For Ecommerce or Online Businesses, Details of Web Traffic, Size of Customer / Subscriber Database, Google (or similar) Analytics. Social Media details.
The thing with online businesses is that all data provided to prospective buyers needs to demonstrate the presence of that business. A high-street shop has the bricks and mortar premises and footfall can be measured, whereas even the best designed website needs to demonstrate this by the accumulation of relevant data.
The best tool for this of course is Google Analytics although most sites have a back-office system with traffic and sales data available in all types of format, tables, graphs. pie-charts etc.
Ecommerce sites have a valuable resource in their customer databases. These can be used for e-shots with special offers, new products, new seasonal collections or just general chatter designed to build up a customer relationship. Sites which make money via subscription or similar revenue models will also have a database which can be used for marketing in the same way.
Social media is also a vital tool for online businesses and can be used in several ways for marketing and to increase the presence of the business.
So, when presenting an online business for sale, whilst it may need all of the usual business information such as accounts, assets and so on, the business model also has its own specific evidential requirements as outlined above.
If you are considering selling an online or ecommerce company please CLICK to get in touch for our Ecommerce Fact Find and Questionnaire which enables you to provide all of the necessary information via a simple-to-follow Q & A form.
December 11th 2014
A downloadable PDf of the 2013-2014 UK Tax Rates, kindly supplied by our friends at Hart Shaw www.hartshaw.co.uk
Budget Report 20th March 2013 provided by TLA Business Services
Forgive the awful pun in the title but yet again I have spoken to a prospective buyer who reports great difficulty in buying a business.
He came to see me regarding a client of mine and mentioned that he has seen 3 similar businesses on the www.businessesforsale.com website. He has dutifully filled in the online request for more information and has only had one reply. This seems commonplace and I wonder why.
Ads on this website are not free so presumably there is some intent on the part of the advertiser to actually sell the business. It's not clear in this case whether the ads are placed by brokers or directly by the vendor but it is surely reprehensible for a broker not to reply. Even if the business is sold or under offer then an appropriate courteous reply would surely be seen as the correct, professional response - wouldn't it? You would also capture details of a potentially useful buyer.
In all cases I would reply to an enquiry. Even if the business is no longer available, under offer or maybe it doesn't seem to match the enquiry.
Another bugbear for buyers is getting up-to-date and relevant details on a business. A reply may be sent but details can be out of date, or vague, or simply wrong. I've even heard of some brokers who hold no accounts or other data on their client business and virtually expect the client to do the legwork such as sending out accounts, asset lists, management figures and all of the other information necessary.
Anyway, enough moaning. I'll continue to do the job the way I think it should be done - thoroughly, professionally and with the client's interests fully at heart.
About 2 years ago I valued a small business at about £60,000. The client was a little disappointed and said could we ask £80,000 so I agreed. After all there is no "right" price for a business and the vendor did have fantastic premises on a really low rent through the local council so I thought we might get some extra valaue there.
I took instructions to sell the business and we had a few viewings but no real interest or offers were forthcoming.
So, about 6 months or so later my client was tele-canvassed by a major business broker. Something along the lines of ... "do you want to sell your business? We're the biggest, we're the best, come talk to us" My client was seduced by their big talk and met one of their valuers who valued the business at ... wait for it .....£99,950. So he says "we'll sell this, no problem, blah, blah, blah". She was convinced and signed up there and then, handing over a cheque for their big fat upfront fee as well.
She called me to tell me what she'd done. "Oh dear, oh dear, oh dear" says I. "These guys are pretty useless, can you cancel the agreement?" It turned out she couldn't and decided to give them a go, especially as she had signed up for a 12 month agreement. She did ask them to drop the price a bit though.
I told her I would continue to market the business (at the new price) and, guess what, I got an offer of £80k. Well, to cut a long story short the offer didn't go ahead. The buyer was good for the money and wanted to proceed but my client felt he was going to make too many changes and wouldn't give her assurances that staff jobs were safe. But I got an offer. And there was also another buyer who wnated the business but couldn't raise the funds.
Meanwhile the other broker seemed to be doing nothing apart from posting a gushing advert on their website. You know the sort of thing..... best business in town, fantastic opportunity etc. etc. blah etc.
So, 12 months later here we are. The other broker didn't get a single viewing, offer or interest and my client has terminated her agreement with them. I'm sure they are not too sorry as they are also charging her an exit fee on top of the initial fee she has already paid. (We don't charge exit fees).
Although she never really left me as a client she is coming back on with Anderson Moore as sole agent. Watch this space.
Partner - Anderson Moore
Here's an interesting statistic. We advertise our client businesses on a website called www.rightbiz.co.uk. This is a big site with lots of businesses advertised for sale.
Although we only have 0.07% of the total number of businesses advertised on there we get 0.22% of all email enquiries. In other words we get 3 times as many enquiries as a proportion of our presence on the site would indicate.
Is it because we write better ads? Who knows but if you are thinking of selling your business then consider using a broker with a 300% better enquiry rate.
Keith Green - Partner, Anderson Moore
In the last week or two I have:
Put together 2 Heads of Terms
Read through a Sale and Purchase Agreement on behalf of my client and his solicitor
Drafted a letter on behalf of a client to advise his customers of the takeover of his company
Met with a client and his accountant to discuss some of the taxation aspects of his business sale
All enjoyable and necessary stuff and in my view, part of the job.
Having read a few business forums in my time I think the perception of brokers is very varied. We offer a really quite comprehensive service encompassing consultancy, expert opinion, administration, sales and occasionally some counselling.
In some ways it would be nice if this job simply involved getting on with selling but the list above shows what variety there is in this job and, well, variety is the spice of life.
Keith Green - Partner, Anderson Moore
Keith Green - selling businesses and advising SME business owners since 1997 and still enjoying it.