There’s a variety of exciting online niches for thriving entrepreneurs, but the rules for selling your online business are roughly the same.
After toiling on your venture for months and years, you deserve to get the most from your efforts and cash out like a boss. But there are a couple of things you need to keep in mind to negotiate the best possible price.
Let’s explore the established standards for selling your online business efficiently.
Steps to Selling Your Online Business:
1. Preparing the Paperwork
For the legal and financial procedures to begin and conclude successfully, you will need to have all your documents prepared. Here’s a quick list of what you’ll need:
Financial documents related to:
- The company’s past and present earnings (revenue, sales, profits, losses, margins etc.), preferably dating back at least 3 years (the longer the better)
- Current business cash flow
- Updated balance sheet (shareholder equity, assets, and accounts payable liabilities)
- Business tax return statements and accounting details, preferably dating back at least 2-years
Legal documents, such as:
- Confidentiality agreements
- Offer-to-purchase agreements
- Business insurance details
- eCommerce business license and other niche specific licensure
- Client and supplier contracts
- Employee agreements
- Letter of intent
- Post-closure agreements
Online business performance documents detailing:
- Site traffic data: everything from the most popular pages to the best external sources of traffic generation
- Conversion rates, active leads, lead positions, email contact list, etc.
- Past, present, and potential customer profiles
- Top selling products and categories
- Tech stack you’re currently using, along with integrations and technical dependencies
2. Investing in a Short-Term SEO Marketing Strategy to Boost Profits
It may seem like an odd time to invest in search engine optimization, but that’s only if you are not aware of the inner workings of e-commerce acquisitions. Investing in clever SEO marketing strategies will naturally boost the merits in your site’s performance data reports.
Since documents detailing the online business’s performance are going to be your company’s key selling points, the best time to invest in a short term SEO marketing strategy is a few months before attempting the sale.
The campaign should have potential for continuation and turn into a long term SEO marketing strategy that the buyer can inherit. If potential buyers find that your short-term campaign worked, they will have one more reason to be interested in the company’s sale.
An effective SEO strategy may involve building links from authoritative websites, creating internal links between your top pages, and fixing technical SEO issues that drag down your site’s performance.
3. Evaluating Your Online Business
Now that you have invested in raising the value of your website, you can confidently name a price for the sale that is justified by your company’s net worth and potential market value.
Unless you have vast experience in buying and selling companies, you may need to get the business evaluated professionally. You should find help selling your website from the same merger and acquisition firm that will evaluate your business’s market value.
Pick the right one and they will even find the best buyer and negotiate for a higher price on your behalf. There are many other aspects that require micromanagement while selling any company, but only merger and acquisition experts can help a business owner identify and optimize them.
Unfortunately, the selling process can get quite complicated and there are a few landmines ahead that you definitely want to avoid. That’s why hiring professionals to help you (even if they’re quite pricey), will let you fall asleep knowing that selling your online business is handled properly.
4. Establishing the Standard Operating Procedures to Increase The Value of Your Business
Most buyers are interested in buying a business that’s efficient, organized, and automated. To get the best price during the evaluation, your business must come with well-established standard operating procedures (SOP).
Once you sell your company, its operational standards will be determined by its new owner. However, no party ever acquires a new company to get drowned in the chaos of everyday operations. Therefore, most buyers will look for an established set of standard operating procedures from the seller at the time of its sale.
These include the customer acquisition process, handling customer support, selling and shipment processes, new product creation procedures, HR and payroll processes and any other activity that brings value to your enterprise.
Make a list of these processes, and create a formal document that you can hand over to your potential buyers. They will appreciate it.
5. Choosing Where to Sell Your Online Business
Finally, with all the above completed, you need to think about the best place to sell your online business. The best option for you will most likely depend on what type of business you run and how much you expect to get for it.
As mentioned above, a merger and acquisition expert is going to be the best pick for an online business that is of a decent size and has employees. However, if you are purely running an affiliate website or making money through advertisements, there may be better options for you, such as ‘flipping websites’.
Of course, you can also look to sell your business privately too. This is most commonly used by those who are selling to somebody they already know, perhaps a current employee or investor. A broker will, however, see that you receive the best price and will negotiate on your behalf.
Selling an online business might seem like something that is stressful, but it doesn’t have to be. Keep the above advice in mind, don’t be afraid to work with the experts, and the process should be smooth.
Preparing your business for a liquidation event is an arduous process, but it’s well worth your effort. By taking care of each detail, you will ensure the highest possible valuation and sell at the highest price.
Above all, don’t expect everything to happen so quickly. This process can take up to a year, so take time to plan everything properly and get in touch with professionals who will help you maximize the value of your enterprise.
Selling your online business is a life-changing event and a start of a new path, and while it’s tough, it’s your ticket to financial freedom, so enjoy the ride.