If you’re running an online business, you may reach a point where you want to sell. Whether that’s because you want to move onto another project and try something new, or you just don’t want this business anymore, and it’s time to make a sale.
As you can expect, the process of selling an online business is not as simple as posting up an ad and selling it to whoever is interested, nor is making sure you’re actually getting the amount of money your business is worth. You’ve spent a lot of time in building it up over the years, so what’s a fair price, and how do you know when a buyer is trying to rip you off?
In today’s guide, we’re going to talk you through everything you need to know on how to define the worth of your business, how you can maximise your business’s sale, and how to have the best-selling experience possible.
Finding Out How Much You’re Worth
The first step you’ll want to take is defining the price you want to sell your business for and what kind of asking price you’re going to be working with. As a rule of thumb, you’ll want a baseline figure, but don’t worry, this can change as you move through the process.
Some of the considerations you’ll want to think about include things like how much profit your business makes in a year, how much scalability your business has for growth in the future, what kind of sales figures you have, the trends in your industry, and how likely the business is to attract new customers and grow.
Of course, many buyers will be looking into things like how well the business is running now but will equally be interested in finding out how much they can grow the business themselves in the future. You need to consider these potentials when trying to sell. If a business has reached maximum capacity, investors will probably not be interested.
How to Start Increasing Your Business’s Value
There are two main areas of your business you should look at when it comes to trying to improve the value of the business and get more for what you’re offering. These are improving the Return of Investment (ROI) your business has to offer and to reduce the relative risk involved, which clearly ties in with what we were saying in the first section.
A clear way to do this is to keep a track record of your sales and ensure all your buying and selling processes are well documented, as are your systems, so anyone can see what you do and have a foundation to what they would improve or optimise.
You also need information on how your brand is positioned and how you can drive new sales to your business. Perhaps you own an eCommerce store that sells in the US, and it’s doing really well, but there’s also the opportunity to grow by shipping out to new countries around the world or even setting up physical brick and mortar stores.
When it comes to branding, things like social media followings and brand image is such an important point to consider. Every brand has a voice online, and it’s vital that you’re clear about what yours is. When buying a business, the buyer needs to ensure this voice and branding is sustainable, or they’re willing to risk rebranding, but that’s on them to do so.
In terms of analytics, you’ll need to be able to provide information on internet traffic, how many hits you get, and what kind of sources people are coming from. Does the major of your traffic come from blog content, external links, paid ads, social media, or direct URLs? The more information you can provide, the clearer the picture your buyer will have on your business and how you’ve grown, and the more of a foundation they’ll have to pay a good price.
"The final aspect you’ll want to consider is the legal history of your business. You need to make sure you’re doing everything by the book, and there are no legal complications. When a buyer is researching your business, they want to know that they’re not buying a business that is going to harm them and their reputation in the long-term, or something they don’t know about is going to catch them out, so make sure you’re providing proof that everything is going to be okay" shares David Arnold, a consultant at Writinity.com and Researchpapersuk.com.
Selling Your Business in the Right Place
Once you’ve got the core aspects of your business down and you’re ready to sell, to ensure you’re getting the best price, you’re going to need to make sure you’re selling your business in the right place. Fortunately, there are numerous places you can think about.
These places include online website auctions and business auctions, a website and business marketplace, such as a classified listing site specifically for businesses, a professional business broker who can sell your business on your behalf, or by using an investment bank.
The first two; an auction house and a marketplace, is where you can sell your business yourself. Since you’ll be creating all the copy and the ads yourself, you’ll only need to pay a small fee to either host the ad on the website, or a small commission of the sale. While this is typically the most affordable way to sell a business and you’ll get the biggest percentage of profit back, it does take time to set everything up and sort through the buyers yourself.
You also have the problem of waiting. Once you’ve posted an ad, you then basically need to sit back and wait for potential buyers to come to you. You’ll then sit through and explain everything multiple times, and there’s no guarantee that you’re going to secure a sale, even if you put hours into explaining and marketing everything.
If you’re not interested in this risk or want someone else to manage the sales process, you’ll want to use a business/website broker or an investment bank. A broker is perhaps the most expensive option, and as a rule of thumb, they’re only going to work for businesses that are selling for over $250,000.
"If you want to take things one step further, you may want to use an investment bank, which is traditionally if you have a business that is turning over around the $5 million mark or more. This is simply because it’s much safer to sell this business with the security features of a bank handling this amount of money" explains Tina Harper, a business writer at Draftbeyond.com and Lastminutewriting.com.
Selling to the Right People
Finally, you’ll want to be aware of who you’re planning on selling your business too. You could be selling to first time buyers, private equity companies, brick and mortar businesses, entrepreneurs, investors and many more.
The best thing to do is to pick a selection of people you’re trying to sell to and focus on how you approach these people and tick the boxes for what they’re looking for. For example, if you’ve just got your business off the ground and you’re looking to sell so you can start a new business, you may be looking to sell to a first-time buyer.
Related: How to Qualify Prospective Buyers
For this, you’ll simplify everything down and make it really easy to understand everything, and you’ll streamline the whole process. This way, you’ll attract first time buyers which in this case, is your ideal target market, and you’ll get the price you’re looking to sell for.
Ashley Halsey is a professional writer at Luckyassignments.com and Gumessays.com who has helped endless people sell their businesses for the best price. Mother of two children, she enjoys travelling, reading and attending business training courses.