Checklist for Qualifying Internet Business Buyers

So, you’re considering selling your online business. You understand the value of exit strategy planning. You’re excited to learn that fantastic web businesses can be sold quickly. . You’ve carefully examined your financial statements and calculated a reasonable market value for your enterprise. You know the difference between potential and opportunity offered by your business provided by your organization, and you’ve resisted the temptation to match your expectations of its worth. You’ve done everything you can to get ready for the sale and also to maximize the selling price of your site. You know what kind of competition is out there, and you know the competition is out there and you know the top 12 factors that buyers look for while comparing involving many accessible internet businesses for sale

Yes, you have set your home in order, you’ve done all of your homework, and you’re ready to open your doors to business buyers. But one crucial question remains: Are the buyers prepared for you?

You know there are lots of diverse kinds of buyers in the market, from first-time entrepreneurs to sophisticated multinational corporations, and you know you don’t need to share sensitive and detailed information regarding your company with just anyone who asks for it — especially not with present or potential competitors. However, you also know the more buyers that are interested in your organization, and the more you share, the better your odds of a successful sale at a higher price.

So, what can you do? It is a real conundrum, and lots of my clients struggle with balancing the conflicting goals of maximizing exposure and keeping business confidentiality. To deal with this issue, I recommend my clients use a two-tiered, gated approach for bringing and vetting potential buyers.

Use a Two-Tiered Gated Approach for Identifying Serious Buyers

Consider Gate 1 as a public area that’s open to many buyers, packed with tantalizing information that celebrates your company’s strengths without showing too many classified or restricted facts about your operations. At exactly the exact same time, this is the chance to collect some initial data from your prospects that will allow you to better judge their credentials and their intent.

Prospects from Gate 1 that pass your criteria (see the checklist below) can then be introduced into Gate 2. The purpose of this point is to provide the buyer a complete comprehension of you and to offer you a complete comprehension of them. Gate 2 prospects will receive the most complete documentation about your organization, however you’ll also have the capacity to find out more about each purchaser. This typically involves direct contact with the potential, such as telephone calls or record exchanges, allowing each party to become comfortable at the prospect of a completed transaction.

The best feature of the tiered approach is that it entertains almost everyone interested in purchasing your company while still protecting your interests. Gate 1 ensures you won’t overlook or unintentionally turn off any interested buyers (maximizing exposure), but Gate 2 permits you to keep on working with just a subset of trusted and motivated prospects (keeping business confidentiality).

Gate 1 Checklist: Questions to Ask the Purchaser During the First Qualification Process

(1) Please explain what would constitute an ideal company for you.
(2) How long are you on the lookout for a business?
(3) what’s your timeframe for purchase (e.g. how many months)?
(4) What price variety of companies would make an ideal purchase for you?
(5) How much of a down payment are you familiar with?
(6) Is a down payment available now?
(7) Please explain the source(s) of your down payment.
(8) What’s your annual net take-home anticipation from a new organization?
(9) What is your current net worth?
(10) What do you do now? Do you work? Do you have a business? Both?
(11) Please describe your company experience (e.g. corporate manager, private entrepreneur, etc.).
(12) Please describe your education and background.
(13) Are you open to non-internet companies too? If so, in what geographic area (s)?
(14) Are you involved in any on-line actions, either for work or to your own organization? If so, please explain what you do and offer some relevant links or URLs.

Understanding Gate 2

The checklist for Gate 2 is extremely subjective and is based on the vendor’s goals. Every company is unique, and Gate 2 is the place to cover the special circumstances which make you different. Your agent can help you produce a complete list, but bear in mind that nobody knows your business better than you. Gate 2 questions must ultimately cover the subjects you believe matter most.

By way of instance, I recently closed a transaction with a vendor who owned his own warehouse. His inclination was to sell the company to a local buyer who would be happy to rent the warehouse . Other customers who have close ties to their workers often stipulate that the purchaser retain some or all of the present staff. Some customers, meanwhile, require the purchaser to continue certain advertising styles, business practices, or to agree not alter the focus of their business for a predetermined length of time to be able to ensure a smooth transition.

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My recommendation: Make your Gate 2 questions count, but keep as few criteria as possible. And if you meet a prospect that moves Gate 1 with flying colours but fails lots of the criteria you have set for Gate 2, I suggest that you still keep them on a”hot prospect” list. If you don’t have many strong prospects, you do not need to dismiss some Gate 1 graduates from control.

Gate 2 Checklist: Questions to Ask Yourself Before You request the Purchaser

(1) Are there any pieces of land, stock, or equipment which will need to be included in the sale which may not be evident from first discussions (e.g. warehousing units, delivery vehicles, etc.)?
(2) Are there any connections your company maintains that have to keep after the purchase (e.g. keep employees, keep particular vendors, keep special discounts or agreements with favored clients, etc.)?
(3) Do you need the purchaser to have any particular skills which will help ensure the continuing success of this company (e.g. a working understanding of SEO, expertise in your business, etc.)?
(4) Do you want to keep on working in the market after the sale? If so, is the possible buyer OK letting you do this?

Using these checklists to think of the perfect questions to ask is great, but getting potential buyers to answer them is another story and is not always straightforward. In my next post, I will cover a few of the challenges vendors face in getting answers to their questions, and we’re going to review some powerful strategies for overcoming them. I will also discuss some tips on what sorts of advice to give to your prospects, and if.