People contemplate selling their businesses for a variety of reasons. Today’s global eCommerce market conditions are extremely supportive of this decision as well. As per information from Statista and other trend reporters, the eCommerce industry in India alone is expected to reach a mammoth USD 350 Bn by the end of 2030. Amongst this exponential growth, investors and buyers are queueing up to get a slice of this pie. Through this guide, we will address the most common question asked by a business owner – when, how, and where to sell my business online profitably?
WHAT type of businesses can be sold online?
Online businesses are much more easily sold as compared to brick-and-mortar stores. The most popular types of businesses sold online include:
- eCommerce stores: Shopify stores, Amazon FBA stores, and other eCommerce stores operating on large, common platforms or their own individual ones are much in demand and can be easily sold online.
- Amazon Affiliate Sites: Sites making money via the Amazon Associates Affiliate program’s commission system.
- Mobile Apps: Businesses developing and selling mobile apps, games, and software for Android, iOS, or other platforms.
- Dropshippers: Businesses without an actual inventory (like an eCommerce store) but sourcing products from third-party stores to fulfil customer orders.
WHEN to sell your business online?
Selling a business is a critical decision with significant consequences. However, there is no single moment that can suit all. The right time entirely depends on your own unique circumstances and requirements. Typically, it is suggested that businesses that have been operational for three years or more are ripe to be sold. If your business is already doing well, it may be a good time to sell it as it is likely to attract a lot of buyers. Businesses that have generated a loyal customer base, have high online traffic, and deal in a diverse inventory are all in prime condition to be sold.
Experts do recommend not selling a business during a slump as you are unlikely to get purchasers or a good deal for it. But, if you have a personal situation that warrants selling the business urgently to use the funds received, then all the considerations disappear into thin air and you can immediately jump to the next step.
HOW to sell your business online?
Before you actually sell your business online, there is a lot of preparation that needs to be done. The steps involved include:
- Organize the business metrics: Buyers are interested in businesses that can withstand the storms of market volatility and changing consumer trends. The performance indicators of your business such as revenue per customer, online traffic, click-to-sale ratio, returns and replacements, average customer ratings, etc. are quite valuable in this regard. These are easily sourced from the web developers of the platform you operate on.
- Gather your financial data: Apart from business metrics, any investor is bound to be anxious to know the financial health of your business before investing in it. You will be expected to disclose information such as sales and revenue figures, cost of goods sold, profit and loss, taxes paid, salaries paid, any outstanding debts in the form of loans or lines of credit, etc.
- Conduct a business valuation: Once you have done the aforementioned groundwork, it is time to put a tag on your business. Experienced entrepreneurs may run this exercise on their own, while others can make use of specialists. The outcome of this step is to determine the market-related selling price and your own walk-away price for your business.
WHERE to sell your business online?
There are quite a few options available to you when it comes to choosing the medium to sell your business online. Some of the popular ones include:
- Selling Directly: Simple and straightforward, you can sell your business to people in your professional network or even to a competitor. Do know, that this will require a degree of expertise and may not be suitable for people who are running the selling process for the first time.
- Online Marketplaces: Digital marketplaces allow you to list your business and let interested buyers approach you. This can be a long process with very little control over what kinds of buyers to attract.
- Using a Broker: A broker or a consultant can take over a lot of the responsibilities on your behalf and manage the process till you receive your final payment. While this can be beneficial for people who are doing this for the first time, do know that the commission or brokerage fees can be quite hefty and will come out of your own pocket.
WHOM to sell your business online?
Finally, you need to identify the right buyer to sell your business online. Apart from individual investors and competitors as mentioned above, you also have the option to sell to a direct buyer or an acquirer. These are companies with vast experience in taking over businesses and integrating them into their own, well-established platforms. Not only do they ensure you receive a fair price, but they also ensure your business is well looked after even after you exit it.
Now that you know What, When, How, Where, and who to sell your business online, it is time to buckle up and get started on this incredible roller coaster and hope to get the best returns for your efforts.