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If you are a business owner looking to sell your business, you may consider selling online. Selling your business online can have many advantages. For instance, it gives you access to buyers across the country or world and can also result in a faster sales process. This article will outline some essential considerations if you want to sell your business online.
Why Would I Sell My Business Online?
If you are interested in selling your business, you may consider selling it online. Selling your business online can be a good idea for several reasons. First, it can give you access to country-wide or even international buyers. You will no longer be limited to buyers who are geographically close to you. Furthermore, selling a business online can be particularly beneficial if the business is also an online business.
An online shop, for example, may not require the same level of due diligence and in-person inspection. Due diligence is the process of research during the transaction and sales process, and it can be time-consuming to do in person.
Secondly, online selling can save you time because you can post key details about the business, such as financial reports and images. By making it available for everyone who inquires, you can save time on providing it to individual buyers.
Further, you can save more time by using online marketplaces with many users. This will increase the amount of people who see your business and business model, increasing the number of potential buyers.
How Do I Sell My Business Online?
The first step is to find a platform to list your business as being up for sale.
The easiest and cheapest is usually to use an online marketplace. An online marketplace is a website on which sellers can list their business. Potential buyers can interact with your listing and will usually have access to your contact details to make further inquiries.
The usefulness of an online marketplace will depend on the:
- type of business you are selling;
- region in which you are selling; and
- price for which you are selling.
Small businesses will usually do better on online marketplaces, because you will have a wide range of potential buyers including people with less equity to invest.
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What Do I Do After Listing My Business?
After deciding to sell your business online, the rest of the process is similar to selling a business conventionally. For example, you will need to get a valuation for your business. This can depend on various factors, such as your:
- profit margins;
- sales volume;
- product ideas;
- liabilities; and
- assets.
Tax Obligations
If you are selling a business, you will usually have to pay capital gains tax on your profits. Your business may be liable for a tax exemption, however.
For example, if you are a sole trader who has been trading for less than two years, you may be able to avoid paying capital gains tax.
The type of tax you have to pay may depend on the business you are selling. Therefore, you should seek professional legal advice if you are unsure about your tax obligations when selling your business.
Key Takeaways
Selling your business online can be a good way of saving on time and costs, and increasing your exposure to potential buyers within your target market. When listing your business online, you should ensure you have detailed important figures about your business, such as financial documents. You will also want to guarantee that you have provided contact details so that potential buyers can make enquiries.
Beyond the listing process, your business sale will be similar to if you were selling traditionally. For example, you will have to make documents and statements available as part of the due diligence process, and you may have certain tax obligations after selling your business. It is a good idea to contact a lawyer if you are unsure about your obligations when selling your business.
If you need help with selling your business online, our experienced business sale and purchase lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
An e-commerce business is a business that specialises primarily in online sales and trade.
Yes, though whether doing so will be effective or not depends on the type of business you are trying to sell and your asking price.
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