

Buyers are interested in recent performance (usually the last 12 months) and future sustainability and viability, especially if you operate in a dynamic space (such as with websites). The previous success of a business is largely irrelevant at the time of sale, especially if it has been struggling lately. I advise clients to use TeamViewer or Skype as a practical way to verify financial claims on smaller business sales where using an accountant is not always practical or cost-effective. If you are generating revenue through affiliate offers or third-party ad networks with an online business, be prepared to show deposit records and even access to your accounts online so both parties can see the accounts live.

For example, if you are selling advertising space directly, be prepared to show invoices as well as bank statements that show matching deposits. If you are going to claim revenue from a specific source, you need to have verifiable proof. Buyers expect verifiable financial claims. Experienced business buyers want to see profit numbers, not revenue. The monthly revenue for the first site is three times more than the second business, but the actual profit is almost half. If a business is simply a concept without a proven revenue stream then there isn’t any value in the eyes of the vast majority of potential buyers. I regularly speak to business owners who believe they have a potential gold mine and expect to command a high selling price based on perceived potential alone. Experienced buyers will see straight through you and the business you are selling and will quickly pass over your offering if they see any red flags.
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While I specialize in the sale of online businesses and refer to those as examples, these points still apply to business sales whether offline or online. Getting it wrong before you start can ruin any hopes of a sale and can mean many months of your time wasted. However, the rewards can be great, and ultimately, life-changing, so if you do decide to sell there are six key things you need to be aware of that will help you prepare and maximize your chances of success. Selling a business is never an easy or simple process.
