Posts tagged "business broker"

A big concern that usually crops up for our clients is how to handle their employees in lieu of their decision to sell a website business. The fears surrounding communicating to the employees that the plan to sell the internet business are moving forward are not unfounded. The uncertainty of how employees will react initially and how they will perform during the process can be worrisome to some employers. The last thing they want and need is employees that cause problems for the company, in the midst of negotiations, because they are unhappy with the prospect of losing their job security.

 We usually suggest the following advice to our clients depending on the circumstances.  Until there is an offer that is tabled and accepted, there is no reason for the news to be broken to the employees. The main advantage of retaining an Internet business broker is that the prospective buyers contact the broker and not the seller, so there are not going to be phone calls from suitors that get mis-directed to the employees. That is the worst case scenario which can create fear and animosity and ensuing poor on the job performance. Depending on the relationships and the type of employee(s) they have - this will define how open an employer can be from the getgo. But for the most part, it is wiser to create a business as usual enviroment until a deal looks like it will be signed or is signed and will close on a specific date. That usually gives the seller at least a couple weeks, but normally closer to a month, to break the news of the termination of the job.

The other important factor is job severence. We usually advise or clients, at their personal discretion, to offer a severence package that rewards their employees according to the length of employement, loyalty and overall importance to the success of the business. Depending on the size of the sale, I believe a 6 week to 3 month salary bonus is appropriate compensation for valuable employees. In addition, offering good references and suggestions or leads to other opportunities will be appreciated.

While most employees will generally be happy overtly for their employers - providing they have been treated well during their tenure - there will be some anxiety that undoubtly arises from the unknown of their next step. Most of this can be alleviated by the compensation package and strong references. In some cases, this may be the impetus for an employee to go out on their own and start their own website business and emulate what their employer accomplished.

When I sold my first company, Hammocks.com , I was open about my intention of selling the business prior to taking this step. In addition, I used the carrot of severence bonuses - 2% of the sale in this case- to keep them in-line with the goal. Finally, I offered a great idea for another business niche and support to launch it - www.piggybankworld.com - that allowed my two employees an exciting and evolved future as well. My mentality was that they had helped me achieve my success and goal of selling, so I wanted to reward them too for their hard work and loyalty.

In conclusion, being honest and respectful is a good policy with employees (and in life!) Once the deal looks like it will close or is securely set to close, then take the employees to dinner and break the news(if you haven't already) to them over a great meal and some wine. Their fears will be allayed and their sense of worth will be obvious when you describe their severence package.

David Fairley

President,

Websiteproperties.com

Many sellers approach us to sell their internet businesses on a daily basis because of our strong website presence and our growing reputation online. We typically turn away approximately 80% of the seller inquiries currently because their businesses don't meet our criteria to represent and list. We have set our bar high, so we only sell the best qulaity website businesses with excellent fundamentals and strong bottom lines.

Because of our expertise, exposure, marketing and contacts all of our clients recognize the value in retaining us as their website business broker to sell their internet companies. On occassion, sellers question us on the clause in the brokers agreement that stipulates that we will have an exclusive listing arrangement for their business. Some sellers feel that they will have better luck selling the business using multiple brokers as well as directly selling themselves. Our clients are provided with the following reasons for the necessity of an exclusive contract, and this generally satisfies 99% of the sellers who acquiesce to this agreement.

The first thing to understand is that websiteproperties.com already has tremendous exposure in the search engines for major targeted keyword searches that attracts qualified buyers in droves. A few examples of these are: website(s) for sale , website business(es) , website business(es) for sale , internet business(es) for sale , online business(es) for sale , internet businesses, buy a website business, buy a website , etc. In addition, we have thousands of qualified double opt in buyers who subscribe to our new internet business alert emails so they are notified of the latest established and profitable website business we are selling. Furthermore, we aggressively promote each listing in multiple business for sale portals in the internet business sections and these listings funnel back to our website as well creating even more exposure. In essence, we literally "carpet bomb" the web in a strategically targeted method that presents our client's web businesses with maximum exposure to quality business traffic. Therefore, there is no need to engage another broker to list the site additionally and create confusion from potential overlap in the market. In fact, we do work with other brokers, many whom are subscribers, and offer co-brokering deals with them if they have pre-qualified buyers interested in our listings. So you get the best of both worlds.

As for sellers wanting to keep buyers that approach them directly off the table, this presents exposure to our firm because we invest a lot of time, energy and money on all listings. In addition, it is better to have all prospects filter through to your broker who is more experienced at presenting the business attributes and defending the asking price as well as creating more of a scarcity element where multiple buyers are interested. It will lead to a higher selling price because of the skills and experience of the broker. Not to mention, the time, energy and finese it requires to negotiate a deal and close it can be a major source of frustration and distraction to a seller going it alone. This can have a negative impact on the business for sale - like a loss of positioning, sales revenues etc - which can put pressure on the selling price or kill a deal altogether.

We have on a few occassions approached sellers already in the market that were actively selling their sites on their own to see if they want us to broker their website. We generally do this when we identiufy the business opportunity as meeting our criteria, but also because we appraise the business more than the seller is listing for and aware of the true market value. These situations often lead to a non exclusive agreement. However, because our experience with these buyers has often lead to problems of non respect, rogue listings, lack of communication and even different listing prices propagated by the seller, we have decided to avoid these deals in the future. Most of the time the attitude and behavior of the seller causes the deals to crash as well. It seems as though the disregard for this formality is a precurser to disrespect, unethical business practices, and ultimate failure to close a fair deal.

So this blog entry serves both as a practical explaination of why business brokers need the exclusivity but also as an opportunity to express our company's philosophy and future approach to working with clients. When there is mutual respect and confidence in our services demonstrated by a seller working with us according to our parameters, which have been established and tested over seven years, historically these client's experience quicker closings with higher selling prices and greater overall satisfaction.

We look forward to many years of serving the cream of the internet business community and professionally assisting them in realizing their goals of selling their website business.

 David Fairley

President

www.websiteproperties.com