How Website Brokers Protect Sellers
Updated on March 16, 2020
Have you reached a point where you’re ready to exit your business?
If you’re at a stage in your digital journey where you have started to shop around for where you would like to list your business for sale, then you have most likely noticed that there are plenty of options to choose from.
With so many new avenues and marketplaces entering the online broker space, it is easy to make the assumption that by selling your business privately you will make a larger capital gain compared to listing with a broker who charges a commission to market the asset for you.
However, what you don’t see in the public-facing eye are countless stories of individuals who choose to go this route to save a few bucks but ultimately lose more than what they had expected to gain from the private sale.
From false hopes and promises that lead to countless wasted hours, to cloning specialists doing the bare minimum to get your URL, and the low balling swindlers who take the “craigslist offer” approach to downplay your business for their own personal gain. The risks associated with a private sale often outweigh the benefits you get from utilizing the expertise of a website broker.
After all, this is the website broker’s playing field, and if the broker has been in the game long enough, they will know how to spot these benchwarmers from a mile away.
Let’s dig deeper into the benefits of using an online broker to sell your business and uncover some of the risks associated with choosing a private sale. In this article we will discuss how online brokers:
- Protect the details of your business
- Provide a huge buyer reach
- Enforce non-compete clauses with real legal protection
- Negotiate deals on your behalf
- Provide access to lawyers to create business-specific contracts that are experienced specifically in the transfer of online businesses
- Enforce a migration period and financial earnouts
- Offer reversal protection if the buyer breaks the contract
Plus, we are actually transparent when it comes to the buy & sell game of online businesses. We’re about the only brokerage around in our space where you can see a live update of how many deals our marketplace is selling.
If you want an overview of how business brokers work, you can check out our Youtube video below:
Why Protecting the Details of Your Business is Important
We won’t go into specifics about which online brokers and Facebook groups do and don’t give out your business’ URL to the public, but spend a little time searching around and it won’t take long before you find out.
For us, this is a huge red flag for any seller looking to protect their investment and the hard work they’ve put into building and growing their business. Withholding this information also protects the buyer and gives them the opportunity to gain from the asset before any copycats saturate the market once they’ve acquired the business details.
Even a low-barrier membership “fee” for buyers does not offer you the legal protection needed to stop a savvy WordPress shark from copying your business and stealing your audience. All it takes is just one bad actor to buy into a cheap membership fee and download all of the deals on that marketplace, sell off the information on the various internet marketing forums, or just straight up copy all of your information and simultaneously doing negative SEO to your actual site.
Without properly protecting the details of your business when marketing the asset for sale, you’re risking the future of your investment by not only giving someone the chance to copy your website but also creating a lower barrier for entry into your market as a whole since it’ll become easier for someone to copy your business, thus driving the value of the business down.
Savvy buyers are even less likely to buy your business if they know just how easy it is to get access to the details of it. The last thing they want to do is throw down $100k-$300k on a business that the entire internet knows about and already working on copying.
A Large Buyer Pool Offers a Faster Sale
Whether you’re looking to invest this capital into another business opportunity or to gain the financial benefits of selling now to purchase a home, having a larger buyer pool offers a greater opportunity for making a swift sale.
Having a large buyer reach is important when it comes to providing a competitive market where buyers are competing for your business and not the other way around. We have over 129.3K buyers and sellers currently on our marketplace (as you can see on our current scoreboard), and with an average time of 42 days that a business is listed for sale on our marketplace (as shown here on our 2019 trends report), we offer the highest number of potential buyers looking to purchase your specific business today.
That isn’t even counting the thousands of new users being introduced to our brand every week via our various marketing channels.
Not only do online business brokers offer a much larger number of buyers ready and eager to purchase your business, but they also have certain clauses and requirements in place before giving out anything too specific about your business.
We Offer Non-compete Clauses to Protect You, The Seller
Google “reverse engineering a website” and a plethora of online courses and tutorials will show up on how anyone with a few hundred bucks in their pocket can copy your exact business in a short period of time.
Couple this ability with having no legal contracts in place for those who are given your URL and specific business details, and you have yourself a recipe for disaster.
Charging a small membership “fee” before giving out the specifics of your business to potential buyers is not enough to protect you. You need contracts and a legal team whose primary focus is protecting you, the seller, and the business you have created.
This is why we make any buyer on our marketplace sign a non-compete clause before giving out anything too specific about the business. It not only keeps them honest in the sense that they won’t take this information and duplicate the business on their own, but it also gives you, the seller, peace of mind knowing that you have proper documentation if legal action is required.
We Negotiate Deals With Buyers, So You Don’t Have to
Offering an online business marketplace for both sellers and buyers is something we have done very well for many years now. Having industry knowledge and experience while being transparent with the numbers is something no other broker offers.
Since day one, we have known how important transparency with this information is for ensuring that you know you are using a broker with tried and true performance that is based on the facts, not a “take our word for it” mentality.
Based on this experience and the data we have gained over the years, we can confidently say what we value your business at in reference to what similar businesses on our marketplace have sold for. We don’t “upsell” you on high hopes and dreams that your business is worth an unrealistic multiple or that we can sell your business in just a few hours (although we have done that).
We give you realistic expectations and will negotiate with buyers on your behalf knowing the market demands for your business, based on real-life data we have collected from real-life businesses that we have sold.
In-house Lawyers Know Exactly How to Custom Tailor Your Agreement
In the business of buying and selling online assets, we know that when it comes to drawing up contracts, there truly is no “one size fits all” agreement.
Each business model and layout is specific to your business, which is why it is important to have the proper legal documentation when listing your asset for sale. Not only does this protect you as the seller from a potential issue arising which often happens with general contracts, but this also protects the buyer.
While saving money up front is usually on the forefront of those considering a private sale, it is nothing compared to the money that would be spent on legal fees to file against someone who copied their business without business specific documentation to prove it.
There is no membership club in the online broker space that will protect your best interests in the event that you need to take legal action over someone duplicating your business. This is why we have a team of lawyers that know exactly what needs to be documented in writing and offers an important safety net based on having years of experience with these types of contracts. All of our contract templates are created by a legal team with actual experience, and in larger deals these contracts can be customized to the letter of law that can protect you (and the buyer for that matter) during and after the transaction.
Why the Migration Period is Important to the Whole Process
Not only is the migration period of any business that has been sold a vital part of the entire process, but it is also the most stressful one. You, as the seller, will feel vulnerable during this stage, as you are now no longer receiving revenue from your business until the transfer is complete.
While the buyer is taking new ownership of the asset you’ve worked long and hard to build, they will begin to assume the role of ownership over the business accounts and assets.
We are the only online brokers who offer to migrate the business, which is a huge undertaking in itself and the reason why we have a dedicated migration team to handle the entire process for you.
With a private sale, you have no legal safety-net should the buyer decide to not pay you in full, back out of the deal at the last minute, or give you any other number of excuses as to why they have decided not to complete the deal unless you engaged the costly services of real lawyers. And of course, make sure you vet those lawyers that they actually have experience in this space rather than just being a friend that practices personal injury law or something else completely unrelated.
We not only protect you from a legal standpoint, as previously discussed, but also hold the asset (to the best of our ability, some businesses like FBA we can’t do this) until the agreed upon funds have been transferred to you.
So what is something else that an online broker does that a private sale doesn’t offer?
Reversal Protection if a Buyer Breaks the Contract
In a private sale; once the accounts, links, and any associated files have been transferred to the new owner, there is little you can do to turn back at that point.
You can have peace of mind knowing that an online broker has secured the funds during the all important migration period.
This is important for buyers, as it holds you, the seller of the business, responsible for ensuring that the information you have provided about your business is true, and also protects you, so you know that you haven’t thrown all your hard work and effort down the drain.
For all of these reasons and more, it’s clear to see why utilizing a broker’s expertise for selling your business not only offers you protection but also the peace of mind knowing a team will be helping you through every step of the process.
If you would like to experience the peace of mind that comes with making sure that you get the help you need, sell your site on our marketplace today. Not only do you get the peace of mind, but a pretty nice payday too.
Maybe you are not quite sure if now is the best time? Perhaps you have a 7-figure business with a lot more complicated moving parts.
No problem.
Schedule an exit planning call with one of our business analysts and see why over 129,300 buyers and sellers trust us to be there for them when they need it most.
