Dru recently had a discussion with Brisbane Business Broker Brendan Morgan about the ins and outs of selling an online business in Australia. Brendan has been selling online businesses for over a decade and has a wealth of experience in these types of transactions. Some key takeaways from the discussion were:

Impact Of COVID

Online businesses saw a dramatic rise in sales in response to COVID related restrictions. Interestingly consumer sentiment to shopping online has continued beyond lockdowns with sales typically higher across industries than pre-2020. Despite this being the case, buyers generally don’t give much sway to COVID years when valuing a prospective purchase. Instead preferring to give extra weighting to the sales and profits in the most recent financial years.

Importance Of A Quality Business Package

The beauty of online businesses is that they can typically be easily relocated and run from anywhere. This opens them up to a large pool of potential acquirers. To maximise the outcome from these potential buyers, the business needs to presented in such a way that all of the information is at their fingertips. They need to be able to fully understand the ins and outs of how the business works and be able to picture themselves running it. Systems, processes all documented.

Spending time to create a comprehensive information memorandum (IM) or prospectus has a strong positive return on time. It draws in buyers who may have been turned away with chasing up information being in the ‘too hard’ basket and saves back and forth questions from potential buyers. Ideally resulting in a number of offers coming through at a similar time, driving the final sales price up.

Buyer Demand

The demand for online businesses is amongst the strongest of any industry. If they’re priced fairly, they will sell quickly. This is particularly true for businesses worth less than $1m where the buyer profile is typically an individual. Businesses worth more than $1m will sell too, however as these are typically purchased by an industry buyer of which there are less of, they take longer.

Would you like to chat about how your online business may be placed in the current market? Book a complementary consultation with one of our expert brokers today.