It can be quite daunting when thinking about all the steps it takes to acquire a web business. For many, it’s a complicated, unknown, and scary endeavor – buying and selling websites. At Apex Brokerage we are all about transparency, as the more you know upfront, the less stress you’ll experience during the acquisition process.
10 Step Acquisition Process
Step 1: Initial Valuation and Qualification Assessment
When you’ve decided you’d like to receive a valuation our expert brokers will ask for a few pieces of documentation including:
- Profit and Loss Statement
- Google Analytics Access
- High-Level Business Model Details
- Sales Price Expectations
After receiving the required documentation, Apex Brokerage will determine an initial valuation range based on current market conditions. Furthermore, our brokers will determine whether your business meets the criteria for us to provide representation. Generally speaking, we’re happy to represent your business for sale as long as we believe it can sell for at least $50,000 and as long as we don’t come across any unexplainable red flags.
Step 2: Representation Agreement
Once the valuation has been agreed upon, a representation agreement will need to be executed. Apex Brokerage charges a flat 13% commission on the gross purchase price upon a successful acquisition. Furthermore, our exclusivity period is 90 days from the date the representation agreement is signed by both parties. Note that the industry average for commissions and exclusivity is 15% and 180 days.
Step 3: Due Diligence and final valuation
After the representation agreement has been executed, our team of expert brokers will require more in-depth information to both complete full due diligence and provide a more accurate valuation. During this time a more historic P&L may be requested, in addition to an interview questionnaire.
Step 4: Listing Preparation
Pending a successful completion of due diligence (DD), you will now know the exact valuation of your business, in addition to our pricing strategy. At this point, our team at Apex Brokerage will draft up two marketing prospectuses for your review. One prospectus will be for the general public – omitting all identifying information, and one prospectus will be more transparent to be read exclusively by our vetted buyer base with NDA’s on file.
Step 5: Marketing
Apex Brokerage will then market your business to both our buyer base, in addition to listing it on 3rd party platforms. All said and done, our listings reach thousands of potential buyers. During this phase, our brokers will be able to answer the majority of incoming questions, however, you’ll need to be available to occasionally answer specific inbound questions.
Step 6: Negotiation
Once a potential buyer has been found, there will likely be verbal offer negotiation prior to the execution of a Letter of Intent (LOI). An LOI will only be executed when both parties are happy with the purchase price and terms of the acquisition. After a 15% deposit has been made, the LOI will provide the buyer with around 10 days of exclusivity in order to allow for buyer due diligence. Note that Apex Brokerage will handle the drafting of the Letter of Intent on your behalf.
Step 7: Due Diligence
During this phase, the buyer will need to complete their own due diligence in order to determine that there has been no misrepresentation. When the buyer is satisfied, a purchase agreement will be executed.
Step 8: Purchase Agreement
Apex Brokerage will draft up a legally binding purchase agreement to outline all terms that have been negotiated by both the buyer and seller. Once each party agrees with all provisions of the purchase agreement, it will be executed be both sides.
Step 9: Escrow
At this stage, the buyer will fund the remaining 85% of the purchase price into a 3rd party escrow service (escrow.com). Apex Brokerage will arrange the escrow account and both the buyer and seller will be notified via email on how to login.
Step 10: Transfer of Assets and Release of Escrow
Once escrow is fully funded the seller will transfer all assets to the buyer. The buyer will then have 24 hours to confirm receipt prior to releasing escrow to the seller. From this point, the seller will need to work with the buyer answering questions, during the agreed upon transitional period. Congratulations, the acquisition is complete!
Thinking about selling a website? Contact us here and receive a free valuation.
Considering a web business acquisition? Contact us here and our expert brokers will be in touch soon.
Have an inquiry? Contact us here and we’ll be in touch as soon as possible.