as a Service (SaaS) company. She hopes to do this anonymously due to competitor and staff concerns.

I've been helping her sell it over the past two weeks. In this post I'll share about her company, why she wants to avoid brokers like FE International, what we've tried to get the word out, what worked best, and where she is now in the process.

Note: The point of this post is NOT to solicit offers. She's gotten tons (74 as of today, Monday, July 13, 2020). The point of my post is to show you her business and how we shared the data to solicit potential buyers. Perhaps it will be helpful to you when you want to sell your own company. To comply by this sub's rules, I will not link to my original blog post until I am given moderator approval (requested but no reply).


  • Friend has been running a SaaS for 4 years
  • The software is marketing- and ecommerce-related
  • Now she is ready to exit
  • Numbers are good: $ 1M ARR and 70% profit
  • Growth was flat in 2019, and up in 2020

Originally posted on my blog with fancy illustrations, plus a more SaaS-specific earlier version posted a few days ago to /r/saas. I've included the most relevant info and updated data for /r/startups below.

Company info

What is it?

The company makes a website add-on to help sellers boost their online sales. Half of their revenue comes from clients who use the product on their Shopify stores. It is used by online stores, schools, and other SaaS businesses.

With apologies for being vague: she's asked me to keep it extremely anonymous to not identify her or her business.


Today there are 5,000 paying customers. Each pay between $ 10 and $ 50 per month.

Employees and Team

Monthly expenses for developers, engineers, and support is between $ 15,000 and $ 20,000 per month.

The company pays its team as contractors. They are willing to stay onboard to continue development and maintenance.

Revenue and Growth

Currently $ 1,000,000+ of ARR with an approximate 70% profit margin as of July 1st, 2020.

First-year sales were approximately $ 125,000.

The best month ever was in 2018 with $ 154,000 in sales. That included the recognition of one-time revenue.

Peak MRR without one-time sales revenue was $ 111,000 in February 2019. Sales decreased later in 2019 but profitability increased dramatically.

In June 2020, MRR was $ 88,828.

2020 revenue has been growing. Every month, for the past four months. The founder attributes this recent growth to many new businesses and ecommerce companies being created in 2020.

Sales expenses

There are no sales members on the team.

Most new clients find the product organically. They receive 700-1000 new signups per month.

Marketing and CAC

She spends $ 2000 per month on marketing now. For the past few years, it was always under $ 500 per month and only on branded keyword searches.

Recently she has hired a part-time contractor to help with marketing (cost: $ 1200 per month fixed). She has increased her advertising budget to $ 800 per month (variable).

This budget is spent on Shopify ads, retargeting ads, and Google ads. Primarily it is still branded search terms, but now with some additional keywords.

Customer acquisition cost (CAC) is estimated at $ 2.70.


The churn is estimated at 7 to 9%.

This is a screenshot from Stripe.

It represents about half of the customers. The other half are on Shopify. Maybe during due diligence she could use Chart Mogul to combine subscription data from multiple sources.

Reasons for Selling

The founder recently launched two new ventures. She prefers product-market fit challenges over continued maintenance.

Her best alternative to a negotiated agreement (BATNA) is to further reduce her involvement in the day-to-day operations, perhaps by hiring her own COO. She would then extract dividends from the company in excess of $ 60,000 per month.

Why No Brokers?

FE International is the most popular broker / website for online companies to be sold. But she does not want to list there due to the negative perception of being seen as down-market by potential private equity buyers or family offices.

How We Marketed It

All of the above information, plus some more stuff about the existing team and additional assets, was posted as a blog post on my personal website.

Link to my blog removed, but with moderator permission I can share here or in comments.

I paid an illustrator that I love working with around $ 150 to help me add some color and imagery. Then I shared the post to my Twitter, asked some friends to help RT it for momentum, and sent it to my private email newsletter.

We also submitted it to MicroAcquire who Tweeted it and shared it in their newsletter – great free resource and super nice guy.

Special shoutout to Andrew Wilkinson and Tiny Capital and WeCommerce, who it seems like every third person recommended we talk to regarding selling her company. We're well aware of them, they live up to their reputation, and I have nothing but good things to say about them. That being said: My friend wanted to shop for offers. And I was happy to help her do that.

Offer Stats

And that's not rocket science: there's a lot more info in the blog post, and it paints a more compelling picture of the business. If and when you decide to sell your startup, you would be well-served, in my opinion, to do a public and thorough writeup of your company.

Next Steps

This past Saturday morning we emailed all of the prospective buyers with an update. Nine of them submitted updated bids to reach her price threshold.

She and I recognize that it is hard or impossible for serious buyers to make a serious offer without knowing the company name, specific industry, or without seeing financials. But her goal in getting "estimate" bids was to help eliminate lowball offers.

She's currently reviewing all of their messages and offers. Next she will filter out the "bad" ones, with a bias towards those who have done SaaS deals before (to execute faster).

She's also preparing detailed financial reports with the goal to finish those by Wednesday night (July 15th). Then she's going to share those to her top bidders, and then ask for an updated offer from each based on her financials.

Finally, based on all of that, she plans to ask her top buyers to fill out an NDA, at which point she'll reveal her business and her identity.


Protecting her identity has been an interesting way for me to get involved and see how this is done. I've had two successful prior exits – which I won't plug for fear of violating the rules – but none have been in the SaaS space (and neither generated even a fraction of interest as this has, which makes me believe: damn, this is a hot space!).

If this post has been helpful, I'd be happy to ask her to post here directly when the sale is finished to share what she learned, what she wishes she would have done sooner, etc. Or perhaps I could make an update to this post in a week or two as the negotiations with buyers continue.

Please do not contact me with any inquiries to purchase this business. I am just a friend helping her out. Her contact information is listed on my blog post announcing the sale via a Google Form. You can find that post with a Google search for "nick gray company for sale".

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Startups – Rapid Growth and Innovation is in Our Very Nature!

How can I sell my whole software product and IP?

I am a developer and I created a product which I think will be useful to people. I created it because it is useful to me as there wasn't anything like that already existing and I doubt I am the only one who would want the same functionality. However, I am not business-savvy enough to monetize it so I just want to sell the software itself and whoever gets it can make it profitable and change it however they see fit. I don't want to sell multiple copies of it, whoever buys it gets the whole IP. Right now, the product is just sitting and kind of going to waste so I want to sell it as soon as possible.

Note: I am just a developer, so I may be missing something big. Please tell me if so.

submitted by /u/PuzzleheadedCut2
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Startups – Rapid Growth and Innovation is in Our Very Nature!

Is there a website that is a Marketplace AND sell a SaaS app?

I'm trying to figure out how to market the same domain/website as a Marketplace and simultaneously sell a related SaaS app.

I'm afraid that:

  • the SaaS part of the site will confuse people who came for the marketplace (final users)
  • the Marketplace part would confuse the companies that will use the SaaS and manage their offers on the marketplace (products, quotes and inventory)

Do you guys know if any company is successfully doing something like that?

PS.: I'm not talking about a Marketplace of "add-ons" to my SaaS app

submitted by /u/AKopelevich
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Startups – Rapid Growth and Innovation is in Our Very Nature!

How to Sell an eCommerce Business

Selling an ecommerce business isn’t quite the same as selling a traditional brick and mortar company. In some ways, it’s much easier to sell an online store, and in other ways, there are additional challenges.

People decide to sell their ecommerce shop for various reasons.

Maybe you’ve reached a pivotal moment of growth where you’d need to invest and expand to continue running the shop on your own. Or perhaps you’ve wanted to sell from day one, and plan to flip more ecommerce websites with the profits from this sale.

Regardless of your reason, the process of selling an ecommerce business remains the same. Follow this guide to get the maximum possible value for your online store.

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Sell Your eCommerce Business for the Best Price in 10 Steps

Selling an online business can be overwhelming. But I’ve simplified this complex process into just ten simple steps.

This guide takes you through each stage of the selling process, from preparing for the sale through the transition once the sale is complete.

Step #1: Prepare Your Site for the Sale

Before we talk about any numbers, take a moment to put yourself in the shoes of a prospective buyer. The very first thing they’re going to do is visit your website.

You need to make sure that the site is appealing to new owners. If it has clutter, navigation issues, and a poor UX, buyers see this as extra work they need to do after the acquisition.

Think of your ecommerce website like a house. It’s much easier to sell a home that’s turnkey. The kitchen is updated. The appliances are new. All of the plumbing and electrical are functioning properly. Will a new owner come in and paint some walls? Sure. But that won’t prevent them from buying.

The same analogy can be applied to your ecommerce site. Your website is more valuable to buyers if it doesn’t need lots of work on the back end.

In terms of site architecture, your products should never be more than two clicks away from the homepage.

Update your theme. Clean up the design. Make sure the navigation is seamless.

But above all—keep it simple. If a new owner wants to update the logo, you don’t want it to clash with the theme.

Step #2: Update Your Inventory

It’s common for ecommerce websites to have products that go out of stock. This is something that I’m sure you’re familiar with.

While you want to make sure that you don’t neglect the business as you’re prepping for sale, you probably don’t need to pour tons of cash into new inventory. With that said, a website with products marked “out of stock” on nearly every page will be unappealing to your customers and prospective owners.

If you end up removing lots of products from the site, you should also condense your product categories, so it makes sense for the new owner. Having 20 or 30 categories can be overwhelming for someone to take on. But five or ten is much easier to manage.

Update and optimize the product images for items that are still active. Make sure the descriptions are clean and accurate as well.

You could potentially run a sale on some of your old inventory as you’re cleaning things up. Not only will this help you get organized, but it’s also good for your sales metrics (we’ll discuss this in greater detail shortly).

Step #3: Organize Your Financials

You might be great at selling products online, but most entrepreneurs aren’t expert accountants or bookkeepers. Depending on the size and scope of your ecommerce site, you might be handling all of the financials on your own.

Maybe you’re doing this manually with a spreadsheet, or maybe you’re using small business accounting software, like QuickBooks.

If you’ve been managing your books by yourself so far, it’s time to bring on a professional before you can proceed with selling the online store.

You don’t need to hire a new employee. Just retain a third-party accountant or bookkeeper to help you out. In fact, accounting is the most common outsourced business process, according to a recent study by Clutch.

Lots of eyes will be on your company’s financials during the sales process. Prospective buyers, lawyers, accountants, appraisers, lenders, advisors, and plenty of other people will be going through your financial statements.

At a minimum, expect to have the following financials prepared:

  • Last three years of tax returns
  • Income statement
  • Cash flow statement
  • Balance sheet

Some buyers might request additional information as well.

Just one mistake in your financials can be a red flag for buyers. They could feel like you’re trying to deceive them or that your lack of accuracy and attention to detail is a problem in other areas of the business.

Clean and accurate financial statements are much more appealing to a prospective buyer.

Step #4: Organize Customer Data

While this isn’t quite as important as your company’s financials, your existing customer list is going to be extremely valuable to buyers. If you’re turning this over to the new owner, it’s a huge selling point, especially in the commerce space.

The new owner will likely want to start running marketing campaigns and promotions right away. It’s much easier to sell to existing customers and contacts within your ecommerce CRM.

So take the time to make sure all of this information is accurate, updated, and in order.

Remove duplicates. Get rid of inactive contacts. Make sure the customers are segmented properly.

When you put the site up for sale, potential buyers want to know about your customers. Here’s a listing in the Shopify Exchange Marketplace.

As you can see, the sale of this online store includes a list of 34,000 subscribers.

This won’t necessarily make or break the sale. You could have 100,000 subscribers, but it’s useless if the store isn’t generating income. But this is definitely a “nice-to-have” feature that will add value to the sales price fo your ecommerce shop.

Step #5: Focus on Sales and Traffic

The sale of an ecommerce business doesn’t happen overnight. Things take time.

Don’t let the idea of selling your business distract you from the company itself. As of right now, you’re still the owner. You stand to benefit from the profits, and it’s important to keep running things as usual.

Continue finding ways to boost your sales revenue. Keep driving traffic to your website.

These metrics will make the business more valuable to potential buyers.

If traffic drops or sales start to decline after you list the business for sale, it’s a red flag to new owners. Here’s another example from the Shopify Exchange Marketplace, showcasing the total revenue by month for a listing:

This type of trend line would be concerning for a prospective buyer. What caused such a sharp drop in sales?

You may not always be able to sell your ecommerce business at its peak, but you definitely won’t get maximum value for it on the decline.

If your sales metrics look like the graph above, you’re probably not ready to sell the company just yet. Get back to several months of an upward trend before you officially offer the site on the open market. Once it’s listed, continue focusing on sales until a deal has been finalized with a buyer.

Step #6: Consult With a Valuation Expert

How much is your ecommerce website worth? Lots of owners think they know the answer to this question, but they really have no idea.

You can’t just pull a number out of thin air. Otherwise, you’ll run the risk of listing the website too high or too low.

Instead, a third-party appraiser can give your ecommerce website a fair valuation. While this number may not be the final sale price, it will at least give you a ballpark estimate.

Some of the most common factors that attribute to the valuation of an ecommerce business include:

  • Traffic
  • Financials
  • Age of business
  • Customer service
  • Logistics and fulfillment
  • Inventory
  • Supplier relationships
  • Technology
  • Intellectual property
  • Patents and trademarks

Why is it so important to consult with a valuation expert?

The appraiser should provide you with a detailed report of how they landed on a particular number. This report can add credibility to your listing on the open market.

Furthermore, a proper valuation could help you get tens of thousands of dollars more than you expected for your business. For example, let’s say you assume your ecommerce website is worth $ 100k. You get a few offers in the $ 90k range and consider accepting. Good deal, right?

An appraiser might tell you that the business is actually worth $ 150k. All of a sudden, those $ 90k offers don’t seem so great. You could hold out and wait for a buyer to offer a better price. But you wouldn’t know to do this without the help of a professional valuation expert.

Step #7: Find an eCommerce Broker

There are lots of online platforms that you can use to sell your ecommerce business.

Find the Best Brokers

There are hundreds of business brokers in the USA! Find out which one is the best match for your specific needs. Enter your zip code below to begin.

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If you’re using Shopify, it has an integrated exchange marketplace. But there are plenty of other reputable brokers to consider. Some of the top options include:

  • Flippa – best for businesses with Under $ 300,000
  • Digital Exits – best for businesses with over $ 300,000 to $ 10m in yearly profit
  • HL.com – best for businesses with over $ 10m in yearly profit

It’s easy to get started, and they even have a free valuation tool. I’d still recommend using a valuation expert (described in step #6), but it’s nice to see if those numbers are in the same range.

A brokerage marketplace will probably be the cheapest way to sell your ecommerce business.

Finding an actual broker who can help speed up the process will cost you more in terms of commission fees. But you’ll likely be able to sell faster and for a higher price. So you’ll just have to take all of this into consideration as you’re shopping around for a broker or brokerage marketplace.

Step #8: Qualify Prospective Buyers

Once the website is officially for sale, you can’t just sit back and wait for an offer. You need to go out and find buyers.

That’s why it’s helpful to have a broker who is working diligently to get your ecommerce site sold. If you decide to list the site on a marketplace instead, consider hiring a dedicated sales rep to find qualified buyers.

Compared to a brick and mortar business, it’s actually easier to sell an online store. That’s because the buyer could be anywhere. If you run a boutique clothing store in Los Angeles, it’s unlikely that someone living in New York City will buy that business. But when you’re selling an ecommerce website, the locations of the buyers and sellers are irrelevant.

So there’s a good chance that you’ll get multiple offers. Before you can truly take those offers into consideration, make sure the buyer has been pre-qualified.

Fielding multiple offers will help give you leverage to get the best possible price for the final sale.

Step #9: Complete the Sale

Once you’re ready to accept an offer, it’s time to get the lawyers involved. There’s actually not a whole lot for you to do in this step.

Just make sure you have a lawyer that specializes in contract law. Convey your wants and needs to your attorney, and they’ll take care of the rest.

The legal documents associated with the sale of a business are complicated. We’re talking upwards of 50 pages of legal jargon. Do not attempt to do this on your own.

Your lawyer will also make sure that you’re not exposed to certain liabilities after the sale has been completed. So it’s definitely in your best interest to do this properly. In most cases, all of the signatures can be handled online, which is ideal if the buyer is in a different location.

Step #10: Transition

Once the sale is complete, don’t just metaphorically “hand over the keys” and walk away.

Depending on your contract, you might be obliged to assist the new owner as part of the transition process. This type of contingency in the deal is much more appealing to buyers.

Aside from your legal obligations, it’s important to make sure the process goes smoothly for the new owner. Why should you care?

Your reputation is still on the line here. You might decide to create and sell multiple ecommerce businesses moving forward. People won’t want to buy your websites if they catch wind that you abandon them after the sale.

I’m not saying you need to stay on full time, but continue proving assistance to a reasonable degree.

Mistakes to Avoid When Selling an eCommerce Business

Besides the ten-step process that I’ve outlined above, a few other things need to be considered as you go through the sales process. These are the three most common mistakes that I see ecommerce owners make as they sell the business—and it kills their profits.

Selling Impulsively

Entrepreneurship is tough. There are plenty of sleepless nights and frustrating days.

But you need to keep a level head and avoid an emotional response to certain situations. Don’t allow one specific instance to force you into a sale.

If you woke up this morning and decided to sell your business because you’re feeling overworked or frustrated, I’d urge you to take a step back and evaluate the full scope of your situation.

Don’t expect to list your business for sale today and be done with it by the end of the week. According to Digital Exits, an ecommerce broker, here’s how long it takes to sell an ecommerce business:

If you decide to sell impulsively, you might regret it down the road. In doing so, it’s unlikely that you’ll get maximum value for the company. How much more could you have made from the deal if you waited another six months? The answer could haunt you.

Not Getting Paid in Full and Up Front

Don’t accept an offer if you’re not getting paid upfront.

Someone could offer you double the listing price, but $ 0 today. Don’t assume that you’ll be paid in full with an installment plan over the next decade. So many things could prevent you from getting your money.

Let the new owner get their financing elsewhere. So when the sale is complete, the money is transferred directly to your account, in full.

Not Planning Early

Ideally, you’ve always had an exit strategy from day one. Failure to plan early could put you in a precarious position where you’re forced to sell.

I’ve seen some ecommerce websites scale too quickly to the point where the owner can’t handle the surge. What if your customer service inquiries go from five per week to 50 per day?

You need a contingency plan for every possible scenario.

If your goal from day one has always been to sell the website, that’s great. But who will you sell it to? At what point will you sell it? How will you sell it? Answering these questions ahead of time will make your life much easier when it’s time to go through with the sale.


The ecommerce industry is booming.

Thousands of people out there are interested in getting involved in the space. Buying an existing ecommerce website instead of building one from scratch is appealing to entrepreneurs.

Selling your ecommerce business can be extremely lucrative if you act accordingly. Just follow the step-by-step process that I’ve outlined in this guide to ensure you get the best possible price for your ecommerce site.

Find the Best Brokers

There are hundreds of business brokers in the USA! Find out which one is the best match for your specific needs. Enter your zip code below to begin.

Step 1 of 6

  • (Your zip ensures quotes are as accurate as possible for your area.)

Quick Sprout

Your Home Work Mlm Business – Do You Sort Or Sell?

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How to Sell Your Business

You’ve decided to sell your business—now what?

Selling a business can feel overwhelming, especially if you’ve never been through this process before. Between the timing of the sale and the logistics, there are lots of factors to take into consideration before you proceed.

First, you need to understand that it’s perfectly OK to sell your business. Many small business owners struggle with this concept, especially if it’s a company they’ve built from scratch.

Entrepreneurs sell their businesses for a wide range of reasons. Whether you’re ready for retirement, feeling overworked, or just ready to move on to the next chapter of your life, selling your business can be extremely rewarding.

If you take the right approach, the profits can fund your next venture or give you the financial freedom you’ve always dreamed about.

As someone who has bought and sold multiple businesses throughout my career, I know what it takes to sell your business the right way. I’ve taken a complicated process and simplified it to just five easy steps.

Step #1: Determine Your Business Valuation

Most entrepreneurs think they have an idea about what their business is worth. But in many cases, the number in their minds is way off from its actual value.

So before you list the sale price too high or too low, it’s best to bring in a valuation expert. A third-party valuation will provide you with a realistic estimate of the company’s worth. For a fixed amount (usually a few thousand dollars), a qualified appraiser can determine the business’s worth with a detailed report and documentation.

The report can ultimately help bring credibility to your asking price if prospective buyers question the amount. At the very least, the valuation will give you a rough estimate of what you can expect.

If you don’t want to hire an appraiser, you could always try to figure out the value on your own. Generally speaking, there are three main ways to value a business—cost approach, market approach, or the intrinsic value approach.

The third method, also known as the discounted cash flow approach, is the easiest to do. Most companies are usually worth anywhere from three to six times the current cash flow.

With that said, there are lots of other factors to take into consideration here. Industry trends, business debt, assets, and similar companies for sale are just a few examples to consider.

Whether you estimate the value on your own or bring in a third-party appraiser, the valuation may not end up being the final sale price.

At the end of the day, the business is only worth what someone is willing to pay for it. If you’re unhappy with the valuation, it might not be time to sell your business quite yet.

Think of it like selling a home. Your real estate agent could tell you what the house is worth, but the property could sit on the market for months at that list price. You might have to put some money into the house to get the maximum value. The same analogy can be applied to selling your business.

Step #2: Get Your Financials in Order

Once you’ve determined the company’s value, it’s time to organize your financials. For some of you, this will be much easier than others.

Selling a business puts lots of eyes on your financial records. Prospective buyers, lawyers, accountants, third-party valuation firms, brokers, specialists, and other people will be combing through your statements. To ensure everything goes smoothly, your bookkeeping must be immaculate.

In most cases, you’ll need to provide at least the last three years of tax returns, as well as accurate financial statements (balance sheet, income statement, cash flow statement).

Any mistakes or disorganization in these records could be a red flag for potential buyers. Inconsistencies in your books could raise other questions, even if it was just an honest mistake.

Am I being misled? Are these numbers trying to cover something up? Can I believe everything else I’ve been told about the business? These are the types of thoughts that will go through the mind of a buyer if errors are found in your financials.

The vast majority of small businesses don’t have an accountant or a bookkeeper.

If you fall into that category, I strongly recommend hiring an accounting expert to clean up your books before you list the business for sale. This will make your life much easier down the road.

Step #3: Hire a Business Broker

There are basically two options to consider when selling a business—sell it on your own or use a broker.

You could potentially sell the company on your own if you’re selling to a family member or someone trustworthy in your life. This will help you save some money on brokerage fees.

But for the vast majority of circumstances, using a broker will be your best bet.

Will there be some extra fees associated with this method? Absolutely. But a broker can help you get the best possible price and sell your business faster than you could do on your own. Remember, brokers work on commission. So it’s in their best interest as well to sell the company for maximum value.

The broker will typically form their own valuation of the business. Compare this to estimate you got back in step #1. While the two numbers probably won’t be exact, they should be relatively close.

If there’s a drastic difference between the broker’s estimate and valuation given by the appraiser, you might want to get a third opinion to see which one is more accurate.

Your broker has lots of experience selling businesses, which is extremely valuable. Other common duties of a broker include:

  • Finding the best buyers
  • Marketing the sale
  • Provide confidentiality
  • Getting the deal financed
  • Assist with negotiations
  • Manage due diligence

Business Broker Options

Here are recommendations on best business brokers to sell your business:

  1. Bizbuysell.com – best for businesses with Under $ 300,000
  2. Businessexits.com – best for businesses with over $ 300,000 to $ 10m in yearly profit
  3. HL.com – best for businesses with over $ 10m in yearly profit

So how much will this cost you? Pricing for a business broker usually depends on how much money your business makes.

The general rule of thumb is this; the higher your revenue, the lower the broker’s commission fee.

A business with up to $ 1 million in revenue will typically pay a 10-12% brokerage fee, whereas businesses with $ 25+ million typically pay in the 2.5-4.5% commission range. For companies in the middle, it’s common for brokers to use the Double Lehman commission model, as opposed to a flat percentage.

It’s important to understand the broker’s commission model from the beginning. So ask questions if you’re unsure. Some brokers might even charge you a retainer, but you can probably avoid that by offering a minimum commission amount.

Step #4: Find Pre-Qualified Buyers

There are two key words to this step; pre-qualified and buyers (plural).

You’ll definitely want to field multiple offers for several reasons. For starters, not every offer will be legitimate. Selling your business requires you to disclose sensitive information about your organization. This could be worth a fortune to your competitors.

It’s possible that a competitor, or someone acting on behalf of a competitor, could make an offer just to review your financials. So don’t hand over that information to just anyone.

Most business transactions are backed by a third-party loan from the SBA. In some cases, banks require sellers to provide some of the financing as well. So don’t get too excited over the first offer that comes in and assume the company will be sold.

On average, it takes six to eight months to sell a business.

In addition to the broker, you could always bring in a sales expert to help speed up this process and pre-qualify buyers.

Buyers can typically be segmented into three main categories:

  • Individual buyers
  • Strategic buyers
  • Private equity groups

The type of buyer making an offer plays a role in how long it takes to process the transaction. For example, an individual buyer will likely need an SBA-backed loan, which can take up to 90 days for approval, whereas a private equity group could finance the purchase on its own.

Don’t rush to accept an offer right away, either. You can always use one offer to leverage another, which will give you the maximum value for your business.

Step #5: Finalize Legal Documents and Contracts

Once you’ve found a qualified buyer and accepted an offer, it’s time to finalize the deal.

This is where things can get a little bit messy and confusing. So you’ll definitely want to have your lawyer handle the vast majority of this stage.

Some of the standard legal documents and contracts associated with a business sale include:

  • Purchase agreement
  • Asset listings
  • Noncompete agreements
  • Guidelines for website use and domain name
  • Bill of sale
  • Security agreement

You could potentially draft a purchase agreement and contract on your own, but I would strongly advise against that. There’s a good chance that you’ll miss vital information, and you could be left vulnerable to unforeseen circumstances. These contracts can be upwards of 25-50+ pages long.

If your current lawyer is not an expert with contract law, they should be able to refer a colleague.

Once everything is in order, it’s just a matter of crossing the T’s, dotting the I’s, followed by lots of signatures and initials.

Tips and Best Practices For Selling Your Business

While the process of selling your business can be simplified to just the five steps listed above, there are certain things you need to do along the way.

Follow these tips and best practices to make sure the sale goes smoothly. This will also ensure you get the maximum value for your business.

Boost Your Sales

As I said before, selling your business takes time. You can’t expect to list it today and get an offer tomorrow.

I’ve seen so many business owners focus so much effort on selling their company, that they neglect the business itself while they’re still in charge. You must continue coming to work every day and put all of your efforts into increasing sales.

Strong sales will ultimately increase the valuation of your business and make it more appealing to buyers. On the flip side, a drop or plateau in sales could be a huge red flag for prospective owners.

That’s why it’s important for you to surround yourself with people who can help you through this process. Let your broker, lawyer, and accountant handle their respective responsibilities. This will give you more time to prioritize sales.

Develop an Exit Strategy

Every business owner needs to have an exit strategy. The best exit strategies are developed long before the decision to sell your business occurs.

So hopefully, this is something you’ve been planning for a while; a proper exit strategy takes time to develop. For those of you who don’t currently have an exit strategy, it’s not too late to create one. But with that said, this might not be the best time to sell your business.

The last thing you want is to be in a position where you feel forced to sell your company. In those circumstances, it’s unlikely that you’ll be able to sell for maximum value.

Things come up. So have a contingency plan in place for a wide range of possible exit strategies.

What will you do if a big box store opens nearby? How will you proceed if age or illness becomes a factor in your life? What if your children don’t want to take over the company? These are just a few examples of situations that could arise.

When the day comes that you decide to sell, you’ll already be prepared with an exit strategy.

Be Rational

Selling a business can be very emotional. This is especially true for family businesses, small businesses, or something that you’ve built on your own from scratch.

Most business owners have a great sense of pride for what they’ve accomplished. Blood, sweat, tears, and sleepless nights are all things that entrepreneurs have in common.

With that said, it’s crucial that you keep your emotions out of the deal. Getting emotional can cloud your thoughts and decisions.

Prospective buyers don’t care how many hours you’ve worked per week for the last decade. All they care about is the bottom line. If you think an offer is too low or unfair, you can always decline.

In some cases, a competitor might make a legitimate and fair offer, with the full intention of buying. Don’t let an old rivalry prevent the deal from going through.

Get Paid Up Front

Make sure the terms of your deal require an upfront payment. Some buyers might make you an enticing offer, but don’t have the funding to pay you now.

Getting paid over time might not sound like a big deal, but this arrangement could pose some challenges for you down the road. You could end up in a situation where you’re not getting paid to the terms that you agreed. If that happens, any legal recourse would just be an added expense to your side.

Furthermore, the new owner could run out of money to keep the business alive. If that happens, there may not be any money left for you if the company goes under.

Let’s say you have two serious offers on the table. One is for a higher amount but involves a ten year financing period. The second offer is less but pays you upfront. I’d strongly recommend the latter.


Ready to sell your business? Don’t overcomplicate things; the entire process can be broken down into just five simple steps.

With that said, selling a business takes time. Have realistic expectations in terms of the price and timeframe.

In some cases, you might ultimately decide to postpone the sale until you can increase revenues and get your financials organized. If your company is doing well and generating high profits, it’s much more appealing to potential buyers.

Use this guide as a reference to walk you through the process. Make sure to follow the tips and best practices that I’ve outlined above to get the maximum purchase value for your company.

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