Online is now the most popular way to buy and sell a business. This can be supplemented by other more traditional methods that are discussed in another article: Where to Sell a Business.
All online sites create an environment that introduces buyers to sellers in a cost effective way. It works on a volume model, which is why the number of businesses for sale on the books is so high, typically thousands at any one time. So it's easy for other sellers to market their business too.
Some websites specialize in one main country, so there's the advantage of specific local knowledge. Others have a multi-territory, even global footprint. This means significant choice for you, the seller, when spending your promotional budget.
To work effectively there has to be enough serious buyers to go around. All this increases the challenge of making your own business stand out from the crowd in the sector category and locality.
ExitAdviser has chosen a more individually, discreetly targeted method, using Google Ads to drive buyers to your own business Landing Page. It's the place to start by dipping your toe in the water because, as a subscriber, you're automatically given a number of prepaid clicks as part of your personalized campaign. Should you choose, ExitAdviser gives you the option of purchasing a package of extra ad clicks.
So how do you make your business stand out from the online crowd?
This article helps guide you through the issues. Namely:
- Budgeting for the sale
- Benchmarking against other similar businesses
- Communicating a strong proposition
- Monitoring progress, being flexible
Taking each of these sections in turn:
1. Budgeting for the sale
Let’s focus first on the budget. In other words, how much do you need to spend to get the job done?
This means you need to be clear on what a good campaign result looks like, and how you’ll measure it.
How many serious leads do you think you’ll need to ensure that you get a buyer? It may only take one, but this is probably wishful thinking.
Budget permitting, you may want to increase your chances of a quick sale by going beyond ExitAdviser and list with an online sale website to broaden exposure and enable comparison.
How will you measure an individual online site’s performance? Several sites have an alert service that automatically feeds you buyer leads. Some also enable buyer sign-up to indicate which types of business are of particular interest to them.
Your decisions here may depend on a number of factors, including:
- How quickly do you want to sell, or need to sell? (these are not quite the same thing) – other things being equal, the more you pay for blanket coverage the faster you’ll sell the business.
- How realistic is your asking price? – unless you’re very lucky, the higher the price difference relative to other similar businesses, the longer it’ll take to sell.
- Are you offering seller guarantees to smooth the deal making process? – the more you share the post-sale risk with the buyer, the more attractive your business looks to them – options include, you remaining within the business after the sale for a pre-agreed period of time, or providing seller finance (typical in 80% of business sales), or both.
- What’s the level of buyer interest generated through the site? – buyer traffic statistics, and the total number of businesses for sale on the site at any one time, are only a first level indicator of scale and coverage, that is, the site’s ability to attract buyers and sellers in one place – it’s good to maintain a healthy scepticism about these claims, asking questions where you can (perhaps in an online forum if provided) about what these mean for the chances of selling your particular business – so, which sites actually have the best track record of bringing serious buyers to the table?
- Which sites most effectively match serious buyers with sellers for businesses like yours? (so that sales are completed at acceptable prices to both parties) – tricky, in that it’s always important to compare "apples with apples", but in reality many online sites only quote proxy data (like buyer traffic stats) rather than the hard conversion data you really want – however there’s usually no shortage of customer testimonials to check out.
- How many other businesses in your market space are for sale at the moment? – it’s simple supply and demand, assuming of course that businesses like yours are currently of interest to buyers (this is covered in more detail in section 2 below).
- How do online sites price their listings? – this is significant because some sites charge on a monthly time basis for a standard package, whilst others charge a price premium for additional optional features – and prices per month can vary significantly.
Affordability has been left to last because the above considerations are important precursors to your decision. Funds may be limited, forcing you into difficult trade-off choices. Besides, even if money is plentiful, why would you want to waste it?
This is why ExitAdviser provides you with a personalized Landing Page and Google Ads campaign to get the sale process started in a targeted, cost effective manner, all within the one-off subscription cost.
Beyond this, look to balance the amount you can afford, against the factors outlined above, before committing to further expenditure. First check out a number of other business sale sites and the range of services they offer. Engage in online forums to ask how others are getting on with their business sale, noting their advice and comments.
A good tip is to assign your sale project a budget but don’t spend it all at once. Keep some in hand for later in case you need to make adjustments (see section 4 below).
2. Benchmarking against other similar businesses
Before triggering your own free personalized ExitAdviser campaign, do a benchmark search of a few online business sale sites for information and asking prices for businesses similar to your own, not just in your own locality. Following this, you may wish to adjust your Sales Memorandum content.
Setting your asking price is a key decision. You've probably already used ExitAdviser’s Valuation Tool giving you the range of potential business values. Calibrate your pricing against the actual market from the general searches made above in your business category.
Consider the following:
- Are there lots, many, or few businesses similar to yours for sale at the moment?
- How do other businesses market themselves on these sites and can you find examples of excellent presentation (use of words and pictures)?
- If it were your money, would you buy any of these businesses based on the asking price and information presented for each?
- How do these businesses compare with yours as an investment opportunity?
It’s good to ask others you trust to get an objective view.
Now narrow your focus to your own locality, to see if this changes your perspective.
Some online sale sites also provide historical business sale price data that can also be helpful in calibrating your asking price.
3. Communicating a strong proposition
There’s some really good news here. The job’s almost done already!
If you’ve worked carefully through the Sales Memorandum Tool, by now you will have gathered and prioritized all the key selling information together in one place, and have a clear idea of what makes your business different from the rest.
Picking up from section 2 above, you now have all you need to complete the job. By searching the online business sale sites for similar businesses, you’ll see how they present themselves, giving you a basis for comparison and highlighting any point(s) of difference.
ExitAdviser's Sales Memorandum Tool makes it easy for you by automatically transferring the key information to your personalized Landing Page in readiness for the Google campaign. Naturally you can make further adjustments before you're happy to push the campaign button.
A question checklist, with example questions in brackets, is a handy clarification technique here. It can also be applied in other contexts such as in preparation for buyer meetings and making other plans:
- Who? (are the owners)
- Where? (is the business located)
- What? (is your product or service offer)
- Which? (best describes the profile of your target customer group)
- Why? (do you want to sell now)
- When? (do you want your listing to start and end)
- How? (can you be contacted)
- How much? (is the asking price)
- How many? (years have you been trading)
Keep contact and location data general if you’re particularly concerned about disclosing too much information at this stage.
"More is less" is a good rule of thumb. This means that fewer, well chosen words are preferable to rambling prose.
It’s always advisable to use your own words, rather than just "cut and paste" from others', because this then makes it a version unique to you. Providing additional financial information may be an advantage, as long as it’s not commercially sensitive.
Remember, the idea here is to prompt enquiries for more information, so that you can forward your Sales Memorandum document to qualified prospects following an initial communication, whether by telephone, email or, perhaps face-to-face.
Refer to the Sales Memorandum in the business case study example. Also refer to your research of similar businesses for sale in section 2 above.
4. Monitoring progress, being flexible
The Landing Page and Google Ads campaign on ExitAdviser gives you a head start, to generate early buyer interest. It's easy to top-up your clicks budget on the site once the free ones have been used.
With any Sales and Marketing campaign its's important to periodically assess its success in relation to pre-defined criteria, referred to in Section 1 above. Critically evaluate the performance of the different selling routes including the online business sales sites if you've assigned some of your budget to them. Be flexible and open to changes based on feedback.
This is why it's advisable to keep some budget in hand.
If the chosen selling routes produce few leads, or leads of poor quality, then first take a critical look at the content in your Landing Page/listing. To see if it’s really communicating your proposition effectively.
Perhaps you could include a more appealing photograph, or make the words punchier? It may also be a sign that you need to re-visit your Sales Memorandum and make changes.
If a particular selling route is working well, buy more clicks or renew if this is an option. Discontinue selling routes that generate few or poor quality leads, or don't appear good overall value for money.
It’s best to use objectivity and hard facts when making these decisions. To make your money go further and speed up the selling process.