What Online Business Brokers Do (and Why You Should Work with One)

If you’re considering the possibility of selling your business, you may have wondered what online business brokers do and whether or not you should work with one. After all, selling your business is a significant life decision that deserves careful consideration and research.

In this article, we discuss everything you need to know about working with an online business broker, including:

• What online business brokers do
• What the process of working with a business broker looks like
• Why you may want to consider working with an online business broker
• How to find the right broker

What Is an Online Business Broker?

An online business broker helps entrepreneurs sell their businesses by facilitating all aspects of the exit process. This includes:

• Performing valuations
• Creating marketing assets
• Screening potential buyers
• Evaluating offers
• Negotiating
• Answering questions that arise 

Additionally, because reputable brokerage firms have their own lists of potential buyers, they can also save you the hassle of figuring out where to sell your business. At Quiet Light, all of our brokers have either sold or acquired an online business. Therefore, not only does our team understand how online businesses operate, but we also know what it actually feels like to be in your shoes. 

“An online business broker helps entrepreneurs sell their businesses by facilitating all aspects of the exit process.”

The Business Valuation Process

When you work with an online business broker, one of the first services they’ll provide is a free valuation. 

During the valuation process, a good broker will examine all aspects of your business to determine its value. Typically, your business’s value will be calculated by applying a multiple to your seller’s discretionary earnings (SDE). To establish the multiple, your broker will explore four key elements of your internet business. These include risk, growth, documentation, and transferability. 

As part of the valuation, a good business broker will also explain the various strengths and weaknesses of your business. This will enable you to understand how it’s likely to be perceived among potential buyers. If you decide to hold off on selling, your broker’s recommendations can be invaluable when it comes to increasing value and planning for a successful exit down the road. 

Creating Your Marketing Package

If you decide to move forward, your broker will put together a listing that highlights your business’s key features as well as its performance. This is what potential buyers will look at to decide whether or not they want to explore the possibility of making an offer. 

In addition, your broker will create a detailed marketing package. In it, they’ll include all of the relevant information a prospective buyer will want to know. Because your marketing package will contain sensitive information, your broker will make sure all potential buyers sign a nondisclosure agreement before viewing it.

“As part of the valuation, your broker will also explain the various strengths and weaknesses of your business. This will enable you to understand how it’s likely to be perceived among potential buyers.”

Screening Potential Buyers

When you sell your business, it’s important to sell to the right person. Therefore, your broker will help vet potential buyers to weed out the tire-kickers and maximize the likelihood of finding a respectable buyer. Because brokers are experienced when it comes to working with different parties, they typically have a keen sense of who you should work with and who to avoid.

Evaluating Offers and Negotiating with Buyers

Once you start receiving offers, your broker will help you evaluate your options so you can make an informed decision. 

Experienced brokers know what a good offer looks like, which means you won’t be left guessing about how strong or weak an offer is. If an offer looks good, your broker will let you know. If your broker feels that an offer is weak, they’ll tell you that you can likely do better. 

In addition to helping you evaluate offers, your internet business broker can also help you negotiate with a potential buyer. 

Facilitating Closing

During the sales process, your brokerage firm can serve as an invaluable resource for answering questions that arise. This can go a long way toward instilling confidence in both parties and helping the deal go smoothly.

How an Online Business Brokerage Works

As mentioned above, if you work with a business broker, the first step is the valuation. Typically, a broker should be able to provide you with a rough estimate of your business’s worth within the first conversation based on the information you provide. At Quiet Light, we provide valuations free of charge.

“In the vast majority of cases, sellers who work with brokers are able to sell for a higher purchase price and with more favorable deal terms.”

If you decide to move forward, the next step is to sign an engagement letter that outlines the terms of the working relationship between you and your website broker. The engagement letter specifies the exclusivity period, commission structure, and other key details of the working relationship. 

Most reputable business brokers work on a commission basis. This means you’re not paying for their consulting services upfront. Instead, you pay a success fee when you actually sell your small business. In fact, you never actually see any money leaving your pocket because the success fee is paid directly out of the purchase price based on a percentage of the total deal value. 

Although no seller likes paying a commission, the value a broker provides should more than make up for the fee they earn. In the vast majority of cases, sellers who work with brokers are able to sell for a higher purchase price and with more favorable deal terms. After a successful exit, many sellers choose to buy or start another business using the funds from their exit. 

Why Work with an Online Business Broker

There are several compelling reasons a business owner may choose to work with a business broker when selling their businesses. Some of the most important benefits a broker offers include:

• More offers
• Higher purchase price
• Better deal terms
• Confidence and peace of mind

Receiving More Offers

Because established business brokers have large networks of qualified buyers, they’re typically able to bring more offers to the table. In addition to more offers, you’ll also typically end up working with a higher-quality buyer when you work with a broker. 

Higher Purchase Price

By receiving more offers, you’re generally able to receive higher offers since each qualified buyer must bid against the others to win the deal. Additionally, brokers are skilled negotiators who can negotiate on your behalf to land a better deal.

Better Deal Terms

Unfortunately, a lot of sellers don’t have the experience or expertise to negotiate favorable deal terms. Every seller loves to talk about the purchase price, but the deal terms are often just as important, if not more important.

A knowledgeable broker (i.e., an ecommerce broker if you have an ecommerce business) can help you structure your deal to ensure your interests are protected. This can go a long way when it comes to avoiding drama if the deal doesn’t go as planned.

Confidence and Peace of Mind

Lastly, when you work with a broker you trust, it relieves you of significant pressure during the business sale. This is true whether your business sells physical products or online survey software. Instead of feeling like you’re ultimately responsible for the deal, you can rely on someone who is intimately familiar with the process and has your interests at heart. 

How to Find an Online Business Broker

As a successful entrepreneur, you know one of the best ways to find qualified professionals is to see what others are saying. If you speak with a broker’s former clients or read their testimonials, you’ll be well on your way to working with the right person. And of course, nothing beats getting on the phone with someone and getting a feel for them through a good conversation about the business you’ve built.