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3 People Who Made Especially Smart Choices When Selling Their Website
By Quiet Light
A lot of the choices you make to sell your website will seem simple and straightforward. You’ll probably need a little guidance during the process to hammer out the particulars, but generally speaking, the same determination and know-how that helped you build a successful business can also help you negotiate your way to a successful sale—particularly if you’re ably assisted by a qualified broker.
But sometimes, getting the best possible outcome when you sell your business requires some extra thought and effort. In my own experience working with Quiet Light Brokerage, I’ve helped a number of sellers. Three in particular, however, made especially smart choices during the sale of their business.
Toughing It Out
The Client: Jennifer first contacted me in the middle of the summer in 2013 to discuss the sale of her business. We reviewed her profit and loss statements, and after looking at the proverbial good, bad, and ugly, we decided the best thing to do would be for her to wait and sell her business on an uptick.
The Challenge: Waiting wasn’t initially in the cards for Jennifer; she was motivated to sell, and more than ready to sell emotionally. But after some real soul searching, she also realized she had the strength and will to clean up her books and get revenue flowing in a positive direction. Her primary focus in accomplishing this goal was the revamp of her website, (which she rebuilt into a truly impressive and appealing online presence).
The Takeaway: Over the following six months, Jennifer not only redesigned her site, but got her profit/loss ratio where she wanted it, cleaned up her books, and had clear growth in her year-over-year gross and net profit. Because she put in the time and effort necessary to take her business to a more profitable and attractive level, we were able to list her business for sale at a very aggressive price with a 3.5 multiple and receive a full-price, all-cash offer within two weeks of listing the business for sale.
Six months of hard work translated into a sale price $200,000 higher, along with a contracting job with the buyer.
Jennifer’s smartest move was recognizing that while she was emotionally ready to sell, she was also willing to invest the time and effort necessary to make an even better sale after a relatively short period of difficult work.
Get While The Getting’s Good
The Client: Bob had been running his business for many years, and his revenue was trending down month over month when he came to me for assistance. Much like Jennifer, Bob had a decision to make: would he sell for whatever he could get? Or did he have the will and emotional fortitude necessary to stop the bleeding, turn his business around, and get growing once more?
The Challenge: Bob reflected on his situation, and realized he didn’t have it in him to turn things around, and he wasn’t willing to let his business wither to dust. He had a family to provide for, after all.
But rather than simply take whatever he could get, he was honest with himself and took the time to establish the terms under which he was willing to sell. He came to me as a very motivated seller who was pleasant, flexible, and professional, and when he asked me to find him something worth his while, I was happy to help.
The Takeaway: By being honest with himself and flexible with his approach, Bob made the smart move selling his business. I was able to find him a buyer who gave him cash, plus an earn-out and and a job working remotely from his current position—all of which allowed him to earn more than he had as the owner of the business.
It’s worth noting that I had another seller, very similar to Bob, who came to me in early 2013 looking to sell his business. Unlike Bob, the other seller failed to recognize his emotional and physical inability to rescue his business from decline, and six months down the road, his business was worth just over half of his original asking price.
Recognizing and owning your limitations can make all the difference when it comes time to negotiate a successful sale.
Take a Calculated Risk To Sell Your Website
The Client: Randy listed his business with Quiet Light Brokerage and had a full-price, all-cash offer within seven days.
The Challenge: The sale was more or less a done deal—the Letter of Intent was not yet drafted, but both parties were keen to proceed—when Randy received another offer. This one was for 80% of the business, with Randy retaining 20% ownership.
Because this offer worked out to a valuation that was significantly lower than the cash offer—$750,000 vs. $1,000,000—and was quite a gamble, I strongly encouraged Randy to turn down this new offer in favor of the full-price cash offer. Randy insisted on entertaining both, however, and we moved ahead to meet with them to discuss things further.
The Takeaway: Randy ultimately decided to entertain the second offer, and as it turned out, he was both smart and correct in doing so. Upon further review, we learned that the all-cash, full-price buyer was really a strategic buyer (what’s the difference? check here) who wanted to be in Randy’s vertical. Buying his business would allow them to leapfrog ahead three to five years, and in response to Randy’s decision to consider the second offer, they upped their bid by a whopping 43%!
Randy made the smart move because he refused to panic or rush the deal. He examined all opportunities, and in doing so, he landed a better offer.
One caveat I would like to mention is that this strategy is absolutely a gamble, and one a relatively young buyer would be far more comfortable making (as compared to an older owner looking to retire with the income from the sale of their business). Randy was smart and lucky with his strategy, but it’s absolutely critical to remember that not every gamble will pay off so handsomely.
Making the most of the sale of your business might seem like a daunting proposition. But if you take the time to be honest with yourself, your broker, and your potential buyers about your needs, timeframe, and expectations, you can help ensure that the rest of the decisions you make during the sales process are smart ones.